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Industrial segmentation
Contents● Introduction● Approaches● Types of segmentation● Market segmentation● Customer segmentation● Product segmentation● Examples
1.Introduction● Segmentation is the process of dividing or
partioning according to the need
● The goal of segmentation is to simplify● There are no.of segments are in the industry
according to the particular domain● The software industry can be segmented by the
nature of product,location,customers,etc.
2.ApproachesThe basic appraches for segmantation are:● Two stage appraoch
>Macro segmenattion
>Micro segmenation● Nested approach● Bottomup approach
approach(cont.)Two stage approach:● Macro segmenation
here the sgmentation is done on the basis of industry location,SIC code,organisation size.
● Micro segmentation
this can be done by using product quality,buyer's attitude,price etc.
approach(cont.)● Nested approach:(
The above approach sometimes may be difficult to differentiate and made segmentation complex.so,
This process allow flexibility in selecting or avoiding thee criteria as suited to their businesses
approach(cont.)● Bottomup appraoch(Kolter model):
# This is “buildup” approach.
# Instead of seeing the customer as identical,view them as diiferent and proceed to identify the similarities
3.Segmenation Objective
4.Types of segmentation● Software industry can have various types of
segmentation as
* Market segmenatation
* Cutomer segmentation
* Product segmentation
* Brand segmentation● According to the industry domain segmentation
can be differed.
5.market segmentation● People or organization sharing with the demand
of similar products and services● Homogenous
● 4 p's are the key concept of market segmenation as Product,Pricing,Place,Promotion
Market seg(cont.)
Classification of market segmentation
● Geographic segmentationdivide market into location,regions,countries,cities
● Demographic segmantationdivide the market into groups based on age,gender,income.
● Psycographic segmentationsocial class,lifestyle
● Behavioral segmentationknowledge,attitude,uses & response to products
6.Product segmentation● Segmentation based on product● It is useful to classify the product according to the
customer needs
● Actions taken:
# Products were segmented based on volume and growth potential
# Analysis confirmed that more than 80% of margins came from less than 15% of product line
Product seg(cont.)● Results:
# Bottom 10% of products were removed or had their prices raised within 3 months
# helps in better understanding of the customers’ needs and wants.
# Improving service delivery standards.
7.Customer Segmentation● It is the practice of dividing the customer based
into group of individuals
● It can be done based on age,gender,interests,spending habits and so on
Customer seg(cont.)
Customer segmentation using decision tree
● Decision tree divides population into smaller groups repeatdely
● At anode,it selectts a single variable● There are many applications that this type of
hierarchical segmentation is useful● The figure for customer decision tree will be
CMS decision tree
8.ExamplesThe following are the examples of segments in
various industries● HP Industry
communication service provider
Gaming
Media & entertainment
eg(cont.)● Financial services
Banking
Capital & marketing
Insurance● TCS
financial services
Banking services
Manufacturing
Thank you