Lecture 5

MARKET SEGMENTATION

Course incharge
Miss. Syeda Fatima Zamir
JINNAH UNIVERSITY FOR WOMEN

BS-III & BS-IV

Course Code: MKT-4012
Cr.Hrs: 3
MARKET SEGMENTATION
(TARGET MARKET)
 OBJECTIVES OF MARKETING SEGMENTATION

• To understand market segmentation and

targeting.

• To be able to evaluate the success of market

segmentation for businesses.
 INTRODUCTION
• Marketing segmentation is a process of grouping the
customers into number of different divisions on the
bases of similar characteristics.

• It is a customer oriented philosophy. A market

segment consists of a identifiable group within a
market. Every product is not required by everybody.

• Therefore marketer must group the customers on the

basis of similar characteristics or uniform response
to a concentrate either on one or more groups
depending upon his capability instead of launching
his product in the open market.
• Market segmentation strategy involves dividing the
market into groups, where individuals have similar
needs and wants for services and products.

• It could also be a segmentation of people on the basis

of behavior, culture and economic status. To get a
clearer picture of what is market segmentation, one
can always look into the definition provided by
business dictionary.
 EXAMPLE
• McDonald’s and other marketers have found
market segmentation to be a valuable technique for
the following reasons:

• Efficient use of marketing resources Better

understanding of customer need.

• Better understanding of the competitive situation

Accurate measurement of goals and performance
 MARKET SEGMENTATION CAN BE DESIGNED AS
INDICATED IN FIG.8.1
BASIS OF MARKET SEGMENTATION

Geographic Demographic Psychographic Behavioural

Village Age Compulsiveness Usage rate

Local market Gender Gregariousness Readness stage
Zonal Region Race Autonomy Benefits sought
City or Metro Marital status Conservation Enduse
Size of density Education Leadership Brand loyality
Country Income Occupation Authoritarianism Brand belief
Climatic conditions Religion Ambitiousness Market factors
Family size Personality Occasions
Family life cycle Attitude towards
Nationality products
 MARKET
SEGMENTATION
• This is where the
market is broken down
into smaller subgroups
that share similar
characteristics

• Age Gender Income

Religion
Examples • Ethnic group Level of education
Geographical Socialclass
WHAT IS ?

You might understand the parts, but might miss the whole chicken
 CHARACTERISTICS OF MARKET SEGMENTATION
• Age
• Gender
• Geographic location
• Income
• Spending patterns
• Cultural Background
• Demographics
• Marital status
• Education
• Language
• mobility
FLOW CHART OF SEGMENTATIONPROCESS

Analyze the needs of customers

Analyze the characteristics of consumers

Disaggregate the consumers into suitable segments

Formulate different market mix for different segments

Feedback of various segments

Select the higher potential segments

PRACTICAL REQUIREMENTS OF MARKET
SEGMENTATION
 MARKET SEGMENTATION
STRATEGIES
How a market is segmented is based on variables used for
segmentation; behavioral, demographic, psychographic and
geographical differences.

1.Behavioral Segmentation:
• Behavioral segmentation is based on the customer's needs and
subsequent reaction to those needs or toward the purchase of
intended products and/or services.
• This study is conducted on all variables that are closely related
to the product itself, like loyalty to a particular brand, cost
effectiveness in terms of benefits and usage, circumstances
responsible for the purchase, whether the customer is a
regular, a first timer or and has the potential to become a
customer, and whether the readiness to buy is linked to
status.
2.DEMOGRAPHIC SEGMENTATION:

• Demographic segmentation refers to a wide study of the

potential customers. While marketing a product many variables
like age, gender, education, income, size of the family,
occupation, socioeconomic status, culture and religion,
language and nationality are taken into account.

• Dividing the market into groups based on variables such as

age, gender family size, income, occupation, education,
religion, race and nationality.
• 3.PSYCHOGRAPHIC SEGMENTATION:

• Segmenting people according to their lifestyles and

values, and how they translate into consumption or
purchases of products of services is what psychographic
segmentation is all about.

• How one's interest, opinions, values, attitude and the

activities they perform, all affects how and why a group of
people would lean towards one product more than
others. A high status would translate into an expensive
flying habit, while a thrift value will translate into an
economy flight.
4.GEOGRAPHICAL SEGMENTATION:
• Geographical segmentation is done by dividing people
(markets) into different geographical locations.

• The country, state, or neighborhood, the king of gentry,

climate, size of a place segmented into size of its age wise
population, etc.

• All play a role in devising market strategies. This helps the

producer and the marketers to understand what will sell
and what won't, for example, a market for winter wear
would definitely not work in warm regions. Geographic
segmentation tries to divide markets into different
geographical units.
 ADVANTAGES OF SEGMENTATION
• The main advantage of market segmentation lies in a better
understanding of the consumer needs and behaviour so that a
marketer can plan accordingly. In brief, market segmentation
helps:
1. Understand potential customers;
2. Pay proper attention to particular areas;
3. Formulate marketing programmes;
4. Select channels of distribution;
5. Understand competition;
6. Use marketing resources efficiently;
7. Advertise the products and launch
programes;and sales promotion
8. Design marketing mix- product , price, place andpromotion.
 LIMITATIONS OF SEGMENTATION

• Lack of information and data: some markets are poorly

researched with little information about what customers
want

• Difficulty in measuring and predicting consumer behaviour:

humans don’t all behave in the same way all of the time.

• Hard to reach customer segments once identified: it is one

thing spotting a segment; it is another reaching target
customers with an effective marketingmessage
 METHODS OF SEG-MEN-TA-TION
Demographic/Geographic refers to age, sex, income, education, race,
martial status, size of household, geographic location, size of city, and
profession.
Life stage refers to chronological benchmarking of people's lives at
different ages (e.g., pre-teens, teenagers, empty-nesters, etc.).
Lifestyle refers to the collective choice of hobbies, recreational
pursuits, entertainment, vacations, and other non-work time pursuits
Psychographics refers to personality and emotionally based behavior
linked to purchase choices; for example, whether customers are risk-
takers or risk- avoiders, impulsive buyers, etc.
Belief and value systems includes religious, political, nationalistic,
and cultural beliefs and values.
Behavior analysis includes what behaviors consumers actually
engage in (after all is said and done)
 REQUIREMENTS FOR SEGMENTATION
• Identifiable: the differentiating attributes of the must be measurable so
that they can be identified.

• Relevant/Accessible: the segments must be reachable through

communication and distribution channels.

• Substantial: the segments should be sufficiently large to justify theresources

required to targetthem.

• Unique needs: to justify separate offerings, the segments mustrespond

differently tothe different marketing mixes.

• Durable: the segments should be relatively stable to minimize thecost of

frequent changes.
 FASHIONCHANNEL: MARKET
SEGMENTATION (BRIEF CASE)

• The new Senior Vice President of Marketing for The Fashion

Channel (TFC), a cable television network dedicated to round-the-clock,
fashion-oriented programming, is preparing to recommend a change in
the company's traditional marketing approach by introducing a market
segmentation program. This program is, in part, a response to the
intensifying competitive environment for TFC, and it needs to strengthen
the company's brand and positioning with viewers and advertisers. At the
same time, the program must maintain consumer and distributor
satisfaction with the network. Several segmentation options are being
considered, each with pros and cons. Consumer research provides insights
but does not give a simple answer regarding the best path to take. The
reader must evaluate the research results, calculate financial scenarios,
and make a recommendation. Also looks at change management issues.
TFC has never done a program like this before, and the Senior Vice
President of Marketing is new to the job. In addition to making a
recommendation, she must manage the change process to insure that the
organization and her leadership team peers are fully aligned.
 CONCLUSIO
N
• Market segmentation: is separating a market into
distinct groups of potential consumers who share
common characteristics and interests and who are likely
to be attracted to particular products or services.
Segmentation allows you to develop products and plans
which fit the needs of customers more efficiently. Market
segmentation is also separating the customers into
different groups, and sometimes can split up into
different age groups because different age customers are
interested in different things from the business. Market
segmentation is a marketing approach that encompasses
the identification of different groups of customers with
different needs or responses to marketing activity. The
market segmentation process also considers which of
these segments to target.
 ASSIGNMENT
• Write down market (positioning, targeting and segmentation)
of any brand local or international its up to you.
• Minimum 3 pages and maximum 6 pages. All details must be
include of concern brand.
 BIBLIOGRAPH
Y
1) The essence of international marketing
- Stanly J.Paliwoda
• Prentice –Hall of India, NewDelhi

2)Principles of marketing
- Philip Kotler
- Gary Armstrong
• Prentice –Hall of India PrivateLimited
3. Marketing management
-S.A. sherlekar
• Himalaya publishing house

4. management-2
-Anand K. Bewoor
-S. KULKARNI
• Tech-max publications, pune