Market Segmentation

• Market consist of buyers.• Buyers differ in one or more ways :

wants,resources, locations, buying attitudes, and buying practices.

• Through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reach more efficiently and effectively with products that match their unique needs.

• 5 important segmentation topics :

- Levels of Market Segmentation

- Segmenting Consumer Markets

- Segmenting Business Markets

- Segmenting International Markets

- Effective Segmentation

• Levels of Market Segmentation : - Mass Marketing - Segment Marketing - Niche Marketing - Micromarketing - Local Marketing - Individual Marketing

• Mass Marketing :

in 1900s, major consumer products companies held fast to mass marketing : mass producing, mass distributing, mass promoting about the same product in about the same way to all consumers.

E.g : Ford : black color, Coca –Cola.

Traditional argument for mass marketing :

- creates the largest potential market

- leads to the lowest cost

- higher margins

Many factors now make mass marketing difficult, as the world’s mass market have slowly splintered into profusion of smaller segments : the baby boomers, X Generation, Hispanic segment, Afro-American segment,” encik-encik Glodog “,

etc.

Baby Boomers - lahir tahun 1960 an ( ada yang

mengatakan setelah PD II ) - kekerabatannya kuat - fashion oriented - disposable incomenya besar - sangat percaya diri - work hard, play hard.

• X Generation :

- Lahir tahun 1980

- Ditandai dengan era MTV

• Y Generation :

- lahir tahun 1990

- tidak peduli dengan ras

• Digital generation : melek teknologi

• Analog generation : gaptek

• Digital immigrant : di antara ke 2 nya.

• Segment Marketing :

Isolating broad segments that make up a market and adapting the marketing to match the needs of one or more segments.

• Segment marketing offers several benefits over mass marketing :

- The company can market more efficiently

- targeting its products / services, channels

and communications program toward

only consumers that it can serve best

and most profitably.

- The company can also market more efficiently by fine-tuning its products, prices and programs to the needs of carefully defined segments.

- The company may face fewer competitors.

• Niche Marketing :

Focusing on sub segments or niches with distinctive traits that may seek a special combination of benefits.

E.g :

Green sands : niche dari minuman berkarbon dan minuman beralkohol.

• Whereas segments are fairly large and normally attract several competitors, niches are smaller and normally attract only one or a few competitors.

• Niche marketers presumably understand their niches’ needs so well that their customers willingly pay a premium price.

• Micromarketing :

is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations.

E.g : Tali Jagad.

Micromarketing includes Local Marketing and Individual Marketing.

• Local Marketing :Tailoring brands and promotions to the needs and wants of local customer groups : cities, neighborhoods, and even specific stores.

E.g : Korean Super Market in Jakarta Selatan, BRI Unit Desa, …… ? Kopi Kapal Api.

Local marketing has some draw backs :

- It can drive up manufacturing cost and marketing cost by reducing economic scale.

- Create logistics problems

- Brands overall image might be diluted if the product and message vary too much.

• Individual Marketing :

Tailoring products and marketing programs to the needs and preferences of individual customers – also labeled one-to one marketing, customized marketing , and markets –of –one marketing.

E.G : Dell Computer can deliver computer to individual customers loaded with customer –specified hardware and software.

• 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.

• Segmenting Consumer Market : - Geographic Segmentation - Demographic Segmentation - Age and Life- Cycle Segmentation - Gender Segmentation - Income Segmentation - Psychographic Segmentation - Behavioral Segmentation - Occasions Segmentation

• Geographic Segmentation :

Dividing 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.

• E.g : Kopi Kapal Api.

• Paying attention to geographical differences brings the consequences in communication.

• E.g : Cuma gopek, ecek-ecek, etc.

• Demographic Segmentation :

Dividing the market into groups based on demographic variables such as age, gender, family size, income, occupation, education, religion, race and nationality.

• Demographic factors are the most popular bases for segmenting customer groups. One reason is that consumer needs vary closely with demographic variables. Another is that demographic variables are easier to measure.

• Age and life cycle segmentation :

Offering different products or using marketing approaches for different age and life cycle groups. E.g : Mc Donald’s

targets children, teens, adult and seniors with different ads and media.

• Its ads to teens feature dance-beat music, adventure, and fast –paced cutting from scene to scene; ads to seniors are softer and more sentimental.

• Procter & Gamble boldly targets its Oil of Olay Pro Vital Series sub brand at women over 50 years of age. It is specially designed to meet the increased moisturization needs of more mature skin.

• Contoh kasus produk lokal :

produk susu dengan model Rae Sita dan anaknya.

• Gender Segmentation :

Dividing the market into different groups

based on sex. E. g :

Sari Ayu, Mustika Ratu, Elle Credit Card,

Lux, Virginia Slims.

Honda Jazz ? Starlet ?

• Income segmentation :

Dividing the market into different income groups. Income segmentation has long been used by marketers of products and services such as automobiles, boats, clothing, cosmetics, financial services and travel.

• E.g :

Prada, sells for USD 450

Luis vuiton, sells for USD 8000

• Contoh lokal :

- Puskesmas

- Mobil Timor

- MR 90

• Psychographic segmentation : Divides buyers into different groups based on social

class, life style, or personality characteristics. People in the same demographic groups can have very different psychographic make up.

E.G : - Jeep targets people who want to leave the civilized world behind. - Marlboro : macho - Camel : adventure

• Behavioral Segmentation :

Divides buyers into groups based on their knowledge, attitudes, uses, or response to a product. Many marketers believe that behavior variables are the best starting point for building market segment.

E.g : Refagan “eceran”, Panadol “eceran”.

• Occasions segmentation :

Dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchase item.

E.g :Coke in the morning ( Coca cola ), pink rose / chocolate for valentine.

• Benefit Segmentation : Dividing the market into groups according

to the different benefits that consumers seek prom the product.

E. g : tooth paste :economic, medicinal, cosmetic, and taste.

- Enzim : mencegah sariawan - Pepsodent : mencegah gigi berlubang. - Colgate : taste

• Segmenting Business Market :

Consumer and business marketers use many of the same variables to segment their markets. Business buyers can be segmented geographically, demograpihically, or by benefits, etc.

• Segmenting International Markets :

Companies can segment international markets using one or combination of several variables :

- geographic locations

- economic factors

- political and legal factors

- cultural factors

• Segmenting international markets on the basis of geographic, economic, political, cultural and other factors assumes that segments should consist of clusters of countries.

• However,many companies use a different approach called INTER MARKET SEGMENTATION : forming segments of consumers who have similar needs and buying behavior even though they are located in different countries.

• E.g :

- Mercedes- Benz targets the world’s well-

to-do , regardless of their country.

- MTV targets the world’s teen agers.

• One study of more than 6500 teen agers from 26 countries showed that teens around the world live surprisingly parallel lives :

- drinking coke

- dining on big macs

- surfing the Net on their computers

• The world’s teens have a lot in common :

they study, shop and sleep.

They are exposed to many of the same major issues : Love, crime, homelessness, ecology and working parents.

• In many ways they have more in common with each other than with their parents.

MTV bridges the gap between cultures, appealing to what teens around the world have in common.