MARKETING :- MARKET SEGMENTATION :-

 

MARKETING :- MARKET SEGMENTATION  :- 

INTRODUCTION:-

“Beautiful product development in an ugly market segment simply makes no sense.” – Dan Adams

Knowing and admitting that is half the battle.

you do not need to be an expert, but you do need to be able to admit that you may be doing things wrong and try to improve on those areas. Typically, for most businesses, market segmentation and research is one of those areas.

Breaking the Market into Bits

Market segmentation doesn’t have to be as difficult as most business professionals make it. The process just takes time and research.

TYPES

Geographic segmentation

Demographic segmentation

Psychographic segmentation

Behavioral segmentation

Geographic:

Grouping customers by a specific area, such regions of the country or state and urban or rural.

Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, cities, or even neighborhoods.

Demographic:

Demographic Variables:

Age

Sex

Race

Family Size

Marital Status

Religion

Place of Residence

Socioeconomic Variables:

Income

Occupation

Education

Grouping customers by age, income level, gender, family size, religion, race, nationality, language, etc.

age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality.

different occupations could mean different needs for different types of products (eg. Office workers need to buy work clothes, while blue-collared workers usually attired differently)

What are the traditional family life-cycle stages?

Young singles

Married couples with children

What are the non-traditional family life-cycle stages? (Marketers are increasingly catering to…)

Unmarried couples

Singles marrying later in life

Childless couples

Same-sex couples

Single parents

PSYCHOGRAPHIC:

Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traits.

Grouping your customers into cultural clusters, social status, lifestyle and personality type.

Occasion Segmentation – consumers buy special items for occasions like birthdays

Behavioral:

Grouping customers by product usage. For example; light, medium or heavy users. This stage also factors in brand loyalty and the type of user.

Occasion

Benefits sought

User status

Usage rate

Loyalty status

User status divides buyers into ex-users, potential users, first-time users, and regular users of a product.

Usage rate divides buyers into light, medium, and heavy product users.

Loyalty status divides buyers into groups according to their degree of loyalty.

Socioeconomic variables

Distribution:

Grouping customers based on where they go to purchase your product, such as online, store or through a catalog.

Decision Makers:

Grouping your customers based on who decides to purchase your product within the company structure.

A combination of bases

BENEFITS + DEMOGRAPHICS

BENEFITS + PSYCHOGRAPHICS

USAGE RATE + BENEFITS

Segmenting International Markets

Geographic location – regions

Economic factors – population income levels or overall level of economic development

Political and legal factors – the type and stability of government, receptivity to foreign firms, monetary regulations, and the amount of bureaucracy

Cultural factors – common language, religions, values and attitudes, customs, and behavioral patterns

Intermarket segmentation

– whether Japanese, Chinese, Thais, or Indians, they all consume rice

ADVANTAGES

Market Segmentation Advantages

Better match between market wants and product benefits.

DISADVANTAGES

Market Segmentation Disadvantages

Higher Marketing Costs

Higher Production Costs

Problems with Developing New Segments:

Cannibalism

Criteria for Good Segments

Identifiable

Reachable

Significant

Responsive

Stable

Requirements for Effective Segmentation

To be useful, a market segment must be:

        Measurable

Accessible

Substantial

Differentiable

Actionable

Measurable: Examples include the size, purchasing power, and profiles of the segments

Accessible: Refers to the fact that the market can be effectively reached and served

Substantial: Refers to the fact that the markets are large and profitable enough to serve 

Differentiable: Refers to the fact that the markets are conceptually distinguishable and respond differently to marketing mix elements and programs

Actionable: Refers to the fact that effective programs can be designed for attracting and serving the segments

Evaluating Market Segments

1. Segment size and growth

2. Segment structural attractiveness

3. Company objectives and resources

4. Segment size and growth:

5. Smaller versus larger segments

6. Growth potential

7. Segment structural attractiveness:

8. Competition

9. Substitute products

10. Power of buyers

11. Power of suppliers

12. Company objectives and resources:

13. Competitive advantage

14. Availability of resources

15. Consistent with company objectives

STEPS IN THE SEGMENTATION PROCESS

1. Determine Market Boundaries

2. Decide which Segmentation Bases to Use

3. Analyse (Consider) Segmentation Data

4. Develop a Profile of Each Segment

5. Target the Segments to be Served

6. Design a Marketing Plan

7. Targeting Segments

Examples:MARKET SEGMENTATION

Benefits Sought in Products

1. Levi’s Jeans:  DURABILITY

2. Elmer’s Glue-All : ADHESION

3. Revlon Cosmetics: HOPE

4. Lego Toys: POSSIBILITIES

5. Close-Up Toothpaste: WHITER TEETH AND FRESH BREATH