Download MARKET_SEGMENTATION

INTRODUCTION
 All corporate marketing activities have to be necessarily carried
out in such a way that they lead to generation of surplus funds.
 Organizations that sell to consumers and industrial markets
recognize that they cannot appeal to all buyers in those markets or at
least not to all buyers in the same way.
 Buyers are too numerous, too widely scattered and too varied in
their needs and buying practices.
 Different companies vary widely in their abilities to serve
different segments of the market.
MARKETING AREAS
Areas of
marketing
Mass marketing
Product variety
marketing
Target marketing
Target marketing has 3 steps
MARKET
SEGMENTATION
MARKET
TARGETTING
MARKET
POSITIONING
• Identify basis
for
segmenting
the market
• Develop
profiles of
the resulting
segments
• Develop
measures of
segment
attractiveness
• Select the
target
segments
• Develop
positioning
for each
target market
segment
• Develop
marketing
mix for each
target
segment
WHY SEGMENTATION???
To develop marketing activities
To identify the suitable customers
Increase marketing effectiveness
Generate greater customer satisfaction
To identify strategic opportunities
Allocation of marketing budget
Adjustment of product to the market need
To estimate the level of sales in the market
To overcome competition effectively
To develop effective marketing programmes
To contribute towards achieving organisation goals
MARKET SEGMENTATION
 According to Philip kotler “Market Segmentation is the process
of sub-dividing the customers into homogenous sub-set of
customers’’
 Segmentation is essentially the identification of subsets of
buyers within a market that share similar needs and demonstrate
similar buyer behaviour.
 Segmentation aims to match groups of purchasers with the
same set of needs and buyer behaviour. Such a group is known as a
'segment'.
 Market segmentation is one of the key elements of modern
marketing.
 The process of defining and subdividing a large homogenous
market into clearly identifiable segments having similar needs,
wants, or demand characteristics is called Segmentation.
 Its objective is to design a marketing mix that precisely
matches the expectations of customers in the targeted segment.
BASES FOR SEGMENTING CONSUMER MARKETS
 There is no single way to segment a market.
 A marketer has to try different segmentation variables, alone
and in combination, to find the best way to view the market
structure.
 Market consists of buyers differing in one or more ways. They
may differ in their wants, resources, locations, buying attitudes
and buying practices
 Market segmentation is the process of dividing the market
into several groups and/or segment(s) based on factors such as
a)Geographic
b)Demographic
c)Psychological
d)Behavioural factors
GEOGRAPHIC SEGMENTATION
 Geographic segmentation divides the market into different
geographical units such as NATIONS, STATES, REGIONS,
COUNTRIES, CITIES or NEIGHBORHOODS.
 A company may decide to operate in one or a few geographical
areas or to operate in all areas but pay attention to geographical
differences in needs and wants
 A company can target one or more areas and must be aware of
the fact that data according to geographic segmentation may vary
due to population shift.
DEMOGRAPHIC SEGMENTATION
 Demographic segmentation divides the market into groups
based on demographic variables such as AGE, SEX, FAMILY
SIZE, FAMILY LIFE CYCLE, INCOME, OCCUPATION,
EDUCATION, RELIGION, RACE, GENERATION, SOCIAL
CLASS AND NATIONALITY.
 Demographic factors are the most popular bases for
segmenting customer groups.
Demographic
variable
Age
Products segmented on
demographic basis
Toys
Sex
Clothing, hair dressing, cosmetics,
magazines
Family size
Soap and detergent powder
Income
Cars, clothing, travel
Occupation
Books, news papers, magazines
Education
Household services, land and
immovable property
Food, class, gift items
Religion
PSYCHOGRAPHIC SEGMENTATION
 In psychographic segmentation, buyers are divided into
different groups based on LIFE STYLE OR MODE OF LIVING
OR PERSONALITY CHARACTERISTICS.
 People in the same demographic group can have very
different psychological traits.
 Psychological profiles are often used as a supplement to
geographic and demographics when these does not provide a
sufficient view of the customer behaviour.
BEHAVIOURAL SEGMENTATION
 In behavior segmentation, buyers are divided into groups
based on their knowledge, attitude, uses or responses to a product.
 Many marketers believe that behavior variables are the best
starting points for building market segments.
 Some of the behaviouristic variables which are taken into
consideration by the marketers are PURCHASE OCCASION,
BENEFITS, USER STATUS, USAGE RATE, LOYALTY
STATUS, READINESS STAGE AND ATTITUDE TOWARD
PRODUCT.
BASES FOR SEGMENTING INDUSTRIAL MARKETS
 Industrial markets can be segmented using many of the same
variables used in consumer market segmentation.
 Industrial buyers can be segmented geographically or by
benefits sought, user status, user rate, loyalty status, readiness
state and attitudes.
 Other variables which come into play include
a) Industrial customer demographics
b) Operating characteristics
c) Purchasing approaches
d) Situational factors
e) Personal characteristics
REQUIREMENTS OF EFFECTIVE SEGMENTATION
In addition to having different needs, for segments to be practical
they should be evaluated against the following criteria
MEASURABILITY
ACCESSIBILITY
SUBSTANTIALITY
ACTIONABILITY
IDENTIFIABLE
UNIQUE NEEDS
DURABLE
REFERENCES
http://www.buzzle.com/articles/geographic-segmentation.html
http://pure.au.dk/portal-asb-student/files/11462/BA.pdf
PRINCIPLES OF MANAGEMENT
BY PHILIP KOTLER
MARKETING MANAGEMENT
BY SHERLEKAR