MARKET SEGMENTATION

By: Naveen Kumar
PGFB0925

In order to capture this heterogeneous market for any product. Market segments should be formed in that way that difference between buyers within each segment is as small as possible. These common characteristics allow developing a standardized . Thus we can say that market segmentation is the segmentation of markets into homogenous groups of customers. A µmarket¶ after all is the aggregate of consumers of a given product. Thus. And. There are different factors contributing for varying mind set of consumers. each of them reacting differently to promotion. are of varying characteristics and buying behavior. preferences. every buyer has individual needs. marketers group customers to market segments by variables they have in common. consumer (the end user). The importance of market segmentation results from the fact that the buyers of a product or a service are no homogenous group. who makes a market. Actually.INTRODUCTION The market for any product is normally made up of several segments. It is thus natural that many differing segments occur within a market. communication. resources and behaviors. pricing and other variables of the marketing mix. marketers usually divide or disintegrate the market into a number of sub-markets/segments and the process is known as market segmentation market segmentation. every segment can be addressed with an individually targeted marketing mix. Since it is virtually impossible to cater for every customer¶s individual characteristics.

Through segmentation. . This is precisely why some marketing gurus/experts have described segmentation as a strategy of dividing the markets for conquering them. Buyers vary according to how they use the products. Companies are responding to the opportunities to provide unique customer value with products. Understanding how buyer needs and wants vary is essential in designing effective marketing strategies. Segmenting markets is the foundation for superior performance. The need to improve an organization¶s understanding of buyers is escalating because of buyers demand for uniqueness and an array of technology available to generate products to satisfy the demands. how they change better and faster than competitors is an increasingly important source of competitive advantage. These differences create market segments. and their consumption patterns. the marketer can look at the differences among the customer groups and decide on appropriate strategies/offers for each group. the needs and preferences that the products satisfy.marketing mix for all customers in this segment. Market segmentation is the process of identifying and analyzing subgroups of buyers in a product market with similar response characteristics. Segmenting markets may be critical to developing to developing and implementing market driven strategy. Recognizing differences between market segments.

An organization that anticipates astronomical generated revenue must attempt to segment their markets if they want to succeed in maintaining a competitive advantage. . ATTRIBUTES OF EFFECTIVE SEGMENTATION Market segmentation is resorted to for achieving certain practical purpose.The differentiating attributes of the segments must be measurable so that they can be identified. the telecommunications industry has developed cellular phones that align with the trends of online social networking. Facebook and various other networking sites. the new Kin phone. For example. In today's generation with Twitter. the segments arrived at must meet certain criteria such:a. Identifiable . increased profitability and sustainable customer relationships. For this to happen. Market segmentation is pivotal in global expansion. (i. for example.IMPORATNCE OF MARKET SEGMENTATION Market segmentation is very important because it allows organizations to identify the needs of the consumers and to identify what its products or services are in high demand.e. thus creating a stronger brand for the consumer. it has to be useful in developing and implementing effective and practical marketing programs. organization decided to hone in on new opportunities associated with international marketability.).

The potential of the segments as well as the effect of a specific marketing mix on them should be measurable.b.The segments must be reachable through communication and distribution channels. h. c.To justify separate offerings. g. Durable . f. Measurable . Profitable . e. d. .The segments should be relatively stable to minimize the cost of frequent changes. Compatible .Segments must be compatible with firm¶s resources and capabilities. Unique needs . A very small segment may not serve commercial exploitation. Sizeable . Accessible .The segments should be sufficiently large to justify the resources required to target them.There is no use in locating segments that are sizeable but not profitable. the segments must respond differently to the different marketing mixes.

These variables are: y y y y Geographic variables Demographic variables Psychographic variables Behavioral variables Geographic Segmentation In geographical segmentation. neighborhood) Population Density (Urban. rural) City size (Size of area. suburban. alone and in combination. population size and growth rate) Climate (Regions having similar climate pattern) A company. market is divided into different geographical units like: y y y y Regions (by country.Bases for Market Segmentation There are number of variables involved in consumer market segmentation. needs to put attention on variability . either serving a few or all geographic segments. nation. state.

After segmenting consumer market on geographic bases. advertising. Demographic Segmentation In demographic segmentation. promotion and sales efforts). companies localize their marketing efforts (product.of geographic needs and wants. market is divided into small segments based on demographic variables like: y y y y y y y y y y y y y Age Gender Income Occupation Education Social Class Generation Family size Family life cycle Home Ownership Religion Ethnic group/Race Nationality .

Psychographic Segmentation In Psychographic Segmentation. while defining marketing strategy. segments are defined on the basis of social class. Consumer needs. considering demographic factors. . So. wants. Psychographic variables include: y y y y y y y Interests Opinions Personality Self Image Activities Values Attitudes A segment having demographically grouped consumers may have different psychographic characteristics. usage rate these all depend upon demographic variables. is crucial.Demographic factors are most important factors for segmenting the customers groups. lifestyle and personality characteristics.

Behavioral Segmentation In this segmentation market is divided into segments based on consumer knowledge. New Year and Eid) User Status (First Time. Regular or Potential) Behavioral segmentation is considered most favorable segmentation tool as it uses those variables that are closely related to the product itself. Bases for Business Market Segmentation Business market can be segmented on the bases consumer market variables but because of many inherent differences like y y y Businesses are few but purchase in bulk Evaluate in depth Joint decisions are made . use or response to product. attitude. Behavioral variables include: y y y y y y Usage Rate Product benefits Brand Loyalty Price Consciousness Occasions (holidays like mother¶s day.

purchase policies and criteria. y Situational factors: seasonal trend. urgency: should serve companies needing quick order deliver. Nature of existing relationships. Order: focus on large orders or small. and international macroeconomic factors . Customer concentration. y Geographic: Regional industrial growth rate.Business market might be segmented on the bases of following variables: y Company Size: what company sizes should we serve? y Industry: Which industry to serve? y Purchasing approaches: Purchasing-function organization.

EXAMPLE OF MARKET SEGMENTATION .

Initially when the mechanical technology was the norm. On the other hand. his counter-part Aamir Khan was capturing the minds of the urban segments. Styling was not a factor initially with the Indian watch industry but Titan was there to make a difference and gave a fresh breath of life to the age-old rusty style of wristwatches. The constant innovation and effective market segmentation has been the great boon of the company.475-1200 for the basic consumers.Titan entered the Indian market of wristwatches in 1984. Its price range starts from Rs. Titan went against the tide and built-up its line with Quartz. at a time when HMT watches were enjoying a monopoly-situation. Today the company has a model for every price segment and every market. Titan is also capturing the rural market very efficiently. The venture took birth from the TATA group and today is India¶s market leader in wristwatches and the sixth-largest watchmaker in the world. It has also appointed Mahendra Singh Dhoni(himself belonging to Ranchi) as the brand ambassador of its Sonata collection to reach out to the rural population. .

It includes watches for both men and women. a trendy collection for the youth. Raga was for the sophisticated Indian woman. . The needs of women throughout the nation were changing and the brand was aimed to cater these very needs. This was a significant move as the women were now more liberal in the society and the corporate culture was establishing its roots in India. Sonata for the masses and the budget-conscious.It brought out the Aqua.

NEBULA(Available in 18k gold with leather straps embedded with 'Tanishq Certified Brilliant Cut Diamonds) and new RAGA DIVA were all aimed at the luxury watches segment.Fastrack for the cool and funky fetishes of the youth (girls and boys)while INSIGNIA. STEEL . Designed for men. the all new OCTANE celebrates masculinity and is the perfect blend of style and technology. Its sporty yet urban look is a perfect .

. Today. One can now see the ´World of Titanµ in almost every city and town of the India. OCTANE The unique designs and price variations enabled it to reach all classes and customers. the Titan group has its own retail shops throughout the country.accessory for the man of independent spirit who seeks to explore new horizons.

vibrant. Fast track. and cool outgoing young generation. For kids it has the Dash range. Sonata. It has special watches for men(Octave). b) GENDER :Titan divides its market based on gender also.women (Raga and Raga Diva). These watches are specifically for young. girls and boys. In most of the above mentions divisions it has watches for men and women.Bases of market segmentation Titan segments its market on following bases: a) AGE:Titan created a sub brand.for couples(Bandhan). c) INCOME :- . While for older person and professional it has created the steel series watches and also the famous.

e) PERSONALITY:Titan has a watch suiting every individual¶s personality. For the lower segment. From high class to middle class and lower class.Segmentation is done on the basis of income level of a person. with price ranges between Rs. Titan offered Exacta range in stainless steel. There were 100 models in the range. 20000 to Rs. c) OCCUPATION :Titan offers different watches to students (Fast Track) and office goers (Spectra and Exacta). For middle segment.Thus segmenting the market on occupational basis d) LIFESTYLE:Titan offers watch for people of different status. aimed at withstanding the rigors of daily life. The price range was between Rs. Titan offered Insignia and Nebula etc.350 to 500. .1 lakh.For luxury segment. Titan offered the Sonata range. Price ranges within Rs500-700.

we can conclude that Titan has brilliant market segmentation strategy which has covered almost the entire market that too very efficiently.f) OCCASION:This could be another segmentation strategy since Titan has a wide range of watches which could be used as a gift on special occasions. Conclusion Thus. It has definitely carved a world of its own ³THE WORLD OF TITAN´ .