Requirements for effective segmentation
This document discusses market segmentation strategies for businesses. It identifies key criteria for effective segmentation, including segments being measurable, accessible, substantial, and differentiable in their responses. It then outlines approaches for segmenting business markets based on demographics, operating variables, purchasing behaviors, and personal characteristics. Segmenting international markets may also consider geographic, economic, political/legal, and cultural factors. The requirements for effective segmentation are that segments are measurable in size/profile, accessible to reach/serve, large/profitable enough, and will respond differently to marketing approaches. The target market consists of buyers sharing needs/characteristics that the company chooses to serve, and segments should be evaluated based on size/growth, level of competition, substitutes
Requirements for effective segmentation
- 1. IDENTIFYING MARKET SEGMENTS AND TARGET
- 2. Effective Segmentation Criteria • Size, purchasing power, profiles of segments can be measured. • Segments can be effectively reached and served. • Segments are large or profitable enough to serve. • Segments must respond differently to different marketing mix elements & programs. • Effective programs can be designed to attract and serve the segments.
- 3. Segmenting for Business Markets Demographic Operating Variable Purchasing Approaches Situational Factors Personal Characteristics
- 4. Segmenting Business Markets • Demographic segmentation – Industry, company size, location • Operating variables – Technology, usage status, customer capabilities • Purchasing approaches • Situational factors – Urgency, specific application, size of order • Personal characteristics – Buyer-seller similarity, attitudes toward risk, loyalty
- 5. Segmenting International Markets • Geographic segmentation – Location or region • Economic factors – Population income or level of economic development • Political and legal factors – Type / stability of government, monetary regulations, amount of bureaucracy, etc. • Cultural factors – Language, religion, values, attitudes, customs, behavioral patterns
- 6. Requirements for Effective Segmentation Measurable Size, purchasing power, and profile of segment Accessible Can be reached and served Substantial Large and profitable enough to serve Differentiable Respond differently Actionable Effective programs can be developed
- 7. Target Market Consists of a set of buyers who share common needs or characteristics that the company decides to serve
- 8. Evaluating Market Segments Segment size and growth • Level of competition • Substitute products • Power of buyers • Powerful suppliers Segment structural attractiveness Company objectives and resources
- 9. Created by –priyanka yadav ,lady shri ram college , during an internship by prof. Sameer mathur. IIM lucknow