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Market Segmentation: Marketing Management Group 6

Market segmentation involves dividing a market into distinct groups of customers based on characteristics like geography, demographics, psychographics, and behaviors. The key benefits are identifying new product opportunities, designing effective marketing programs for specific customer segments, and improving resource allocation. Segments must be identifiable, accessible, have unique needs, be large enough to target, and relatively stable over time. Common bases for consumer segmentation include geographic factors, demographics like age and income, psychographic lifestyle assessments, and behavioral variables such as brand loyalty and product usage.

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Tareak Isteak
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58 views

Market Segmentation: Marketing Management Group 6

Market segmentation involves dividing a market into distinct groups of customers based on characteristics like geography, demographics, psychographics, and behaviors. The key benefits are identifying new product opportunities, designing effective marketing programs for specific customer segments, and improving resource allocation. Segments must be identifiable, accessible, have unique needs, be large enough to target, and relatively stable over time. Common bases for consumer segmentation include geographic factors, demographics like age and income, psychographic lifestyle assessments, and behavioral variables such as brand loyalty and product usage.

Uploaded by

Tareak Isteak
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Market

Segmentation
MARKETING MANAGEMENT
GROUP 6
What is Market Segmentation?
THE BREAKING DOWN OR BUILDING UP OF
POTENTIAL BUYERS INTO GROUPS CALLED
MARKET SEGMENTS
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


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.
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.
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.
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.
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.
Requirements of market segments

 Durable: the segments should be relatively stable to


minimize the cost of frequent changes.
Bases for segmentation in
consumer markets
Geographic

Demographic

Psychographic

Behavioralistic
Geographic segmentation

Geographic segmentation tries to divide


markets into different geographical units:
 Regions
 Size of the area
 Population density
 Climate
Geographic segmentation

 Regions: by continent, country, state or


even neighborhood

 Size of the area: segmented according


to size of population
Geographic segmentation

 Population density: often classified as


urban, suburban, or rural

 Climate: according to weather patterns


common to certain geographic regions
Demographic segmentation
Demographic segmentation consists of dividing the market into groups
based on variables such as:

• Age • Social class


• Gender • Life style
• Income
Demographic segmentation

 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

 Gender: Gender segmentation is widely used in consumer


marketing.

The best examples include clothing, hairdressing, magazines and


toiletries and cosmetics.
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.
Demographic segmentation

 Social class: Consumers "perceived" social class


influences their preferences for cars, clothes, home
furnishings, leisure activities and other products &
services.
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.
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
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
Behavioralistic segmentation

 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

 Degree of loyalty – customers who buy one


brand either all or most of the time are
valuable to firms.
Behavioralistic segmentation

 Occasions – this segments on the basis


of when a product is purchased or
consumed.
Behavioralistic segmentation

 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.
The end
THANK YOU

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