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Market Segmentation

1. Market segmentation involves dividing the market into distinct groups based on characteristics like demographics, needs, or behaviors. 2. There are different levels of segmentation from mass marketing to niche marketing targeting very small subgroups. 3. Effective segmentation identifies measurable, substantial, accessible, differentiable, and actionable groups to target with tailored marketing strategies.

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Suraj Kumar
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240 views

Market Segmentation

1. Market segmentation involves dividing the market into distinct groups based on characteristics like demographics, needs, or behaviors. 2. There are different levels of segmentation from mass marketing to niche marketing targeting very small subgroups. 3. Effective segmentation identifies measurable, substantial, accessible, differentiable, and actionable groups to target with tailored marketing strategies.

Uploaded by

Suraj Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Market Segmentation

Introduction
• A company cannot service entire market
• It needs to identify market it can serve
effectively
• Levels of segmentation, methods of
segmentation, segmentation pattern etc need
to be examined properly.
• The aim is to distinguish market segments,
target one or more markets and direct
marketing effort accordingly.
Levels of market segmentation
• Mass marketing
• Mass production, mass distribution and mass
promotion of one product to all buyers. Lower price

• Micromarketing
• Segments
• Niche
• Local Areas
• Individuals
Segments
• Customers forming a segment have similar set
of wants. Young, Middle Income buyers
etcetera.
• Product fine tuned for target customers at appropriate
price
• Suitable distribution and communication channel can
be designed
• It can compare with competitors on defined
parameters specific to the segment
Niche Marketing
• It is a subgroup within a segment with distinct
wants. An attractive niche has following
features.
• Distinct set of needs
• They will even pay premium if distinct demands are
met
• The niche is not likely to attract competitors
• Niche gains certain economies through specialization
• It has size profit and growth potential

Examples:- Organic Foods, High end coffee, Religious channels


Other Micro-markets
• Local Area Marketing:-
• Tailored to the needs and wants of local customer
group. (Props and costumes for bollywood, Universities
)
• Individual Customer Marketing:-
• One to one marketing
• Individually customized- Tailors, cobblers etc
• Mass customization- Shampoo in Sachet
• Choice board- Paint companies
• Customerization- Open Software programs, SAP
Patterns of Market Segmentation
• Homogeneous:-
• Where all customers have roughly similar preferences.
Fruits, vegetables

• Diffused:-
• Preferences are scattered and usually the first one to enter
the segment takes market share.

• Clustered Preferences:-
• Preferences are usually clustered in groups with each group
having slightly different taste. Cater to largest cluster or one
product for each cluster.
Market Segmentation procedure-
Need based by Roger Best
1. Need Based segmentation-
a) Group customers based on similar needs which solves
similar problem
2. Segment Identification-
a) Identify the demography, lifestyle, user behavior that makes
the group distinct
3. Segment Attractiveness-
a) Use attractiveness criteria viz market growth, competitive
intensity and market access to determine attractiveness.
4. Segment Profitability-
a) Determine Segment Profitability
Market Segmentation procedure-
Need based by Roger Best
5. Segment Positioning-
a) For each segment create a “value proposition strategy” and
product price strategy based on segment needs and
attractiveness

6. Segment Acid Test-


b) Create storyboard to test the attractiveness of each of each
segment’s positioning strategy

7. Marketing mix strategy-


c) Expand the segment position strategy to include marketing
mix of product, price, place and promotion.
Not all segmentation are useful-
Effective Segmentation
• Effective Segmentation should be:-
• Measurable
• Substantial
• Accessible
• Differentiable
• Actionable
Segmentation variable of consumer
and Business Markets
• Geographic Segmentation
• Demographic Segmentation-
• Age and Life Cycle – Ford Mustang
• Life Stage- Marriage, divorce, retirement
• Gender
• Income
• Generation- Concept of Cohorts
• Social Class
• Continues…….
Segmentation variable of consumer
and Business Markets
• Psychographic Segmentation:-
• Lifestyle- Attitude, interest and activities
• Personality- features, services and images
• Values- Deeper than behavior or attitude. Determines
consumer choices over long term
Segmentation variable of consumer
and Business Markets
• Behavioral Segmentation- On the basis of knowledge
of, attitude towards, uses of or response to a product:-
• Occasions
• Benefits- Road warriors, Generation F, True Blues, Home Bodies
and price shoppers
• User Status- Ex user, current user, potential users, first time users,
regular users
• Usage rate- Heavy, medium, light
• Loyalty Status- Hardcore, Split, Shifting loyalty, Switchers
• Buyer Readiness- Awareness, Informed, interested, desire to buy
and intended to buy
• Attitude- Enthusiastic, positive, indifferent, negative and hostile

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