MARKET SEGMENTATION

BY- SUNIT KUMAR MISHRA

 CONCEPT AND DEFINITION

The concept of market segment is based
on the fact that the market of commodities
are not homogeneous but they are
heterogeneous. Market represent a group
of customer having common
characteristics but two customer are never
common in their nature, habits, hobbies
income and purchasing techniques.

 According to Philip kotler , Market

segmentation is sub-dividing a market into
distinct and homogeneous subgroups of
customers, where any group can
conceivably be selected as a target market
to be met with distinct marketing mix.

 Market Segmentation is a method of

dividing a market (Large) into smaller
groupings of consumers or organisations
in which each segment has a common
characteristic such as needs or
behaviour.

Henry Ford epitomized this strategy when he offered the

Model- T Ford in one colour , black.

LEVELS OF MARKET
SEGMENTATION

1. 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

FLEXIBLE MARKET OFFERING

Even in segments 100 % needs are not
same consists of two parts
1.Naked Solution :- products and services that
all members of the segment values.
2.Discretionary options :- that some segment
members value. Each option might carry an
additional charge.
Example: Automobile industry basic model is
same but for A.C , power steering, power
window buyer

has to pay extra price.

Delta Airlines offers all economy
passengers a seat and soft drinks. It
charges economy passengers extra for
alcoholic beverages.

 Market Segments can be defined in many

different ways. One way to carve up a
market is to identify Preference
segments
Suppose ice cream buyers are asked how
much they value sweetness and
creaminess as two product attributes.
Three different patterns can emerge.

Homogeneous preference :
where all the consumer have roughly the same preferences.
We would predict that existing brand would be similar and cluster
around the middle of the scale in both sweetness and
creaminess.

Diffused preference :
consumers vary greatly in their preferences

Clustered preference :

creaminess

sweetness

Homogeneous Preference
-no natural segments
-all buyers have same preference

creaminess

sweetness

Diffused Preference
-no pattern (or poor research)
-take center position

creaminess

sweetness

Clustered Preference
-natural segments
-increases as number of competitors increases

2. NICHE MARKETING

Group of customers seeking a distinctive mix of benefits who are

ready to pay extra premium.
Niche = segment
sub segments
Eg. Washing detergents
hard & gentle washes . Surf
excel for tough stains ( hard on clothes) & Ezee from Godrej for
delicate clothes.
--- Astha , Sanskar , Q TV focus on religion & spiritualism.
DISTINCT NEEDS
PAY PREMIUM
SPECIALIZATION
LESS COMPETITION
POTENTIAL

ROLLS ROYCE

3. LOCAL MARKETING

Marketing programs tailored to the needs & wants of local customer

groups in trading areas, neighborhoods , etc.
this trend is called grass roots marketing.
Ex. Spiderman 3 was released in 5 different language in India
including bhojpuri.

Pune
sarees

Chitle
Kashmiri silk

4. INDIVIDUAL MARKETING

Ultimate segmentation segments of 1 or customized marketing or

one to one marketing.
Customerization empower the consumers to design the product or
service offering of their choice.
Ex. Paint companies have started doing this- Asian Paint , Nerolac ,
Berger Paints
Arvind mills launched Ruffn Tuff Jeans, branded ready to stitch

GEOGRAPHIC SEGMENTATION
Divide the market into different group based on :
Region South India , North , Western Region, East
City metro cities, cities with population more than 1
million
World
Density
Climate
States
Ex.- Mcdonalds globally, sell burgers aimed at local
markets, for example, burgers are made from lamb in
India rather then beef because of religious issues. In
Mexico more chilli sauce is added and so on.

DEMOGRAPHIC
SEGMENTATION

As people age their needs and wants change, some

organisations develop specific products aimed at
particular age groups for example nappies for babies,
toys for children, clothes for teenagers and so on.

Gender segmentation is commonly used within the

cosmetics, clothing and magazine industry.
In the UK we have also seen the introduction of Maxim,
(www.maxim-magazine.co.uk) a male lifestyle
magazine covering male fashion, films, cars, sports and
technology. \


Income segmentation is another strategy used by
many organisations. Stores like Harrods, Harvey
Nicohals are predominantly aimed at the affluent
market. Daewoo aim their vehicles at price sensitive
buyers who require a bundle of benefits for the price.
In today's globally competitive environment brands are
specifically developed and positioned within particular
income segments inorder to maximise turnover.
Products and services are also aimed at
different lifecycle segments. Holidays are developed
for families, the 18-30's singles, and for those in their
50's.

PSYCHOGRAPHIC
SEGMENTATION

 Lifestyle groups
Yuppie Associations
Mobile
High valued house/flat
Good Salary
Young branded car.
Third Agers Associations.
50's
Retired early from profession.
Time to spare
Adventure Seekers

BEHAVIOURAL SEGMENTATION

OCCASIONS - Archies and Hallmark

cards, Monaco at tea time.
BENEFITS Shampoo for hair conditioning,
cleaning , hair fall defence dandruff control
USER STATUS- light medium heavy
user
LOYALTY STATUS- hardcore loyal , split
loyal- loyal to 2-3 brand ,shifting loyal,
switcher