WHAT IS MARKET

SEGMENTATION?
• Market segmentation is the process of dividing a broad target market into smaller,
more manageable segments based on common characteristics.
• It helps businesses identify and understand distinct groups of customers, enabling
tailored marketing strategies and better customer engagement.
IMPORTANCE OF MARKET SEGMENTATION

 Enhances marketing efficiency: By focusing on specific customer segments,

companies can allocate resources more effectively and maximize their
marketing efforts.
 Improves customer satisfaction: Tailored marketing messages and
personalized offerings result in better customer experiences, leading to
higher satisfaction levels.
 Drives profitability: Understanding customer needs and preferences enables
companies to create and deliver products and services that resonate with
target segments, leading to increased sales and profitability.
TYPES OF MARKET SEGMENTATION

 Demographic segmentation: Dividing the market based on demographic

factors such as age, gender, income, education, occupation, and family
status.
 Psychographic segmentation: Segmenting based on lifestyle, attitudes,
interests, and values of customers.
 Behavioral segmentation: Dividing customers based on their purchasing
behavior, brand loyalty, usage patterns, and benefits sought.
 Geographic segmentation: Segmenting based on geographical factors such as
location, climate, and population density.
STEPS IN MARKET SEGMENTATION

 Identify your target market: Define the overall market you want to target with
your products or services.
 Collect data: Gather relevant data about your customers, such as demographics,
psychographics, behaviors, and geographic information.
 Analyze and segment: Analyze the collected data to identify meaningful segments
within your target market.
 Develop personas: Create detailed profiles of each segment, including their
characteristics, needs, and motivations.
 Tailor marketing strategies: Customize your marketing mix (product, price, place,
promotion) to effectively reach and engage each segment.
 Evaluate and refine: Continuously assess the effectiveness of your segmentation
strategy and make necessary adjustments based on feedback and market changes.
BENEFITS OF EFFECTIVE MARKET SEGMENTATION

 Improved customer targeting: By understanding the unique needs of each

segment, you can develop targeted marketing campaigns that resonate with
specific customer groups.
 Enhanced competitiveness: Segmentation helps you identify niche markets
and position your products or services accordingly, giving you a competitive
edge.
 Increased customer loyalty: Building strong relationships with segmented
groups can lead to higher customer loyalty and long-term profitability.
 Cost-effective resource allocation: By concentrating resources on high-
potential segments, you can optimize your marketing budget and achieve
better returns on investment.
 EXAMPLES OF SUCCESSFUL MARKET
SEGMENTATION
 Apple Inc.: Apple segments its customer base into different groups based on
their lifestyle, interests, and technological preferences. They offer tailored
products, such as iPhones, iPads, and MacBooks, to cater to each segment.
 Coca-Cola: Coca-Cola uses geographic segmentation to adapt its marketing
campaigns to local tastes and preferences worldwide. They create region-
specific promotions and product variations to appeal to diverse markets.
 Nike: Nike utilizes both demographic and psychographic segmentation. They
target different age groups, genders, and sports enthusiasts with customized
products and marketing messages, such as the Nike+ app for running
enthusiasts.