Mod -2 Market Segmentation, Consumer behavioir and marketing mix

Market segmentation

Market segmentation is the process of grouping customers into number of different divisions on the
basis of similar characteristics.

The marketers doesnot create the segment. Marketor has to identify the segments and decides which
one is the target.
The company can create a more fine tuned product or service offering and price it appropriately for the
target segment.

Benefits of market segmentation

To understand the customers.

To provide customer satisfaction.

To increase profit.
To formulate marketing programe.
To develop new product.
To expand market & market share.
Criteria for effective segmentation

Measurable,Substantial,Accessible,Differentiable,Actionable

Measurable

Based on size, purchasing power and characteristics of the segment

Substantial

Knowing whether the segment is larger and profitable enough to serve the customers

Accessible

segments can be effectively reached and served

Differentiable

segments can be clearly defined to avoid doubt about which part of the market, the firm's marketing
activities are aimed at.

Actionable

proper actions must be formulated for serving the segment

Base of segmentation
Geographic segmentation : market is subdivided on the basis of area
Demographic segmentation: basis of demography (age, gender, income..)

Psychographic segmentation: based on psychological characteristics including personality, lifestyle,

social status..

Behavioural segmentation: based on behaviour towards, a particular product.( user status, usage rate,
loyalty status ..)

Segmentation of international market

Classification on the basis of stages on demand

Classification based on stages of devolopment

Classification on the basis of stages on demand

Existing market

In the existing markets, consumer needs are known and are already being serviced by some products.
The market opportunities can be assessed by estimating the consumption rate and the share of imports
in current consumption.

Latent market

Latent markets have potential customers, but because no one has offered a product to fill the latent
need. There is no existing market.

Incipient market
Incipient markets do not exist in the present.
Future needs and preferences for products and services that will create a latent market, which if
supplied will become an existing market.

classification based on stages of devolopment

Industrially Developed Economies:

Industrially developed countries provide a large market as they have no or little import restrictions.
These countries lay more emphasis on the production of more sophisticated products and therefore
insist more and more on research and development.

More Developed Developing Countries:

This category would include countries like Brazil, Mexico, Hong Kong, India, etc.
They would like to update technology for current range of manufactures and would like to import
machinery and equipment to set up new manufacturing facilities.
They are also interested in setting up joint ventures in other less developed countries.
Raw Material Exporting Economies:
This category includes countries like those in the Gulf area,, Africa and Latin America.
They are generally faced with large changes in foreign exchange earnings because of fluctuations in their
export prices. For example, Gulf countries were having a good time because of the increase in oil prices.

Subsistence Economies:
This type of economy is found in the least developed countries. They almost produce nothing and
depend very much on the imports. They need:
a) Equipment to exploit their untapped resources
b) Infrastructural facilities like railways, roads, building.
c)Turnkey projects like housing, schools, hospitals etc.