MARKET SEGMENTATION

Market
- a group of consumers who share similar needs and wants; backed by buying power
- Captured market — those consumers who have purchased the product
- Untapped market — the part of the total market who have not yet purchased the
product

Market Segmentation
- a marketing strategy that segregates a market into smaller groups of markets with
common needs and wants and then designing and implementing strategies to target one
or more or all of the smaller groups of markets.

Ways of Segmenting a Market

A. Geographic Segmentation
- Countries, nations, states, regions, and cities
- Rural, suburban, and urban
- Climate or total population
B. Demographic Segmentation
- Age, Gender, Family size, Education, Income, Family Life cycle stage
C. Psychographic Segmentation
- Social class, Values, Personality, Lifestyle
D. Behavioral segmentation
- User Status, Usage Rate, Benefits sought, Loyalty, Attitude

When identifying market segments, it is necessary to consider incorporating technology use

especially when segmenting the young market segments; their use of technology is evident in
social media.

Market Segments
- When you do market segmentation, the result is a market composed of smaller groups of
consumers that are called market segments.

Characteristics of a Good Market Segment (Perreault, 2011)

A. Homogeneous within a Market Segment
- A homogenous market is a group of people exhibiting similar consumption
patterns or behavior
- referred to as the target segment
B. Heterogeneous from the Other Market Segments
- A heterogeneous market exhibits distinction among other market segments in
terms of consumption patterns or behavior.
- In a heterogeneous market, several market segments can be identified
C. Substantial or Profitable Market Segment
- A substantial market indicates sufficiency to justify the resources required to
target them.
 - Substantial or profitable in this case means that the bigger the size the more
substantial it is.

Measurable or operational characteristics

- defined as relevant segmentation variables that must be identifiable and accessible
- For the relevant segmentation variable to be identifiable, it should clearly distinguish one
market segment from another market segment.

PROFILING
- designed as describing the identified market segments using relevant segmentation
variables.
Steps in Profiling
1. Describe the identified market segments using relevant segmentation variables.
2. Give a name for the different market segments.
3. Describe the market size of the market segments.
● This step is needed so that the marketer can identify which one has the biggest
market size and which ones' needs can be satisfied by the business.

Consider your target market segments profile and your target audience profile. Your target
audience is the one who will be exposed to your communication strategy. They can influence
the behavior of your target market.

Profiling Models
A. Roberto's Segment by Priority Consumer Values
- His model suggests that consumer values do not refer exclusively to products.
There is consumer value for products. pricing, advertising for promotion, and for
retail outlet placements.
B. 1SEC for Filipino Households (Socio- economic Classification of Filipino Households)
- This model includes nine socio-economic clusters based on the expenditure
pattern of the household taken from 2009 Family Income and Expenditure Survey
(FIES).
- These clusters considered quality of consumers, number of selected
energy-saving facilities owned, urban and regional membership, transport type
ownership, water source type, connectivity, living space assets, living shell, and
tenure of home.
C. Myers-Briggs Type Indicator (MBTI)
- This model measures psychological preferences in how people perceive the
world and make decisions.
D. Usage Status
- This model considers five usage status segments:
1. nonuser segment
2. the lapsed user segment
3. the potential user segment
 4. the first- time user segment
5. the regular user segment

TARGETING
- Choose which among the market segments you will target
- Select your target market segment/s taking into consideration your resources, competition,
and your consumer. This is important because all marketing strategies are directed to your
target market segment/s. Identifying the target market provides a focus to the marketing
plan.

Targeting Strategies
1. Undifferentiated Marketing
- business considers the entire market as the target market. The company does
not go through segmentation, profiling, and targeting. They adopt one marketing
strategy.
2. Differentiated marketing
- businesses consider the different segments in the market. They do segmentation,
profiling, and targeting. They develop products with separate marketing mix
strategies for each of the segment that they choose to target. Matinee ticket of a
show Premier ticket of a show Regular ticket of a show
3. concentrated marketing strategy,
- business develops products for one segment of the market. For example,
Company X builds customized cars for the elite segment only. Customized car
Elite segment

POSITIONING
- After targeting, decide how you will position your product in the minds of your target market
as compared with the other products in the market.
- owning a distinctive characteristic for your product in a product category
- To demonstrate product positioning: Let us say, you are asked to name a toothpaste brand
that will help in cavity protection. As soon as you were asked, you already identified brand X.
This means brand X's positioning is for cavity protection.

Perceptual mapping
- a technique used to visually display the mental image that the target market has on a
product relative to its competitors. This requires that two important attributes of the product
be identified.