SEGMENTATION &

STRATEGIC TARGETING
Presented by Aisha Sethi
Why is market
segmentation necessary?

Market segmentation can help you

to define and better understand
your target audiences and ideal
customers. If you're a marketer, this
allows you to identify the right
market for your products and then
target your marketing more
effectively.

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SEGMENTATION

 The process of dividing a potential market into distinct

subsets of consumers and selecting one or more segments as
a target market to be reached with a distinct marketing mix

 Segmenting, targeting, and positioning

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SEGMENTING
Dividing a company’s consumer market
into groups of potential customers with
similar needs and behaviors
 The customer segmentation of nestle
is based on age, gender, income ,
education. Nestle never offers same
product for different age groups. For
example, it offers milo for children
and coffee for adults
The selection of potential customers to
whom a business wishes to sell products or
services
 They want to put babies and children
healthy and ensure their sufficient
nutrition. That's why main and large
range of their products are baby milk
food products
POSITIONING
Market positioning refers to the process of
establishing the image or identity of a brand
or product so that consumers perceive it in a
certain way
 Nestlé earned a strong market
position because of its very good
knowledge of consumer requirement.
Nestlé specializes in producing baby
foods.
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 Identifiable To divide the market into separate
segmentation on the bases of common or
shared needs or characteristics that are relevant
to product or service , a marketer must be able
to identifiable these characteristics.

CRITERIA FOR
EFFECTIVE
TARGETING Sizeable In order to be a viable market , a
segment must consist of enough consumers to
make the targeting it profitable

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 Stable The segment should be relatively
stable in term of lifestyle and consumption
patterns and avoid segmentation that is
unpredictable

CRITERIA FOR
EFFECTIVE
TARGETING Accessible to be target a segmentation must be
accessible, which means that marketer must be
able to reach that market segment in an
economical ways

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BASES FOR SEGMENTATION

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CONSUMER ROOTED SEGMENTATION

This includes two types of personal attributes:

1. Facts: that are evidence based and can be readily determined and categories
along an objective criterion
2. Cognition: which can mostly be determined through indirect, psychological
test and classified into subjective categories, depending on the researcher

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 Demographic segmentation is the most popular
segmentation method because consumer needs, wants,
and usage often vary closely with demographic
variables and are easier to measure than other types of
variables
 Age
 Family Life Cycle
 Gender
DEMOGRAPHIC  Marital Status
SEGMENTATION  Income
 Education
 Occupation
 Social Class

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Age
It focuses on the age range most valuable to your product or service, it can be done in terms of life cycle stages or generations.
For example: clothing companies divide their customers according to age. Each age group has different specifications,
production, and marketing processes.
Gender
It is a factual distinguishing segmentation variable, and many products and services are inherently designed for either males
or females. For example: Many ads reflect the expanded child-nurturing roles of young fathers today
Martial status
the family has been the focus of most marketing efforts but now marketers have also discovered the benefits of targeting
specific marital status groupings, such as singles, divorced individuals, single parents, and dual income married couples.
Family life cycle
It is used for targeting and positioning consumers since it is mainly concerned with the different phases and generations that a
typical family passes through.
GEO-GRAPHIC SEGMENTATION

The division of a total potential market into smaller subgroups based on geographic
variables (e.g., region, state, or city). Geographic Segmentation explanation

• Region: Punjab, Sindh, KPK, Baluchistan etc.

• City Size: Major cities, small cities, towns
• Density of area: Urban, suburban, exurban, rural
• Climate: Temperate, hot, humid, rainy

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 Segment the market on a person's personality traits . A
person may have flowing personality traits Risk averse ,
open minded or information seeker

• Risk Averse: Those who averse the risk and don’t try
new and new products
PERSONALITY • Open Minded: Those who perceive less risk and try
TRAITS new and new products
• Information seeker: Those who seeks information
about product or service before buying those
products or servicers

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LIFESTYLES
• People’s decisions about how to live their daily lives, including family, job,
social, and consumer activities
• Also known as psychographics which consist of activities, interests, and
opinions(AIOs)
• Psychographics explain buyers purchase decision and the choices they make
within the buying options available to them

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VALS
(VALUES AND
LIFESTYLES)
VALS is a system for grouping consumers
according to psychological and sociological
theories in order to predict their behavior in
the purchase decision process
Three primary motivations:
 Ideal motivated
 Achievement motivated
 Self-expression motivated

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Innovators are successful, sophisticated, take-charge people with high
self-esteem. Because they have such abundant resources, they exhibit all
three primary motivations in varying degrees. They are change leaders
and are the most receptive to new ideas and technologies.

Thinkers are motivated by ideals. They are mature, satisfied, comfortable ,

and reflective people who value order, knowledge, and responsibility. They
tend to be well educated and actively seek out information in the decision-
making process.

Believers are conservative, conventional people with concrete beliefs

based on traditional, established codes: family, religion, community, and
the nation. Many Believers express moral codes that are deeply rooted and
literally interpreted.

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ACHIEVERS
 Achievers have goal-oriented
lifestyles and a deep
commitment to career and
family. Their social lives
reflect this focus and are
structured around family, their
place of worship, and work
STRIVERS
 Strivers are trendy and fun
loving. They are concerned about
the opinions and approval of
others. They favor stylish
products that emulate the
purchases of people with greater
material wealth.
EXPERIANCERS
 Experiencers are motivated
by self-expression. As young,
enthusiastic, and impulsive
consumers, Experiencers
quickly become enthusiastic
about new possibilities but are
equally quick to cool.
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MAKERS
 Makers Like Experiencers
 Makers are motivated by self-
expression
 They express themselves and
experience the world by working on
it-building a house, raising children,
fixing a car, or canning vegetables-
and have enough skill and energy to
carry out their projects successfully
SURVIVORS
 Survivors live narrowly focused lives.
 With few resources with which to
cope, they often believe that the world
is changing too quickly
 They are comfortable with the familiar
and are primarily concerned with
safety and security
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SOCIOCULTURE VALUES AND BELIEVES

• Culture, religion, race, region, language, education

and economic class is part of socio-cultural factors
which influence consumers needs and markets are
segmented on these basis
• Culture and sub-culture

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CONSUMPTION-SPECIFIC SEGMENTATION

consumption –specific cognitions Usage behaviours

 Benefit segmentation Usage rate

 Brand loyalty and relationship  Usage situation
 Usage Rate Segmentation stems from differences
among heavy, medium and light users, and nonusers of
a specific product, service, or brand.

 An example can be a company which is selling

home appliances. Such a company can sell its fans
during the summers, water purifiers during rainy
seasons and finally geysers during winters. Thus, the
USAGE RATE usage patterns of each product will be different, and
with the help of usage-based segmentation, different
SEGMENTATION customers can be targeted at different times

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USAGE SITUATION
SEGMENTATION

“Segmentation based on occasion or situation”

 Occasions (e.g., mother’s day )

 Time (e.g., weekday or weekend)
 Person (e.g., sister, wife etc.)

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 “Segmentation based on benefits that
consumers seek from products and
services is called benefit
segmentation’’

There are six brand benefits:

BENEFIT  Functional benefit
SEGMENTATION  Value for the money
 Social benefit
 Positive emotional benefit
 Negative emotional benefit
 Media benefits
BRAND EXPERIENCE AS A SEGMENTATION BASE

SENSORY RECEPTORS EXPERIENTIAL MARKETING

How consumers perceive a The sensory note based on the

brand through their sensory experience one have had regarding
receptors the brand

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BRAND LOYALTY AND RELATIONSHIP

BRAND LOYALTY RELATIONSHIP

Has two components:

Strong relationship requires:
 behavior – the frequency and
 Special treatment
consistency of buying a given brand  Confidence benefits
 attitude – the consumer’s feeling of  Social benefits
commitment to the brand.
WHAT IS TARGETING?

Targeting in marketing involves breaking the target

audience into segments and then designing
marketing activities that will reach the segments
most likely to be responsive to your efforts

Target marketing can greatly increase the success you

have in reaching potential customers

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TYPES OF TARGETING

BEHAVIORAL TARGETING MICRO-TARGETING

Behavioral targeting is the practice of segmenting Micro targeting is aggregating individual consumers
customers based on web browsing behavior, including into relatively small groups, based on:
things like:
• Data available about them from many different
• Pages visited
databases
• Searches performed
• Targeting them with tailor-made messages
• Links clicked
• Products purchased

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 Undifferentiated ( Mass) marketing
A market-coverage strategy in which a firm
decides to ignore market segment differences
and go after the whole market with one offer

TARGETING
STRATEGIES Differentiated ( Segmented ) marketing
A market-coverage strategy in which a firm
decides to target several market segments and
designs separate offers for each.

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 Concentrated (niche) marketing
A market-coverage strategy in which a firm
goes after a large share of one or a few
segments or niches

TARGETING
STRATEGIES Counter-segmentation strategy
When two or more segments are combined and
targeted with a redesigned marketing mix

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