CONCEPT OF SEGMENTATION
when they hear ‘market segmentation’. This is perhaps the most
 Consumer markets are typically large and heterogeneous
in nature in which consumers are quite different from one
another. Even though no two consumers are exactly
similar to each other, there may be some commonality
between them. Such commonality parameter can be used
to divide the market into relatively homogeneous groups.
This is the essence of segmentation. Once such groups are
made, it is easier to put concentrated effort on specific
groups. This is popularly called targeting in marketing
terminology.
MARKET SEGMENTATION
 Market segmentation is an increasingly important part of
a strong marketing strategy and can make all the
difference for companies in competitive market
landscapes, such as ecommerce. When up against a range
of online competitors, effective communication is the best
way to differentiate your business.
 Market segmentation offers an opportunity to pinpoint
exactly what messaging will drive your customers to
make a purchase
WHAT IS SEGMENTATION?
 Segmentation is the process of dividing the market into
various homogeneous groups based on some common
parameters.
EXAMPLES OF SEGMENTATION
 Consumer might have observed that companies offer
different varieties of shampoos aimed at different
segments. For example, there are shampoos for different
hair related issues (viz. dandruff, split hair, hair loss etc.)
 Car manufacturing companies offer cars for potential
customers with different income level. They generally
offer 'Hatchback' for lower-middle class and 'Sedan' for
upper class and upper-middle class.
 Such segmentation even in the service sector. You might
have observed the different kinds of hotel rooms available
for customers such as 'Deluxe', 'Luxury', 'Premier', etc.
 Utility of segmentation is based on the fact that customers
do vary. It is possible to group or classify them based on
significant characteristics. This can also develop
differentiated product offers for each segment, than try to
sell one product to everybody in the market
BENEFITS OF SEGMENTATION
Segmentation not only helps in identification of customers with
substantial similarity but also helps in profiling them and their need
structure. Some of the major benefits of segmentation are:
 Segmentation helps to distinguish one customer group
from another within a given market.
 It facilitates proper choice of target market.
 When there exists a clear distinction between segments,
the marketing manager can use the resources in an
efficient manner by spending optimally on high potential
and most profitable segments.
 It provides useful insights into the value sought by each
segment.
 It helps in a better understanding of the competitive
situation in each of the segments.
 It helps spot the less satisfied segments and concentrate
on them as unique opportunities.
BASES MARKET SEGMENTATION
1. Demographic segmentation: The who
Demographic segmentation might be the first thing people think of
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
BASES OF MARKET SEGMENTATION
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
 Segmentation based on the internal self of consumers is
known as psychographic segmentation
 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.
BASES OF MARKET SEGMENTATION
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
 For example, it is possible to group customers within a set
radius of a certain location – an excellent option for
marketers of live events looking to reach local audiences.
Being aware of your customers’ location allows for all
sorts of considerations when advertising to consumers. In
large nations like the United States, customers could be
presented with options that match with local weather
patterns. Geographical identification is an important part
of seasonal segmentation, which allows businesses to
market season-appropriate products to customers.
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 they group customers with regards to their:
 Spending habits • Browsing habits • Interactions with the
brand • Loyalty to brand • Previous product ratings
  Behavioral segmentation divides a population based on
their behavior, with respect to their purchase and usage of
the products.
TARGETING
Targeting, also known as multisegmented marketing, is a marketing
strategy that involves identifying specific personas or markets for
specific content. Companies use target marketing to learn more about
their consumers and thus create advertisements for specified groups
to maximize response.
Targeting means selecting one or more identified segments and
concentrating on those segments rather than the whole market.
TARGET STRATEGIES
1. Demographic Targeting. These targets are based on age,
gender, ethnicity, race, income, education, religion, economic
status and more, and are extremely commonly used in all types of
marketing. Using demographics is a tried and true marketing
technique, a foundation for target marketing. By combining
different segments, say age and gender, specific consumers can be
targeted for specific products in a myriad of ways, from ads to
product placement and more.
 Knowing demographics also helps push sales if a certain
product is not performing as well as wanted. If a product is
selling great in the 25 to 40 male demographic, but isn’t in the
25 to 40 female demographic, ads specifically targeted at those
women can be created to boost sales. Conversely, if a product
is for women aged 25 to 40, the ads will focus on just women
25 to 40. An example of this is birth control commercials,
which are often shown during shows popular with women in
that age range, so as to reach the target audience.
2. Geographic targeting. This targeting is based on a certain
location and can be as broad as a country or region, or as specific
as a city or neighborhood. Also known as geo-targeting or geo-
filtering, gathering geographic information (such as city, state, IP
address) and then targeting consumers within certain locations has
proven to be a very effective marketing strategy, as it results in
ads being sent to exactly the right people in the right place.
 An example of this would be sending ads out for a
local-to-the-consumer car dealership vs ads for the
brand in general. The general ad may entice interest,
but a local ad will have a greater chance of resulting in
a sale.
 Geographic targeting also uses the information on
where the consumer goes on a regular basis or has been
to in the past to create interest and habit profiles, which
can be very valuable in choosing what group the
consumer belongs in. On a more practical level,
knowing the consumer’s geographic location ensures
they are within the area of the product or service you
are offering.
3. Psychological and behavioral targeting.
 This targeting uses personality traits, previous
purchases, favorite places, shopping habits, “Likes” on
Facebook or Twitter, opinions, etc. Knowing the
consumer’s personality can greatly enhance the
efficacy of a marketing campaign.
 Are they introverted or extroverted?
 Are they an impulse buyer or someone who makes
thought out decisions?
 Think about how to best pitch a sale to them. Have
they already bought the product? Time to sell them that
product a second time or offer something related to it.
Using data gathered about the user’s psychological and
behavioral patterns using website cookies gives more
than a one-up in figuring out how to sell a product to
them, as you can also influence them and predict their
response better
TARGET STRATEGIES
1. Single Segment Concentration-focusing on one segment.
Example: Company decides to focus on adult ladies, that is, 25 to 35
age and cosmetics
2. Selective Specialization-which means the focus is on two or
three segments which are apparently not related with each other; or
you are looking.
Example:cosmetics, apparel, and shoes
3. Product Specialization
 One product satisfying all the different markets
 Catering to all the needs of one particular group, that is, the
ladies, that is, teens, adults, elders, and so on and so forth.
Example: Having cosmetics for all the categories( teens, adults
ladies and elderly ladies).
 Providing the cosmetic needs of all the categories of consumers
is about specialization by product.
4.Market Specialization
Here the company takes up a particular market segment for supplying
all relevant products to the target group.
 Looking up to the needs and wants of one total market in
different stages;
Example:
Target segment are the adult ladies at the elite class.
 The company can implement market specialization strategy by
producing or selling all luxury products like Gucci, Prada,
Pierre Cardin, Dolce & Gabbana—they have got lot of product
lines and they are all looking at the elite class, both male and
female.
5.Full Market Coverage
 The full market coverage could be different offers for each of
these different segments or it is the same offer for the total
market. Even though you are supplying cosmetics to each of
these different segments, like teens and adults and elder ladies,
but they are different. The cosmetics offering to the teen
 females is not the same cosmetics that you are offering to adult
ladies.

 probably the brands are different,

 probably the pricings are different,
 probably the packaging is different,
 probably the sizes are different, so on and so forth