Segmentation
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Segmentation analysis is used to improve marketing programs for existing products or introduce new products. There are several bases for segmentation including geographic, demographic, psychographic, and behavioral factors. While demographic analysis can help identify market potential, it does not accurately predict brand choices. Effective segmentation requires the segments to be measurable, accessible, substantial in size, differentiated from others, and actionable through different marketing strategies which range from mass market to niche approaches.
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Segmentation
- 1. Segmentation
- 2. Segmentation analysis • To improve the marketing program of an existing product • To introduce a new product
- 3. Basis for segmentation • Geographic • Demographic • Psychographic • Behavioural
- 4. Limitations • Demographic analysis is helpful for identifying market potential • It is insensitive for predicting specific brand choice • Social class, reference group, family life cycle have implications particularly for promotion and distribution
- 5. Benefit Segmentation • Discover the product characteristics consumers use to distinguish between brands • Discover other characteristics important to consumers • Survey for preferences for different combinations of characteristics
- 6. Competitive Segmentation • Basis for segmentation is the value/cost ratio • A differentiated product is truly so only till the emergence of the first follower. • Measuring profitability by customer group is important. Else major changes in competitive positioning will go undetected. • Segmentation is competitor specific. Competitors choose parts of a segment.
- 7. Segmentation Strategy • Focus on category specific attitudes • Assessment of relationship between cost and value by customer group • Assessment of cost on a comparative basis with select competitors • Assessment of eventual effect on cost and volume of changing the definition of the segment - segment profitability • Identify opportunities for action
- 8. Requirements for effective segmentation • Measurable • Accessible • Substantial • Differentiable • Actionable
- 9. Segmentation strategies • Mass market • Segmented • Multi-segmented • Niche • Multi-sided platforms