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Market Segmentation

Market segmentation refers to dividing a large market into smaller subgroups with similar characteristics or needs. It involves segmenting customers based on factors like demographics, psychographics, behaviors, benefits sought, usage rates, and loyalty. Some examples of market segmentation include targeting Barbie dolls in China based on culture, McDonald's adapting menus for Indian customers, and Hallmark creating greeting cards for various occasions to target buying behaviors. KFC segments customers based on their calorie and taste preferences, offering both high-calorie and low-calorie chicken options. Market segmentation allows companies to better understand customer groups and tailor products and marketing to meet each segment's specific needs.

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249 views

Market Segmentation

Market segmentation refers to dividing a large market into smaller subgroups with similar characteristics or needs. It involves segmenting customers based on factors like demographics, psychographics, behaviors, benefits sought, usage rates, and loyalty. Some examples of market segmentation include targeting Barbie dolls in China based on culture, McDonald's adapting menus for Indian customers, and Hallmark creating greeting cards for various occasions to target buying behaviors. KFC segments customers based on their calorie and taste preferences, offering both high-calorie and low-calorie chicken options. Market segmentation allows companies to better understand customer groups and tailor products and marketing to meet each segment's specific needs.

Uploaded by

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

What is Segmentation ?

Segmentation refers to a process of bifurcating


or dividing a large unit into various small
units which have more or less similar or
related characteristics.
Market Segmentation
• Market segmentation is a marketing concept which
divides the complete market set up into smaller
subsets comprising of consumers with a similar taste,
demand and preference.
• A market segment is a small unit within a large market
comprising of like minded individuals.
• One market segment is totally distinct from the other
segment.
• A market segment comprises of individuals who think
on the same lines and have similar interests.
Definition

• The process of dividing the total market into


smaller groups of people who share specific
needs and characteristics.
BENEFITS OF MARKET SEGMENTATION
Socio Culture Segmentation
• Barbie Doll In China
• Mc Donald in India
Examples
• Oreo Biscuits in China
Examples of Behavioral segmentation
Buying on occasions
Buying on occasions is the first form of behavioral
segmentation. Products such as chocolates and
premium foods will sell on festivals. Thus these
products are generally targeted by behavioral
segmentation.
The best example of targeting a behavior of buying on
occasions is Hallmark cards –  greeting cards for all
occasions. The primary targeting of hallmark was that
be it any occasion, you will find the right kind of card
for you. Thus you have the perfect option
to express yourself.
Benefits sought

Several products are targeted towards the benefits sought by


the customer. Recently, there has been a market war
between Colgate and sensodyne to target the people who have
sensitive teeth. Similarly, there are other toothpastes which are
targeted towards whitening of teeth.
Hair shampoos are targeted towards split ends, anti dandruff or
others.
The above examples explain what is the role of benefits in
behavioral segmentation. Thus a marketer can divide a
population based on the benefits they seek within a product.
Behavior segmentation based on Loyalty

There are two ways to grow a business. First is to acquire new


customers and second is to retain your existing customers. The more
loyal your customer is to you, the more your customer base will increase.
That’s one more kind of behavior which marketers target. The strategies
for brand loyal customers is very different from that used for acquiring
new customers.
The best example of behavioral segmentation by loyalty is observed in
the hospitality segment where airlines, hotels, restaurants and others give
their best service to provide the most excellent experience possible such
that they can retain their customer. Service is a major differentiator in
hospitality sector. The hospitality sector is the one with the best loyalty
programs ever. Thus the loyalty of the customer can also be used for
behavioral segmentation.
Usage based behavioral segmentation

In residential or commercial segment, the usage


can be demonstrated in the form of heavy usage,
moderate usage or lesser usage. Lets take the
example of beauty parlors or personal care. There
are some customers who use a lot of personal
care products whereas others do not use personal
care products much. Thus depending on their
usage the customers can be targeted.
There are multiple sizes available of any beauty care item. These
multiple sizes are targeted towards the usage level of the customer.
Heavy usage customers can buy the large containers and medium or
small users can buy the smaller container.
Another example of usage rate segmentations can be seen in the
electronics as well as the FMCG industry in industrial buying. FMCG
and electronics works on the basis of a channel with 
dealers and distributors. In these segments, the maximum discount goes
to the one who buys the maximum whereas others get lesser profits as
they also get lesser discounts.
Any product which is not targeted towards the masses generally uses
behavioral segmentation. It is also an excellent form of segmentation for
products which are niche in nature and are targeted towards the wants
 and demands of customers.
KFC
They’ve indeed proved to a strong competitor to other fast food giants such as
McDonald’s and Subway. They have divided their consumers on the basis of various
parameters of behavior, such as calorie-consciousness, taste-consciousness, etc. For
those who want to satisfy their taste buds, they provided them with rich quality, high-
calorie chicken, and for those who want a healthier option, they offer the low-calorie
chicken.
EXAMPLES

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