Market segmentation

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Market Segmentation

Presented By:

Patel Chintan

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Definition

Market Segmentation is a method of “dividing a market (Large) into smaller groupings of consumers or organizations in which each segment has a common characteristic such as needs or behavior.”

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Level Of Market SegmentationSegment MarketingNiche MarketingLocal MarketingGeographic segmentation

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The Need For Marketing Segmentation

The marketing concept calls for understanding customer and satisfying there needs better than the competition.

Different customers have different needs, and its rarely possible to satisfy all the customers by treating them alike.

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Segment Marketing Consists of a group of customers who share a

similar set of needs and wants. Identifiable Group with in a Market with

Similar• Wants• Purchasing Power• Geographical Location• Buying Attitudes

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Niche Marketing A Niche is a narrowly defined group of

customers seeking unique solution. Niche segment consists of buyers with high purchasing power, who have unique needs and strong motivation to fulfill their needs.(Ex:Ezee)

Local Marketing It is done to satisfy the needs of local

people. For example : Spiderman movie was

released in India in different languages.

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Individual Marketing It is also known as “One to one marketing”. It is used to satisfy the individual needs of

customers. (For Example: Asian and Nerolac paints

allow customers to mix and match the colours of their choice.)

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Criteria For Market Segmentation

Indefinable: the differentiating attributes of the segments must be measurable so they can be identified.

Accessible: the segments must be reachable through communication and distribution channels.

Unique needs: to justify separate offerings, the segments must respond differently to different marketing mixes.

Substantial: the segments should be sufficiently large to justify the resources required to target them.

Durable: the segments should be relatively stable to minimize the cost of frequent changes.

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Market Segmentation9

Geographic Demographic Psychographic Behavioral

Demographic Operational

variables Purchasing

approaches Situational factors Personal

characteristics

Consumer market Industrial market

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Geographic segmentation

Regions: by continent, country, state or even neighborhood

Size of the area: segmented according to size of population

Population density: often classified as urban, suburban, or rural

Climate: according to weather patterns common to certain geographic regions

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Demographic segmentation

Demographic segmentation consists of dividing the market into groups based on variables such as: Age Gender Income Social class Life style

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Age : Marketers design, package and promote products differently to meet the wants of different age groups. Good examples include the marketing of toothpaste

(contrast the branding of toothpaste for children and adults) and toys (with many age-based segments).

Gender: Gender segmentation is widely used in consumer marketing. The best examples include clothing, hairdressing,

magazines and toiletries and cosmetics. Income: Many companies target affluent

consumers with luxury goods and convenience services. Good examples include Coutts bank; Moet &

Chandon champagne and Elegant Resorts - an up-market travel company.

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Lifestyle: Marketers are increasingly interested in the effect of consumer "lifestyles" on demand. Unfortunately, there are many different lifestyle categorization systems, many of them designed by advertising and marketing agencies as a way of winning new marketing clients and campaigns.

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Psychographic segmentation Psychographic segmentation groups

customers according to their lifestyle. Activities, interest, and opinions (AIO) surveys are one tool for measuring lifestyle. Activities Interest Opinion Values

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Behavioral Segmentation

Behavioral segmentation is based on actual customer behavior towards products. Some behavioralistic variable include: Opinions, interests and hobbies Degree of loyalty Occasions Benefits sought Usage

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Opinions, interests and hobbies – this covers a huge area and includes consumers’ political opinions, views on the environment, sporting and recreational activities and arts and cultural issues.

Degree of loyalty – customers who buy one brand either all or most of the time are valuable to firms.

Occasions – this segments on the basis of when a product is purchased or consumed.  

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Industrial base segmentation

Demographic Industry Company size Location

Operating variables Technology User status Customer

capabilities

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Industrial base segmentation Purchasing approaches

Purchasing function organization(Centralized or decentralized)

Power structure(engineering dominated or financially dominated

Nature of existing relationship Purchasing criteria(Quality,

price,service)

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Industrial base segmentation Situational factors

Urgency Specific application Size of order

Personal characteristics Buyers &sellers similarities Attitude towards risk loyalty

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Thank You…