Market Segmentation

Psychographics Segmentation Variables

Market Segmentation SOCIAL ISSUES
- enables a company to develop a positioning and PERSONAL INTEREST
marketing mix strategy that can satisfy a smaller, more Religion
focused range of customers needs and wants given Family
the identified opportunity ( this smaller focus is also Politics
referred to as a niche ). Home
Work
There are various ways to do market segmentation for Food
consumer products: Drugs
1. by need and wants (or benefit) Health
Womens right
2. by socio-demographics Friends
3. by psychographic Sex
Shopping
4. by consumer behavior
Behavioral Segmentation
Need Segmentation
Another method of market segmentation is by
- A major way to segment a market is by identifying
consumer behavior. Understanding customer behavior
consumer needs and wants.
has its obvious applications. For instances:
Emotive Needs Segmentation
Customers who tend to be loyal ta a brad will
-Most need segmentation is based on consumer most likely not respond to a competitors price
functional needs. There I another way to do cut, a least, not immediately.
segmentation, and this is via emotive needs classified Place or distribution, display, and packaging
by market research firm TNS as Needscope: can be critical for self-conscious buyers of
intimate products such as lingerie and
Expressive or how one looks - used by
condoms.
fashion and personal care
Gratification or how one feels used by Behavioral Segmentation Variables
food and pharmaceutical products 1. Purchase frequency
Combination or how one looks and feels Regular
used by the automotive and telecom Occasional
industries. 2. User status Non-
SocioDemographics Segmentation user, First time user Ex-user,Regular user
- most often starts with demographics. 3. Usage rate Heavy
Demographic segmentation deals with questions such user, Light user Medium user
as who you are and how much do you earn and is 4. Loyalty status
commonly used when planning and allocating selling Absolute, Medium, None
efforts. Even during political elections, demographics Strong, Small
can be used to plot a candidates strategy. 5. Readiness
Unaware, Interested, Intending to buy
Demographic segmentation variables - Aware, Desircus
1. Age
2. Gender Internet Segmentation
3. Civil Status
4. Income -for online behavior, Forester
5. Civil Status Research released their North American
6. Profession Technographics Empowerment Survey done in 2009
7. Location (a. Density b. Geographic) with the following behavior segments or internet
8. Family Size audience:
9. Religion Inactives (17%)
10. Nationality Spectators or those who simply read, listen or
11. Climate watch online content (70%)
Joiners or those who maintain a profile on
social networking sites (59%)
Psychographics Segmentation Collectors or those who use RSS feeds, vote
- is concerned more with answers to for websites online or add tags to web pages
questions such a what to do (instead of or photos (20%)
who you are ) and how you spend your Critics or those who comment on somebody
money (instead of how much you earn) and elses blog, forums, or rate product and
is now often used for creating advertising services (37%)
messages.
 Conversationalists or those who post updates
on social networking sites (33%)
Creators or those who share personal blogs,
web pages or video or music they created
(24%)
Price Segmentation
- Marketers can always do
segmentation by price. There will always be buyers
who are quite price sensitive, especially in an
economic slowdown and buyers who are just the
opposite, especially in an economic boom.
Industrial Segmentation
- or business-to-business marketing,
has fewer buyer who order in large quantities and has
more levels of decision-makers. The demand of
industrial clients is inelastic, or quantity may not
change in price and may fluctuate according to the
business climate.
Industrial or Business-to-business segmentation
VARIABLE
EXAMPLES
1. Demographic
Industry, company size, Geography
2. Operating Variable
User/Non-user status, Customer
requirements, Technology
3. Purchasing Approaches
Purchase policies, Organization,
Decision criteria
4. Situation factors
Urgency, Specific application or End-
Use, Order size
5. Persona characteristics
Compatibility, attitude towards risk,
Loyalty
Profitability is Key
Profitability is the full proof guarantee that
your marketing strategy is effective. There
is a lot to plan about but when theres no
profit that translates to it, it may even be
considered useless.
Being radical, in terms of market strategy, is a
precautionary measure. Some of the well-
established companies these days try to pump
out negative advertising. Its both effective and
radical. However, it also puts the company into
the hot water. Infamous-ity. It might even put
their financial gain into a complete jeopardy.
Brand management is not done overnight. It can
even take a generation to measure its
effectivity.
Again, profitability is key.
Market Measurement
-a market is composed of customers
and competition. It has a group of actual and potential
buyers with similar needs and wants interacting with
seller offering various products or services to satisfy
those needs and wants. There are two criteria for
market attractiveness:
1. Market size - is defined through the market
volume and the market potential. The market
volume exhibits the totality of all realized sales
volume of a special market. The volume is
therefore dependent on the quantity of
consumers and their ordinary demand.
Furthermore, the market volume is either
measured in quantities or qualities.
Market growth -A simple means of forecasting
the market growth rate is to extrapolate
historical data into the future. While this
method may provide a first-order estimate, it
does not predict important turning points. A
better method is to study market trends and
sales growth in complementary products. Such
drivers serve as leading indicators that are
more accurate than simply extrapolating
historical data.
Important inflection points in the market
growth rate sometimes can be predicted by
constructing a product diffusion curve. The
shape of the curve can be estimated by
studying the characteristics of the adoption
rate of a similar product in the past.
Ultimately, many markets mature and decline.
Some leading indicators of a market's decline
include market saturation, the emergence of
substitute products, and/or the absence of
growth drivers.
Qualified customers within a market would have the
ff. characteristics with the acronym N-P-A:
1. Need answers the question How many
percent of the market would need the
product? To know this, a floor polisher
marketer can hire a market research agency to
conduct a survey and ask question like to
what extent would you be interested in
owning a floor polisher? If two out of every
ten surveyed say they are definitely
interested, then 20% of the total number of
customers would be the potential market.
2. Pay- there must be enough power for the
consumer to be able to pay for the product,
The higher the price of floor polisher, the
lesser the number of people who can afford
it.
3. Authority and Availability- person below 18
years of age , they have o authority to use
these product. Men are obviously not the
consumers to buy bikinis, so they constitute
another category of those without authority,
unless they were given authority as in the
case of 7-11 japan where men buy pantyhose
on the behest of their wives.
Research Suppliers
-for fast moving consumer products
such as food and beverages, and persona care
products, one way to know which market size is
through retail audit report from Nielsen. The
retail audit report summarize sales and market
shares of over 100 product categories in several
ways : by brand, by product group , by type of
 store, and by region. It also provides information
about distribution and inventory levels (including
out-of-stock incidence), and both buying and
selling prices of retailers.

Industrial Products Market Measurement

-Companies will usually submit actual
sales and production figures to their industry
associating for compiling and summation. Often,
total industrial sales and not individual company
sales are reported to maintain confidentiality for
each company in the same industry.
Estimating Market Demand
Before market demand for a particular
product can be defined it is important to identify
specific product groupings.
BASES Model (Burkes Advance Sales
Estimating System)
-one of the several scientific models
available for estimatingdemand for specific brand.
- predicts the sales of new re-launched
products. It is capable of forecasting the sales of line
extensions when new variety, size, or pack format is
introduced.
-enables marketers to choose from
among 6-10 simulations to get the best possible
desired results.

Target Market
- is a fairly homogeneous group of
people or organization to whom a company wishes to
appeal. Target Market Planning or T-planning enables
the marketing and product development group to
focus on a target for both product and communication
effort.