Market Segmentation
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Market segmentation involves dividing a market into distinct groups of customers with distinct needs, characteristics, or behaviors who might require separate products or marketing mixes. The key benefits are identifying new product opportunities, designing effective marketing programs for homogeneous groups, and improving resource allocation. Segments must be identifiable, accessible, responsive to different offers, large enough to target, and stable over time. Common bases for segmentation include geographic, demographic, psychographic, and behavioral factors such as age, gender, income, lifestyle, customer behavior, and usage occasions.
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Market segmentation involves dividing a heterogeneous market into homogeneous sub-units. It segments consumers, not products or prices. Markets can be segmented based on geographic, demographic, psychographic, behavioral, and other factors. Segmentation allows companies to target specific groups of consumers and develop more effective marketing strategies tailored to each segment's unique characteristics and needs. Titan watches, for example, segments its market based on age, income level, and preferences for design or gold. Effective segmentation ensures segments are measurable, accessible, substantial, differentiated, and actionable.
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Research on the influence of personality on leadership
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Market Segmentation
- 2. THE BREAKING DOWN OR BUILDING UP OF POTENTIAL BUYERS INTO GROUPS CALLED MARKET SEGMENTS What is Market Segmentation?
- 3. Benefits of Market Segmentation Identifies opportunities for new product development Helps design marketing programs most effective for reaching homogenous groups of buyers Improves allocation of marketing resources
- 4. 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.
- 5. Difference between a mass market and target market Mass market refers to treatment of the market as a homogenous group and offering the same marketing mix to all customers.
- 6. Difference between a mass market and target market Target market on the other hand recognizes the diversity of the customers and does not try to please all of them with the same offering.
- 7. Requirements of market segments 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.
- 8. Requirements of market segments 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.
- 9. Requirements of market segments Durable: the segments should be relatively stable to minimize the cost of frequent changes.
- 10. Bases for segmentation in consumer markets Geographic Demographic Psychographic Behavioralistic
- 11. Geographic segmentation Geographic segmentation tries to divide markets into different geographical units: Regions Size of the area Population density Climate
- 12. Geographic segmentation Regions: by continent, country, state or even neighborhood Size of the area: segmented according to size of population
- 13. Geographic segmentation Population density: often classified as urban, suburban, or rural Climate: according to weather patterns common to certain geographic regions
- 14. Demographic segmentation Demographic segmentation consists of dividing the market into groups based on variables such as: • Age • Gender • Income • Social class • Life style
- 15. 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). Demographic segmentation
- 16. Gender: Gender segmentation is widely used in consumer marketing. The best examples include clothing, hairdressing, magazines and toiletries and cosmetics. Demographic segmentation
- 17. Demographic segmentation 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.
- 18. Demographic segmentation Social class: Consumers "perceived" social class influences their preferences for cars, clothes, home furnishings, leisure activities and other products & services.
- 19. Demographic segmentation 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.
- 20. 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
- 21. Behavioralistic segmentation Behavioralistic segmentation is based on actual customer behavior towards products. Some behavioralistic variable include: Opinions, interests and hobbies Degree of loyalty Occasions Benefits sought Usage
- 22. 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. Behavioralistic segmentation
- 23. Degree of loyalty – customers who buy one brand either all or most of the time are valuable to firms. Behavioralistic segmentation
- 24. Occasions – this segments on the basis of when a product is purchased or consumed. Behavioralistic segmentation
- 25. Benefits sought – this requires marketers to identify and understand the main benefits consumers look for in a product. Usage – some markets can be segmented into light, medium and heavy user groups. Behavioralistic segmentation