STRATEGIC MARKET SEGMENTATION & ANALYSIS

MARKET SEGMENTATION

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Segmentation is the process of splitting (segmenting) the entire market (everyone) into smaller groups that share similar traits.

HOW ARE MARKET SEGMENTS BEST DEFINED?

Identify homogenous groups of people having similar needs/wants

Differences within one segment should be small compared to differences among other segments The segmentation criteria should describe prospects clearly

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Must determine the size and the market potential

MARKET SEGMENT SHOULD BE:

Measurable

Size, purchasing power, and profile of segment

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Accessible

Can be reached and served Large and profitable enough to serve Respond differently Effective programs can be developed

Substantial

Differentiable

Actionable

SEGMENTING, TARGETING, POSITIONING

6. Develop Marketing Mix for Each Target Segment

Market Positioning

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5. Develop Positioning for Each Target Segment

4. Select Target Segment(s)

Market Targeting

3. Develop Measures of Segment Attractiveness

2. Develop Profiles of Resulting Segments

Market Segmentation
1. Identify Bases for Segmenting the Market

STRATEGIC MARKET SEGMENTATION

Segments
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value opportunities

capabilities/ segment match

targets positioning

BASES FOR MARKET SEGMENTATION

Geographic:
Nations, states, regions or cities

Where?
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Demographic
Age, gender, family size and life cycle, or income

Who?

Psychographic:
Social class, lifestyle, or personality

How?

Behavioral:
Occasions, benefits, or uses

Why?

MARKET SEGMENTATION ACTIVITIES & DECISIONS

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Market to be segmented

Generic Product type Product variant

Strategic analysis of segments Decide how to segment

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Finer segmentation strategies

Logic strategies

Product use situation Buyers need Purchase behavior

Forming segments
Judgment, experience, statistical data

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