Download A. Demographic Segmentation

TOPIC 6 Copyright 4-2011 Business Resource Software, Inc.
privacy ¦ sitemap
Segmentation
A further choice to be made by companies deciding on their product mix is whether to
attempt to provide a product or range of products that appeals to the maximum number
of people or whether to select a small group or groups of people in the marketplace and
concentrate on pleasing them. The process of selecting carefully analyzed 'segments' of
the market and designing products to meet the requirements of that particular group of
people is known as market segmentation.
A large organization aiming at a major market share will try to satisfy many different
segments. There are various ways in which markets can be segmented:
A. Demographic Segmentation
This means by age or sex. For example, a shoe manufacturer might concentrate (as
some have) on children's shoes, on high-fashion shoes for women or on men's safety
shoes for industrial use, rather than attempt to provide shoes that will be reasonably
satisfactory for everybody in all situations.
B. Segmentation by Personal Taste
With products such as food, not everybody's tastes are the same, and a product that
satisfies most people will leave others not completely satisfied. People less than
completely satisfied by the 'standard' product form a ready market for a product
formulated rather differently to meet their particular requirement. The attempt to meet
these differing tastes is seen, for example, in the instant coffee market, which offers a
range of special blends in addition to the 'standard brew'. Taste may also be a factor of
course in terms of design, styling, color etc.'Segmentation by benefits' emphasizes the
different attributes of a product that appeal to different segments, e.g. the same car may
appeal to some people because of its economy, to others because of its safety features.
C. Geographical Segmentation
Concentration of effort can be achieved by aiming products only at those regions or
countries containing a high proportion of customers for a particular product.
D. Segmentation by Ethnic Groups
In societies where there are different ethnic groups, it will often be necessary and
profitable to produce distinct product ranges to suit their different tastes and
requirements. Obvious examples are ranges of food products and cosmetics.
E. Psychographic Segmentation
With many simple consumer products, such as cigarettes, drinks and toiletries, people
may have strong brand preferences, even though the measurable physical
performance, of the various brands may be virtually indistinguishable. Brand name,
packaging, promotion, etc. are used to give the brand an 'image' which enables
individual psychological and emotional preferences to be expressed. A related approach
is segmentation by lifestyles.Focused marketing is the term often applied to the whole
process (of which segmentation is part) of developing specific marketing mixes
developed for selected groups of people, rather than trying to be 'all things to all people.
F. Niche Marketing
It sometimes pays for a company to focus its efforts on a very small, carefully chosen
segment or 'niche'. In that way it can satisfy the needs of one particular group of people
extremely well and extremely profitably. The appeal of niche marketing to smaller
companies is niche markets are small harbours which the supertankers cannot reach.