Professional Documents
Culture Documents
Year 2 – Unit I
3. Market Segmentation
¾ Market Segment
¾ Levels of Market Segmentation
¾ Market Segmentation Variables
¾ Requirement for Effective Segmentation
¾ Evaluating Market Segments
¾ Geographic ¾ Psychographic
• Dividing a market into • Dividing a market into
different geographical units, different groups based on
such as national, regional, social class, lifestyle, or
local, city size, density of personality characteristics
population, and climate
¾ Demographic ¾ Behavioural
• Dividing the market into • Dividing a market into
groups based on groups based on purchase
demographic variables such occasion, benefits sought,
as age, sex, family size/ life user status, usage rate,
cycle, income, occupation, loyalty status, readiness
education, religion, and state, and attitude towards
ethnic origin the product
¾ Measurability
¾ Accessibility
¾ Substantiality
¾ Actionability
¾ Geographic Segmentation
• Dividing an overall market into homogeneous groups
on the basis of their locations
• Does not ensure that all consumers in a location will
make the same buying decision
• Help in identifying some general patterns
One
Mass
Marketing Rs.
Market
Mix
(one product) (everyone)
(one demand) Q
curve
Advantages Disadvantages
Cost Economies Hyper competition
Majority - Fallacy
Imprecise - Inefficient
Rs. Rs.
Q Q
for B. Sc. Degree in
As a Technical Collaborator of
Catering Science & Hospitality Management
Concentrated Strategy
… Choose & focus on one segment… E.g., Mercedes, VW
Advantages Disadvantages
Marketing Mix 1 Q
Segment 1 demand curve 1
(Product 1)
Marketing Mix 2 Rs
Segment 2 Q
(Product 2)
demand curve 2
Marketing Mix 3
Segment 3 Rs
(Product 3) Q
demand curve 3
for B. Sc. Degree in
As a Technical Collaborator of
Catering Science & Hospitality Management
Differentiated Strategy
Potential Advantages:
- Precision - Efficiency Sales Increase
Potential Disadvantages:
- Cost Diseconomies
Potential Social Issue:
- Product Proliferation
¾ One-to-one marketing
¾ Uses data based-marketing
and information technology FOR REPEAT HOTEL GUESTS
¾ For example... GATEWAY, •Your name
DELL •Room preferences
•Special requests
•Smoking or non smoking
•Credit card number
•Frequent hotel user discount
for B. Sc. Degree in
As a Technical Collaborator of
Catering Science & Hospitality Management
Retrenching - Another Approach to
Segmentation
¾ Counter segmentation:
Consolidate several
segments and launch or
reposition a product to
cover all segments.
• E.g., Nissan and Toyota