Professional Documents
Culture Documents
SESSION 10
SEGMENTATION
Study of consumer markets indicates there are different consumer need different products. Market
segmentation helps companies divide large, heterogeneous markets into smaller segments based on
similar needs. The objective is to reach them more efficiently and effectively with products and
services that match their unique needs. Two broad groups of variables to segment consumer markets:
Geographic Segmentation
For some products, the consumers’ needs are different across geographic boundaries. For example,
different countries, regions, states, counties, cities, or even neighbourhoods have different needs. In
93
Principles of Marketing | Richa Saxena
India, woollens are sold more in northern region, PCs and
laptops are sold in urban markets whereas fertilizers and
seeds are sold in rural markets.
• consumption pattern
• taste and preferences
• climatic conditions
• infrastructure and power support
Demographic Segmentation
Demographic segmentation divides the market into groups
based on variables such as age, gender, family size, family life
cycle, income, occupation, education, religion, generation, and
nationality.
Titan has different range of watches for different income groups; Timex for price sensitive markets
and Raga and Nebula for luxury markets. Tours and travel companies also design several range of
packages (standard, deluxe and premium) to suit different income groups.
Psychographic Segmentation
Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or
personality characteristics.
One of the most popular commercially available classification systems is SRI Consulting Business
Intelligence’s VALS framework.
95
Principles of Marketing | Richa Saxena
The Value and Life Style framework (VALS) categories consumers into two broad categories: people
with high resources and people with low resources. There are three motivational functions across
these resources; ideals, achievers and self-expression. The major tendencies of the four groups with
high resources are: innovators, thinkers, achievers and experiencers. The major tendencies of the four
groups with lower resources are: believers, strivers, makers and survivors (Srategic Business
Insights, 2019).
Marketers also use personality variables like innovativeness, need for cognition and need for
uniqueness to segment markets.
Behavioural Segmentation
Behavioural segmentation divides buyers into groups based on their knowledge, attitudes, uses, or
responses to a product.
buyers according to occasions when they get the idea to buy, actually make their purchase, or
use the purchased item. Many companies give festival offers as many purchases are done
during that time.
Q10.1 According to you what will be the appropriate basis for segmentation for
(a) Mobile Phones
(b) Soups
(c) Designer Sunglasses
(d) Coffee
(e) A toothpaste
(f) A daily moisturiser
Q10.2 Select a product and brand that you use frequently and list the benefits you
receive from using it. Without disclosing your list, ask a fellow student who uses a
different brand in this product category to make a similar list for his or her brand.
Compare the two lists and identify the implications for using benefit segmentation
to market the two brands.
Measurable: The size, purchasing power, and characteristics of the segments can be measured
Substantial: The segments are large and profitable enough to serve. A segment should be the
largest possible homogeneous group worth going after with a tailored marketing program.
Differentiable: The segments are conceptually distinguishable and respond differently to different
marketing-mix elements and programs.
Actionable: Effective programs can be formulated for attracting and serving the segments (Kotler,
2017, pp. 284-285)
Q10.3. Identify the bases for segmentation in the following examples. Justify your
answer.
(a) Consumer electronics maker Micromax announced its foray into the air cooler
category with products priced between Rs 5,990-16,990. Micromax will have a
full-fledged range of room air coolers including personal, tower, desert and
window. The company entered the consumer electronics category in 2012 with
the launch of LED televisions and is also present in the AC segment.
(b) Eveready Industries India (EIIL) has entered the Rs 9,000 crore plus
confectionery market through its brand 'Jollies'. According to a release issued
by the company, Jollies will be launched in the Rs 400 crore fruit chew segment
during the first phase. It will be priced at Re 1. Eveready will look to leverage
its deep distribution network across urban and rural India even as it follows an
asset light model and aims at quick profitability with entry into this segment.
(ET, 2018)
(c) Prestige Clean Home, a subsidiary of TTK Prestige, India’s largest kitchen
appliances brand, announced the launch of India’s first domestic electric mop
97
Principles of Marketing | Richa Saxena
and a new range of water purifiers. The electric mop, a completely new concept,
designed with Indian needs in particular, was conceptualized by Mr TT
Jagannathan, Chairman of TTK Group. (Watch: Prestige Launches electric
MOP, 2017).
References
Bhatt, Shephali@ET Tech. (2019, November). Single people in their 50s open up to the idea of using
dating apps. Retrieved from ET Tech:
https://tech.economictimes.indiatimes.com/news/internet/single-people-in-their-50s-open-up-
to-the-idea-of-using-dating-apps/72212354
Malviya, S. (2018). No fear of failure: Marico again sights health & wellness. Retrieved from
Economic Times: https://economictimes.indiatimes.com/industry/cons-products/no-fear-of-
failure-marico-again-sights-health-wellness/articleshow/67223668.cms
PTI@Financial Express. (2017). Delhi most ‘internet-ready’ state in India: Study. Retrieved from
https://www.financialexpress.com/india-news/delhi-most-internet-ready-state-in-india-
study/635519/
Roll, M. (2019). The Secret of Zara’s Success: A Culture of Customer Co-creation. Retrieved from
Martin Roll: https://martinroll.com/resources/articles/strategy/the-secret-of-zaras-success-a-
culture-of-customer-co-creation/
Srategic Business Insights. (2019). US Framework and VALS™ Types. Retrieved from SBI:
http://www.strategicbusinessinsights.com/vals/ustypes.shtml
Across Down
2. According to the VALS segmentation 1. When Amy goes shopping for clothes, she
framework, consumers primarily motivated by goes into every store in the mall looking for the
ideals are guided by ________. best deal. She is very price conscious. On the
basis of loyalty status, Amy can be described as
a(n) ________.
99
Principles of Marketing | Richa Saxena
segmentation system, Kim is best described as a(n) reach target markets, the manager is most
________. likely appealing to the ________ market.
11. Mothers-to-be are potential users who will turn 6. According to the VALS segmentation system,
into heavy users of infant products and services. ________ are successful, sophisticated, active,
By targeting mothers-to-be as future heavy users, "take-charge" people with high self-esteem.
producers of these products and services are Their purchases often reflect cultivated tastes
segmenting consumers on the basis of ________ for relatively upscale, niche-oriented products
status. and services.
12. When Nike attempts to get close to its 7. Newlyweds in the United States buy more in
customers at the local level by sponsoring local the first six months than an established
school teams and providing shoes, equipment, and household does in five years. Newlyweds are an
clothing to many of them, Nike is using example of a(n) ________ segment.
______________segmentation.
13. The horizontal dimension in the VALS 9. Pampers divides its market demographically
framework is consumer ________. on the basis of ________ into prenatal, new
baby, baby, toddler, and pre-schooler.
15. The sale of turkeys in the United States is 10. If a buyer is loyal to two or three different
highest in mid- to late November, as people buy brands of soap, this buyer's loyalty status can
turkeys to serve at Thanksgiving. Grocery stores be described as being among the
that specifically advertise turkeys at this time of ________loyals.
year are segmenting on the basis of ________.
17. A hardware store is interested in reaching 14. According to the VALS segmentation
people who are characterized by the VALS system system, ________ are conservative,
as being practical, down-to-earth, and self- conventional, and traditional people with
sufficient, who like to work with their hands, or the concrete beliefs. They prefer familiar, products
________ category. and are loyal to established brands.
19. Dennis requests his father to buy him a 16. According to the VALS segmentation
PlayStation® for his birthday. With respect to system, ________ are successful, goal-oriented
consumer decision roles, which role is Dennis people who focus on career and family. They
currently playing? favour premium products that demonstrate
success to their peers.
20. Linda was buying all her groceries from Home 18. According to the VALS segmentation
Needs supermarket for the past 5 years. She system, ________ are considered to be trendy
recently came across The Convenience Store, and fun-loving people who are resource-
another supermarket just a few miles away from constrained. They favour stylish products that
her place and started buying her groceries from emulate the purchases of those with greater
them. Linda can be best described as a(n) material wealth.
________loyal.
100
Principles of Marketing | Richa Saxena
allow his users to soar from 0-60 mph in about 4
seconds. He also adds in that the price of the car
must be affordable enough for anybody making a
good salary. In accordance with the given scenario,
Robert is trying to segment the market on the basis
of ________.
2 3
4
5 6
7
8
9 10 11
12
13
14 15 16
17 18
19
20
21
22
23
101
Principles of Marketing | Richa Saxena
1. Apple, Samsung, LG
2. HUL, P&G, ITC
3. Reliance Jio, Vodafone, Airtel
4. Maruti, Mahindra & Mahindra, Tata Motors
Date of Submission_____________________
102