Market segmentation

Market segmentation is the process of dividing a target market into smaller, more defined
categories. It segments customers and audiences into groups that share similar characteristics
such as demographics, interests, needs, or location

The 4 basic types of market segmentation are:

1. Demographic Segmentation
2.Psychographic Segmentation
3.Geographic Segmentation
4. Behavioral Segmentation

1. Demographic segmentation: The who

Demographic segmentation might be the first thing people think of when they hear ‘market
segmentation’. This is perhaps the most straightforward way of defining customer groups, but it
remains powerful. Demographic segmentation looks at identifiable non-character traits such as:

• Age
• Gender
• Ethnicity
• Income
• Level of education
• Religion
• Profession/role in a company

2. Psychographic segmentation: The why

Psychographic segmentation is focused on your customers’ personalities and interests. Here we

might look at customers and define them by their:

• Personality traits
• Hobbies
• Life goals
 • Values
• Beliefs
• Lifestyles

Compared to demographic segmentation, this can be a harder set to identify. Good research is vital
and, when done well, psychographic segmentation can allow for incredibly effective marketing
that consumers will feel speaks to them on a much more personal level.

3. Geographic segmentation: The where

By comparison, geographic segmentation is often one of the easiest to identify, grouping

customers with regards to their physical location. This can be defined in any number of ways:

• Country
• Region
• City
• Postal code

4. Behavioral segmentation: The how

Behavioral segmentation is possibly the most useful of all for e-commerce businesses. As with
psychographic segmentation, it requires a little data to be truly effective – but much of this can be
gathered via your website itself. Here we group customers with regards to their:

• Spending habits
• Purchasing habits
• Browsing habits
• Interactions with the brand
• Loyalty to brand
• Previous product ratings
Benefits of market segmentation
1. Create stronger marketing messages

When you know whom, you’re talking to, you can develop stronger marketing messages. You
can avoid generic, vague language that speaks to a broad audience. Instead, you can use direct
messaging that speaks to the needs, wants, and unique characteristics of your target audienc e.

2. Identify the most effective marketing tactics

With dozens of marketing tactics available, it can be difficult to know what will attract your
ideal audience. Using different types of market segmentation guides you toward the marketing
strategies that will work best. When you know the audience, you are targeting, you can
determine the best solutions and methods for reaching them.

3. Design hyper-targeted ads

On digital ad services, you can target audiences by their age, location, purchasing habits,
interests, and more. When you use market segmentation to define your audience, you know
these detailed characteristics and can use them to create more effective, targeted digital ad
campaigns.

4. Attract (and convert) quality leads

When your marketing messages are clear, direct, and targeted they attract the right people.
You draw in ideal prospects and are more likely to convert potential customers into buyers.

5. Differentiate your brand from competitors

Being more specific about your value propositions and messaging also allows you to stand
out from competitors. Instead of blending in with other brands, you can differentiate your
brand by focusing on specific customer needs and characteristics.
6. Build deeper customer affinity

When you know what your customers want and need, you can deliver and communicate
offerings that uniquely serve and resonate with them. This distinct value and messaging leads
to stronger bonds between brands and customers and creates lasting brand affinity.

7. Identify niche market opportunities

Niche marketing is the process of identifying segments of industries and verticals that have a
large audience that can be served in new ways. When you segment your target market, you
can find underserved niche markets that you can develop new products and services for.

8. Stay focused

Targeting in marketing keeps your messaging and marketing objectives on track. It helps you
identify new marketing opportunities and avoid distractions that will lead you away from your
target market.

Market segmentation of Samsung

Market segmentation is an activity to divide a large number of consumers into small groups or segments
which is based on different criteria (Weinstein, 2013). The segment includes those consumers who will
react similarly to strategies developed by marketers. The segmented consumers have similar tastes and
preferences. Segmentation means differentiating the consumers on the basis of Age, Gender, income and
lifestyle.

Types of segmentation

Geographic
This segmentation is based on geographical area. The target area will be decided by the company. Samsung
focuses on rural as well as urban population. Samsung has a variety of mobile phones for every type of
consumer. It is one of the leading manufacturers of the mobile phone in the world. Samsung has Samsung
Guru for the rural sector. The company has Galaxy smartphones for the urban sector such as touch enabled
smartphones.
Demographic
Samsung offers mobile phones for youth, professionals, and businessman. The company offers Guru Series
for Middle class and lower-class consumers (Simkin, 2016). The Samsung Galaxy Series is suitable for
high-class consumers. Galaxy series offers a large number of attractive features which include Wi-Fi and
3G technology. The mobile phones of Samsung are affordable and cheap that is why they are attracting a
large number of the consumer.

Age group- Samsung targets the customer between the age group of 22-55. Samsung designs and develop
their products according to the target customer base. Young professionals mostly prefer
Samsung mobile phones. The spending power of the young professionals is more as compared to other
consumers. The company innovates its products according to the demand of the consumers.

Gender- Both males and females are the target consumers of Samsung. The company offers fancy
smartphones for females (Kotler, 2012). For males it has smartphones with great space and battery
backup. The company also focuses on young women who are not much influenced with the price.

Occupation- Samsung targets students, employees and professionals. The company has Samsung galaxy
series for the businessman and professionals. This segment of the market includes large number of working
professionals.

Psychographic
Psychographic segmentation means dividing the target consumers on the basis of values, interest,
personality trait and lifestyle (Kotler, Burton, Deans, Brown & Armstrong, 2015). The
psychographic segmentation of Samsung includes individual, teens and adults who are techno
savvy. Samsung has a wide range of mobile phones which are fancy and attractive. The company
offers touch screen mobile phones with lower rates. Every consumer can afford the mobile phones
of Samsung because of its Price. Samsung galaxy series provide innovative features for high class
consumers who want to show their style statement. The approximate range of Samsung mobile
phones starts from 1200 to 50,000.
Target Customer
Market segmentation helps Samsung to identify the target market and target consumers. It defines
the total demand for the product in each economic feasible segment. The segmentation defines
total homogeneity and heterogeneity. The market segmentation provides many advantages to
Samsung in different ways:

1. Suitable target market

2. Focusing on potential consumers

3. Effective marketing efforts

4. Advantage to the consumers

1. Suitable target market

There are many segments in the market and each segment is different. All the consumers are not
homogenous. The buying behavior of all the consumers is different. Market segmentation helps
to define each segment. Segmentation provides a brief knowledge of market to the company. It
is easy for the company to distinguish each consumer on the basis of segmentation.

2. Focusing on potential consumer

Segmentation helps the company to understand the demand of potential consumers. By using
proper segmentation, the company will be able to design and develop its products according to
the need and demand of the target consumers. The response from homogenous consumers helps
to define each segment very clearly. The segmentation helps the marketer to develop appropriate
strategy for the consumers.
3. Effective marketing efforts

Companies try to fulfil the needs of each segment. The segmentation helps to design promotional
tools for each segment of the target market (Syapsan, 2019). Marketing efforts should be well
designed to promote the product of the company. Market segmentation helps the company to
identify the best time for the launch of new product and advertising etc.

4. Advantage to the consumer

Market segmentation provides benefits to the consumers. Segmentation helps the company to
understand the need of the potential consumers. The consumers will be found suitable products
according to their demand.

Demographic Psychographic

Geographic

Figure 1: Segmentation strategies followed by Samsung

Targeting
Targeting means selecting target customers from the target market. The marketer develops the
strategy for these consumers to sell the product and services of the company. The target consumers
of Samsung are based on different class and groups. Young people, business class, professionals
and organizations are the major target consumers of Samsung. Targeting is based on retaining the
target customers to maximize sales.

Positioning
Positioning is the strategy to influence the perception of the consumers towards a brand. Samsung
develops many positioning strategies to capture their target consumers. Samsung majorly focuses
on lower class and middle class as they gain most of their margin from these consumers. Samsung
developed a brand image in the mind of consumers. The company has also adopted the 3g
segments of mobile phones. Innovation and upgradations of mobile phones are the main concepts
of Samsung.

Strategies of Samsung to target the Segmented market

The marketing mix is a strategy that helps the marketer to promote its product and service in the
target market. Marketing mix was created by Jerome Mccarthy in 1960 (Steenkamp, 2019).
Samsung designs its products according to the demographic segments of the consumer. The
products of the company are suitable for urban as well as rural population. Samsung offers
premium smart phones for high class consumers. The company designs affordable smartphones
for rural sectors.

Samsung charges high price for its premium mobile phones. The range starts from 1500 to 50,000.
Samsung provides innovative products with high price. The company provides additional features
and value-added services to Consumers. The Company mainly targets rural and urban sector. The
market has many segments and it is important for the company to decide which market segment is
crucial for them. Samsung takes the help of market segmentation to develop the better
understanding of the target market. Rural and urban population mainly prefers the Samsung mobile
phones as they are affordable. Galaxy S6 and S6 edge are the new products that are targeting high
class sector of the population. Samsung always focuses on promoting its most important products.
Samsung promotes its product through innovative advertisement.
Positioning Statement

Samsung embodies style and technology for the young professional, with its cutting-edge design
and superior connectivity features. Samsung's positioning statement is one that asserts its
differentiation from other mobile phone providers. In the local market where myriad choices
abound, Samsung's sleek exterior design, accompanied by its selection of soft and hard features,
render it an optimal purchase for the young, technologically updated professional.

Samsung tries to cover whole mobile and smartphone market and is now one of the leading mobile
companies of the world. Today company’s product lineup includes almost any possible
smartphone or mobile. Thereby the current positioning of Samsung Mobile is to be a market leader
in whole mobile and smartphone market. Samsung came up with new ideas to be more customer-
focused and creative in order to establish a strong brand image in the global market. Their main
focus is to make handsets with the most amazing and unique designs in order to meet their
customers expectation.

Samsung has long counted on its marketing and hardware prowess to attract customers seeking an
alternative to Apple's iPhone. When Samsung needs to churn out a hit, it turns to what it's always
done best: hardware. Samsung has long been at the forefront of the mobile market when it comes
to the technology crammed into the devices. Its phones tend to use the fastest processors and
brightest screens, as well as incorporate novel, high-tech features seen in S21 Ultra.

Samsung prefers to use different taglines for their different products. This year Samsung launched
S21 Ultra with “Epic in every way” as the tag line.
 Figure 2: Tag line of S21 Ultra

There are critics of Samsung who argue that its success is mostly due to copying and then tweaking
the innovations of others like Apple, Mi, Huawei, etc. Even if it’s true Samsung is still leading
among the fierce competitors and some people say Samsung has managed to bring the heat over
iphone12 Pro Max (biggest rival).

Figure 3: Unique feature of S21 Ultra

Eventually They are holding the leading position of smart phone brand in the world. Where they
produce 394 million handset per year. Where there are a good amount of variation of model and
price which helps the all range of customer to afford their product. From 394 million handset they
sell approximately 321.2 million in every year which generate a revenue of amount 211.2 billion.
These statistics clearly prove that why they hold the leading position. And they have a brand rating
of 9.9 which is exceptionally better than any other company.

Figure 4: Position of Samsung smart phone in global ranking

Even also Samsung leads 5th among the top 10 innovative companies

Figure 5: position of Samsung in innovative companies