• A market refers to a set up where two or more parties are
involved in transaction of goods and services in exchange of
money. The two parties here are known as sellers and
• It is the responsibility of the marketers to create awareness of
their products amongst the consumers. It is essential for the
individuals to be aware of the brand’s existence.
• The USPs of the brands must be communicated well to the
• An organization can’t afford to have similar strategies for
product promotion amongst all individuals. Not every
individual has the same requirement and demand.
• The first step in the process of product
promotion is Segmentation
• The division of a broad market into small
segments comprising of individuals who think
on the same lines and show inclination
towards similar products and brands is called
• Market Segmentation refers to the process of
creation of small groups (segments) within a
large market to bring together consumers who
have similar requirements, needs and
• The individuals in a particular segment
respond to similar market fluctuations and
require identical products.
• In simpler words market segmentation can
also be called as Grouping.
• Kids form one segment; males can be part of a
similar segment while females form another
segment. Students belong to a particular
segment whereas professionals and office
goers can be kept in one segment.
• Once the marketer creates different segments within the market, he
then devises various marketing strategies and promotional schemes
according to the tastes of the individuals of particular segment. This
process is called targeting. Once market segments are created,
organization then targets them.
• Targeting is the second stage and is done once the markets have been
• Organizations with the help of various marketing plans and schemes
target their products amongst the various segments.
• Nokia offers handsets for almost all the segments. They understand their
target audience well and each of their handsets fulfills the needs and
expectations of the target market.
• Tata Motors launched Tata Nano especially for the lower income group.
• Positioning is the last stage in the Segmentation Targeting Positioning Cycle.
• Once the organization decides on its target market, it strives hard to create an image of its
product in the minds of the consumers. The marketers create a first impression of the
product in the minds of consumers through positioning.
• Positioning helps organizations to create a perception of the products in the minds of target
• Ray Ban and Police Sunglasses cater to the premium segment while Vintage or Fastrack
sunglasses target the middle income group. Ray Ban sunglasses have no takers amongst the
lower income group.
• Garnier offers wide range of merchandise for both men and women.
• Each of their brands has been targeted well amongst the specific market segments. (Men,
women, teenagers as well as older generation)
• Men - Sunscreen lotions, Deodorant
Women - Daily skin care products, hair care products
Teenagers - Hair colour products, Garnier Light (Fairness cream)
Older Generation - Cream to fight signs of ageing, wrinkles
• A female would never purchase a sunscreen lotion meant for men and vice a versa. That’s
Definition of market segmentation
• The process of defining and subdividing a large homogenous
market into clearly identifiable segments having similar
needs, wants, or demand characteristics.
• Its objective is to design a marketing mix that precisely
matches the expectations of customers in the targeted
• “Market Segmentation in the process of dividing the total
heterogeneous market for a good or service into several
segments, each of which tends to be homogeneous in all
• Focus oriented
• Division of market
• Based on certain specification
• Facilitates specialization
• Decentralized process
• Different levels
• Aids combination 4p’s
• Customized approach
• Facilitates effective management
• Supports study of potentials
Features of market segmentation
Bases of segmentation
User status, loyalty, attitude, perception, customs
Advantages of market
• Facilities consumer-oriented marketing
• Suitable 4P’s
• Effective product strategy
• Facilities decision making
• Exploitation of market opportunities
• Direction to efforts
• Optimum use of resources
• Profit maximization
• “involves evaluating each market segment’s
attractiveness and selecting any one or more
segments to enter.”
1. Helps determine size of the market
2. Identify high growth segments
3. Focus on profit & image building
4. Studies extent of competition
5. Indicates cost advantage
6. Evaluates performance
7. Optimum use of resources