Market Segmentation

Raymund Sanchez

Content of the Lesson      Definition of segmentation Purpose of segmentation Types of segmentation Segmentation process Levels of segmentation .

Definition  A market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.  it is distinct from other segments (heterogeneity across segments)  it is homogeneous within the segment (exhibits common attributes)  it responds similarly to a market stimuli  it can be reached by a market intervention .

profiles of segments can be measured. • Segments must be large or profitable enough to serve. . • Must be able to attract and serve the segments.Measurable Accessible Substantial Differential Actionable • Size. • Segments must respond differently to different marketing mix elements & actions. purchasing power. • Segments must be effectively reached and served.

Purpose  Increase marketing efficiency by focusing marketing efforts to a particular group  Maximize scarce marketing resources  Find a market with limited competition  Select the most profitable segment .

coastal. Humid.  Density of Area Urban. . towns.  climate Hot. Cold. North. small cities. Rural. hilly. Central. etc.Segmentation Criteria  Geographic variables  region of the world or country.  country size/country size : Metropolitan Cities. South. West. Semi-urban. Rainy. East.

or responses . or personality Behavioral Occasions. regions or cities Demographic Age. or income Psychographic Social class.Segmentation Criteria Geographic Nations. states. lifestyle. benefits. uses. gender. family size and life cycle.

Demographic Criteria  Demographic variables              age gender sexual orientation family size family life cycle education income occupation education socioeconomic status religion nationality/race language .

Psychographic Criteria  Psychographic variables     personality life style value attitude .

Behavioral Criteria  Behavioral variables         benefit sought product usage rate brand loyalty product end use readiness-to-buy stage decision making unit profitability income status .

Develop a marketing strategy to target this market. Determine the characteristics of segments in the target market & separate these segments in the market based on these characteristics. .Market Segmentation Process 1. 2. 3. Verify the market segments size if adequate enough to support the organization's product.

Select Target Segment(s) 3. Identify Bases for Segmenting the Market Market Segmentation .Market Segmentation Process 6. Develop Marketing Mix for Each Target Segment 5. Develop Measures of Segment Attractiveness Market Positioning Market Targeting 2. Develop Profiles of Resulting Segments 1. Develop Positioning for Each Target Segment 4.

Levels of Segmentation Mass Marketing Same product to all consumers (no segmentation) Segment Marketing Different products to one or more segments (some segmentation) Niche Marketing Different products to subgroups within segments ( more segmentation) Micromarketing Products to suit the tastes of individuals or locations (complete segmentation) .

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