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“Segmentation” is grouping consumers by some
criteria, such that those within a group will respond
similarly to a marketing action and those in a different
group will respond differently.
Consumer are of varying characteristics and buying
Many differing segments occur within a market.
Entire Market “Segment 1" “Segment 2"
Important elements of each
Identification of target markets
Marketers must understand the diversity of
consumer needs in the broader market.
What current competition offers?
How to differentiate for a superior marketing
Fine-tuning of the elements of the marketing
mix to the unique needs of the target market.
Screening of opportunities available in
different target markets using SWOT analysis.
Basis for developing targeted and effective
Facilitates proper choice of target marketing.
Facilitates tapping of the market, adapting the
offer to the target
Makes the marketing effort more efficient and
Benefits the customer as well
Sustainable customer relationships in all
phases of customer life cycle
Higher market Shares
Starting point of any segmentation discussion.
Mass production, mass distribution and mass
promotion of one product for all buyers.
It creates the largest potential market, lowest
costs, lower prices, higher margins.
However, it is difficult to practice “One Size Fits
A marketing plan focused on a defined
segment of the marketplace, rather than the
Micromarketing` is the practice of tailoring
products, brands (micro brands), and
promotions to meet the needs and wants of
micro segments within a market.
Segments Niche Local Areas Individual
Large identifiable group within a market.
Group with similar wants, purchasing power,
geographical location, buying attitudes.
e.g. an auto company may identify four broad
segments based on car buyer’s expectations like :
Buyers have similar wants & needs but they are not
Segment wise pricing for target audience, fewer
A more narrowly defined group.
Concentrating all marketing efforts on a small
but specific and well defined segment of the
Niches do not 'exist' but are 'created' by
identifying needs, wants, and requirements
that are being addressed poorly or not at all
by other firms, and developing and delivering
goods or services to satisfy them.
As a strategy, niche marketing is aimed at
being a big fish in a small pond instead of
being a small fish in a big pond.
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Local customer groups.
Clients and Customer who will buy a product
in the region or area in which it is produced.
Localizing marketing rather than national
For Example : Soft drink with name “JOY” in
Hyderabad. The sale is limited only for
villages in Hyderabad and city of Hyderabad.
The local market includes customers located within
the region the product or service is produced or
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Segments of one.
For Example : B2B marketing.
Customization of offers, logistics, communications
and financial terms for each major account.
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Number of variables which leads to market
Segmentation is done for consumer market
and industrial market.
Bases for segmentation in consumer market:-
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Region : - Segmentation by continent / country/
state / district / city.
Size : - Segmentation on the basis of size
of a metropolitan area as per its
Population density: - urban / sub-urban /rural
Climate: - climatic condition or weather.
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Age (dominant factor)
Titan’s product segmentation on the bases of age:-
Titan Fastrack (for theTitan Fastrack (for the
younger segment)younger segment)
Steel-1077SM01(for elderSteel-1077SM01(for elder
person and professional)person and professional)
Jun 21, 2014 20
Income (dominant factor)
Titan’s product segmentation on the bases of
Titan Nebula (LuxuryTitan Nebula (Luxury
segment watch)segment watch)
Titan Sonata (for massesTitan Sonata (for masses
and budget conscious)and budget conscious)
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Purchasing Power (dominant factor)
Different car segments based on purchasing power:-
Maruti 800Maruti 800
(Budget car segment)(Budget car segment)
Mercedes Benz, BMW, AudiMercedes Benz, BMW, Audi
(for super luxury segment)(for super luxury segment)
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Family life cycle
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Segmentation according to customer’s life-style and
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Markets can be segmented on the basis of buyer behaviour as
well. Variables of buyer behavior are:-
Benefit sought: - Quality / economy / service / look etc of the
Usage rate: - Heavy user / moderate user / light user
User status: - Regular / potential / first time user / irregular/
Brand Loyalty: - Hard core loyal / split loyal / shifting / switches
Occasion: - Holidays and occasion stimulate customer to
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Bases for Segmentation in Industrial Market
These characteristics apply to organizations such as manufacturers
and service providers, as well as resellers, governments, and
Industrial markets might be segmented on characteristics such as:
1. Location : Shipping cost
2. Company type : Company size (a large scale industry /
a small scale industry)
Industry (manufacturing / service)
(public sector / private sector)
3. Behavioral Characteristics : Usage rate
Buying status (first time / potential)
Purchase procedure (Sealed bids/
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1. Select a market or product category.
2. Choose a basis or bases for segmenting the
3. Select segmentation descriptors.
4. Profile and evaluate segments.
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Whether market segmentation is successful or not
can be evaluated by the following questions:-
1. Is it sizeable?
2. Is it growing?
3. Is it profitable?
4. Is it accessible?
5. Is it compatible with the firm’s resources and
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Titan took birth from TATA group in 1984 and
today is India’s market leader in wristwatches and
the sixth largest watchmaker in the world.
Effective Market segmentation has been a great
boon of the company.
Today the company has a model for every price
segment and every market.
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Initially when mechanical technology was the
norm, Titan went against the norm and built-up its
line with Quartz.
Styling was not the factor initially in Indian watch
market but Titan brought the difference.
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Titan is also capturing rural market very
efficiently. Its price range starts from Rs.475-1200
for the basic consumers.
It has also appointed Mahendra Singh Dhoni
(who belongs to Ranchi) as Brand Ambassador to
reach out to rural population for its sonata
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on the other hand, Aamir Khan is capturing urban
It brought out “Aqua” a trendy collection for youth.
Raga for sophisticated Indian women.
Dash for kids segment.
Sonata for masses and budget-conscious.
Fastrack for cool and modern young
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Its brands like Bandhan were aimed at
Couples and EXCTA and SPECTRA were aimed
at common class of office wear.
Through its own retails outlet “World of Titan”;
variety of Designs and price variations Titan has
reached to various classes of customers and