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What is Market Segmentation?

Market segmentation is a

marketing strategy that involvesdividing a broad target market intosubsets of consumers who have

common needs and applicationsfor the relevant goods and services.

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Segmentation Strategies

 A market segment should be… measurableaccessible by communication and

distribution channelsdifferent in its response to a

marketing mixdurable (not changing too quickly)substantial enough to be profitable

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Why use segmentation?

For companies to better understand theneeds of a specific customer base

Identify other applications for theirproducts that may not have beenobvious before

To improve the overall efficiency of thecompany's marketing efforts

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egmentation

argeting

ositioning

T

P

S

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Consumer Market

Segmentation

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Segmentation Variables

Demographic SegmentationGeographic Segmentation

Pyschographics Segmentation

Behavioural segmentation

Consumer Market Segmentation

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Demographic Segmentationoriginates from the word ‘demography’

 which means a ‘studyof population’ 

can be divided into

age, gender, income,and family lifecycleamongst other

 variables

Consumer Market Segmentation

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Geographic SegmentationGeographical segmentation divides markets

into different geographical areas. Marketersuse geographic segmentation becauseconsumers in different areas may displaycertain characteristics and behaviours in

that particular region. An area can bedivided by the town, the region or thecountry.

Consumer Market Segmentation

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Psychographics Segmentationcan be broken down into lifestyle,

social class, and personalitycharacteristics.

Lifestyles segmentation

Personality Characteristics

Social Class Segmentation

Consumer Market Segmentation

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Behavioural Segmentation Refers to why people purchase a product or service

Consumer Market Segmentation

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Business Market

Segmentation

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based on regional variables such as customer concentration,regional industrial growth rate, and international

macroeconomic factors.

Business Market Segmentation

Geographic segmentation

based on factors such as the size of the organization,its industry, position in the value chain, etc.

Customer Type

Buyer Behaviorbased on factors such as loyalty to suppliers, usage

patterns, and order size.

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Targeting

 various marketing strategies andpromotional schemes according to the tastes

of the individuals of particular segment.

Once market segments are created,

organization then targets them.

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Kinds of Targeting/ 3 Targeting

Options an Organization Can Adopt Option 1 

Undifferentiated marketing - Sometimesreferred to as mass marketing the firm may decide toaim its resources at the entire market with one

particular product.

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Option 2 Differentiated marketing strategy  - Where the firmdecides to target several segments and developsdistinct products/services with separate marketing

mix strategies aimed at the varying groups.

Kinds of Targeting/ 3 Targeting

Options an Organization Can Adopt

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Option 3Concentrated Marketing: Where the organisationconcentrates its marketing effort on one particularsegment. The firm will develop a product that caters

for the needs of that particular group.

Kinds of Targeting/ 3 Targeting

Options an Organization Can Adopt

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Definition & Goalhow organizations want their

consumers to see their productabout how you want consumers to

perceive your products and servicesand what strategies you wouldadopt to reach this perceptual goal

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To influence how the product isperceived by consumers

 A product's position is howpotential buyers see the product

 A platform for the brand: It

facilitates the brand to get throughto the mind of the target consumer

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Developing a Positioning Strategy

depends much on how competitorsposition themselves:

‘a me too’ strategy - positionthemselves close to their competitorsso consumers can make a direct

comparison when they purchase ‘away from their competitors’

strategy  

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3 Types of ConceptsFunctional positions

- Solve problems.- Provide benefits to customers.- Get favorable perception by

investors (stock profile)and lenders.

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Symbolic positions

- Self-image enhancement.- Ego identification.

- Belongingness and socialmeaningfulness.- Affective fulfillment.

Experiential positions- Provide sensory stimulation.

- Provide cognitive stimulation.

C I IA’S O SUCC SS UL

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CRITERIA’S FOR SUCCESSFUL

POSITIONINGa. Clarity: While positioning its brand the

firm must be able to position itself in bothdistinct value, proposition, and to its target

audience.b. Consistency: Consistency inpositioning means keeping the positioningplank/bases intact for longtime. But it does

not mean that the firm must change itspositioning bases even though its survivalis at stake. The firm must be flexible to thechanging environment.

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c. Credibility: The firm must delivertrustworthy and believable valueproposition. There should be perfect

match between promise and action.d. Competitiveness: For surviving in

this competitive and changing

environment innovative resources,talent pool, competitive advantage,strong financial backup etc are very

important.

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SUMMARY