Market Segmentation

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What is Market Segmentation?

Dividing a market into distinct groups of buyers on the basis of needs characteristics or behaviour who might require separate product or marketing mixes.

Steps in Market Segmentation

Steps in Market Segmentation, targeting and positioning.

Market Segmentation

1. Identify basis for segmentation

2. Develop Segment Profiles

Market Targeting

3. Develop measure of segment attractiveness

4. Select target segments

Market Positioning

5. Develop positioning for target segments

6. Develop a marketing mix for each segment

Levels of Market Segmentation Segment marketing

Individual marketing

Niche marketing

Local marketing

Levels of Market Segmentation

Segment marketing – Dividing the market into different segments on the basis of homogenous need.

Segmented on basis of broad similarity with regard to some attributes

Segmentation is also sometimes identifying, capturing & retaining potential new markets

Levels of Market Segmentation

Individual marketing – Extreme marketing in which marketers focus on individual customers.

Keep track of individual tastes & preferences of individual customers

Many companies are approaching individuals through e-mails to promote their products.

Levels of Market Segmentation

Niche marketing – Marketers effort to position their product or service in smaller markets that have similar attributes and have been neglected by other marketer

Segment further divided into sub segments to cater unsatisfied needs of small group is called as niche

Levels of Market Segmentation Local marketing – marketers offer

customized products to suit the local markets.

KFC introduced “Muslimized” or “Pakistani” products such as Spicy Chicken, Hilal Chicken, Zinger Extreme and more…

Bases for Consumer Market Segmentation

Market Segementation

GeographicalRegions, cities,

states, countries

DemographicAge,

gender,income,

occupation,religion,

social class,family size

PsychographicLife style,

personality,values,beliefs

BehavioralOccasions,Benefits,

Usage rate,Loyalty status

Bases for Organizational Market Segmentation

Market Segementation

DemographicsOperating Variables

PurchasingApproaches

Situational

Personal Characteristics

Of thePurchaser

Intermarket Segmentation

Forming segments of consumers who have similar needs and buying behaviour even though they are located in different countries.

World markets can be segmented on economic factors, political and legal factors.

Effective Segmentation

Measurable

Substantial

Accessible

Differential

Actionable

Target Market Selection Process

Evaluating the Market Segments

Selecting the Market Segments

Evaluating Market Segments

Before selecting the respective market segment, the company should evaluate the possible market segments in the current markets. It should identify and select its target consumers, give them their product according to their needs and establish that group of consumer in to permanent market segments.

Selecting the Market Segments

Single Segment Concentration: Focusing on a single segment gives the marketer the advantage of high sales as all the efforts are concentrated on that one segment

Example: Mercedes concentrates on upper income group

Selecting the Market Segments

Selective Specialization:

Process in which the company focuses its resources on a few segments and develops its expertise in fulfilling the needs of those segments

Selecting the Market Segments

Product Specialization :The firm makes a certain product that it

sells to several segments

Example: Microscope manufacturer who sells to university, government, and commercial laboratories.

Selecting the Market Segments

Full market coverage:

Company targets the full market rather than any specific segment.

Example: Hewlett-Packard targets the full market for its printers.

Selecting the Market Segments

Market specialization:

The firm concentrates on serving many needs of a particular segment

Example: A firm sells assortment of product to university laboratories.

Other Consideration

Ethical choice of market targets

Segment interrelationships and super segments

Segment-by-segment invasion plans

Inter segment cooperation

Ads In Focus - Imate

Ads In Focus – Protex Gum

Ads In Focus – Indoluna Care

Ads In Focus – Honda

Ads In Focus – HSBC

Print Ads

Print Ads

Print Ads

Print Ads

Conclusion

Market Segmentation is the backbone of marketing tactics. No matter of the locality market segmentation plays an important role in the products life cycle. It is one of that important practice that can never be ignored and specially in this era of mass customization.