Chapter 3, Lesson 2:

Consumer Market Segmentation

 Learning Objectives
• To understand the key premises
behind market segmentation
• To know how to define market
segments
• To be able to select viable target
markets
 The Premise behind
Market Segmentation
 Many optimistic entrepreneurs assume that if they
make their product good enough, it can attract
anybody and everybody—regardless of age,
gender, income, and a whole lot of other factors.
But this isn’t always the case.

 If you are planning to launch a product into an

already competitive industry, then focusing on a
specific market segment may prove to be more
effective than simply appealing to all tastes and
preferences.
 Variables in Traditional
Market Segmentation

• Demographic. This refers to quantifiable and

factual statistics of the population, such as age,
sex, income, and occupation.

• Psychographic. This refers to how consumers see

and feel about themselves—hence psycho or “of
the mind.”
 Variables in Traditional
Market Segmentation

• Behavioral. This refers to how we behave when

buying a product, whether these actions may be
conscious or unconscious in nature.

• Geographic. This refers to the physical location of

a market, including the general characteristics of
the location.
 Steps in Executing a
Systematic Segmentation

STEP 1: Conduct a wide survey.

STEP 2: Process the data.

STEP 3: Profiling.
 Benefit Segmentation

 A popular way of segmenting the market

 It tells how many fast-moving consumer goods are

segmented.

 In this segmentation, attention is focused on the

needs that people may have for a particular
product rather than the types of people who may
be targeted.
 Tips on Selecting Segment
to be Targeted
 Always consider a firm’s size and growth
objectives when selecting a market for it to target.
 Assess the structural attractiveness of the
potential market.
 Identify the firm’s objectives and resources.

 When planning for a long-term growth,

immediately assess the segment’s potential for
economies of scope.

 There is also the issue of segment-by-segment

invasion.
Can You Target Multiple Markets?

Yes, provided that the brand targets these discrete

markets with distinct strategies.