Market segmentation marketing.ppt
- 2. What is Market Segmentation? A Process of dividing a potential market into distinct sub-markets of consumers with common needs and characteristics. 2
- 3. What is Market Segmentation? OR The breaking down or building up of potential buyers into groups called Market Segmentation. 3
- 4. Some Definitions Market Segmentation – is the process of dividing a total market into groups, or segments, consisting of people or organizations with relatively similar product needs. The purpose is to enable a marketer to design a marketing mix (mm) that more precisely matches the needs of customers in the selected market segments. A Market Segment - consists of individuals, groups, or organizations with one or more similar characteristics that cause them to have relatively similar product needs. 4
- 5. Market Segmentation Example The In Cycle industry, there might be segments like cycle for regular users, sports, adventure, racing, kids, girls etc. 5
- 6. Benefits of Market Segmentation 1. Identifies opportunities for new product development 2. Helps design marketing programs most effective for reaching homogenous groups of buyers 3. Provides Opportunities to expand market 4. Improves allocation of marketing resources 5. Helping in Creating Innovations 6
- 7. 7 Requisites / Each Market Segment should be… Measurable Differentiable Accessible Substantial Actionable
- 8. Levels of Market Segmentation Through Market Segmentation, Companies Divide Large, Heterogeneous Markets into Smaller Segments that Can be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs Mass Marketing Same marketing mix (mm) directed at all consumers (no segmentation, e.g. SX 4 ) Segment Marketing Different marketing mix (mm) to one or more segments (some segmentation, e.g. Tata Nano)
- 9. Mass Marketing One mm for all Segment Marketing One or more mm targeted to one or more segments Niche Marketing One or more mm targeted to one or more sub-segments Micro Marketing (1-1) One or more mm targeted to specific individuals or communities
- 10. FIGURE 7.3 The Classic Segmentation Variables for Consumer Markets 10
- 11. Demographic Variables Perhaps the most widely used and most widely available “Objective” College student and interest in education 50 year old and interest in retirement funds For e.g. Age: 0-5, 6-12, 13-19 Gender: Male / Female Family Size: 1-2, 2-3, 4, 5+ 11
- 12. Psychographics Variables Personality characteristics Marketers appeal to positive/favorable personal characteristics to influence the purchase decision. For e.g. Introvert, extroverts, Aggressive etc. Motives Marketers use individuals’ differing purchase motives to segment a product market. Lifestyles Marketers segment markets according to how individuals choose to spend their time in various activities, their income, their interest and opinions, and their education. For e.g. Liberal, Health and Fitness concious 12
- 13. Geographic Variables Region: North, East, West, , South, North-east etc. City Size: Metropolitan cities, small cities, Towns, Smart Cities etc. Density of Area: Urban, Rural, Semi-Urban Climate: Hot, Humid, Cold, Rainy etc. Internet Marketing has started eroding the geographic segmentation. 13
- 14. Behavioral Variables The consumer are segmented on the basis of their behavior through need-motivation, perception, occasions, benefits, loyalty status etc. Behaviorist often called “usage” Very straightforward - target your users 80/20 rule (80% sales are to 20% of your customers Ethical? Vodka targeting alcoholics? 14
- 15. Once We Have Our Segments We Need to Target Them With a Marketing Mix Three options: Undifferentiated – For e.g. Coco cola Differentiated For e.g. HUL Concentrated For e.g. Ashok Leyland
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