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Introduction and definition of market 
segmentation 
BY 
SMART LEARNING WAY
contents 
☻Introduction 
☻Brief introduction about market 
segmentation 
☻Definition of market segmentation 
☻Market strat...
introduction to market 
segmentation 
• The market for any product is normally 
made up of several segments. A ‘market’ 
a...
• In order to capture this heterogeneous 
market for any product, marketers usually 
divide or disintegrate the market int...
• Thus we can say that market 
segmentation is the segmentation of 
markets into homogenous groups of 
customers, each of ...
• The importance of market segmentation 
results from the fact that the buyers of a 
product or a service are not homogeno...
• These common characteristics allow 
developing a standardized marketing mix 
for all customers in this segment. 
• Throu...
• Process of dividing the market according 
to similarities that exist among the various 
subgroups should be within the m...
• Market segmentation and diversity are 
complementary concepts. 
• Without a diverse market place, 
composed of many diff...
• Diversity in the global marketplace makes 
market segmentation an attractive, viable, 
and potentially highly profitable...
• United states, Canada, Western Europe, 
Japan, Australia, and other industrialized 
nations makes these marketplaces 
ex...
• Thus, market segmentation is a positive 
force for both consumers and marketers.
Definition of market 
segmentation 
• Dividing the market by grouping the 
customer with similar “tastes & 
preferences” i...
• Segmentation helps marketers 
understand the needs of different 
customer better and serve them with 
better value propo...
• According to Philip kotler, “ market 
segmentation is the sub-dividing of market 
into homogeneous sub-sections of 
cust...
• According to W.J.Stanton, “market 
segmentation consists of taking the total 
heterogeneous market for a product and 
di...
• market segmentation allows a marketer to 
take a heterogeneous market, a market 
consisting of customers with diverse 
c...
• mc Donald's and other marketers have 
market segmentation to be a valuable 
technique for the following reasons : 
effi...
• The problem is that competitors follow the 
same logic. They, too have identified the 
segment with the “large” potentia...
• The segment with the biggest potential is 
not always the most profitable, It may be 
much more profitable to attempt to...
• It is obviously costly to do direct battle with 
large, established competitors in a broadly 
based market segment. 
• A...
MARKETING STRATEGY AND 
MARKET SEGMENTATION: - 
• When it comes to marketing strategies, 
most people spontaneously think ...
• Market segmentation and the identification 
of target markets, however, are an 
important element of each marketing 
str...
ATTRIBUTES OF EFFECTIVE 
SEGMENTATION 
• Market segmentation is resorted for 
achieving certain practical purpose. For 
ex...
• A) Identifiable: The differentiating 
attributes of the segments must be 
measurable so that they can be identified. 
• ...
• D) Profitable: There is no use in locating 
segments that are sizeable but not 
profitable. 
• E) Unique needs: To justi...
• G) Measurable: The potential of the 
segments as well as the effect of a 
specific marketing mix on them should be 
meas...
Conclusion: 
• Market segmentation is the technique 
adapted by marketing organizations for 
greater penetration into mark...
Market segmentation is also separating the 
customers into different groups, and 
sometimes can split up into different ag...
Review of the topic: 
☻Introduction 
☻Brief introduction about market 
segmentation 
☻Definition of market segmentation 
☻...
Bibliography: 
1) The essence of international marketing 
Author : Stanly J. Paliwoda 
Prentice –Hall of India, New Delhi ...
3. Marketing management 
Author : S.A. sherlekar 
Himalaya publishing house 
4. management-2 
Authors: Anand K. Bewoor, 
S...
5. Marketing management 
Authors: Douglas .v. ymple 
publisher by: john Wiley &sons pvt. Ltd. 
6. Strategic management 
Au...
Introduction and definition of market segmentation
Introduction and definition of market segmentation
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Introduction and definition of market segmentation

Introduction and definition of market segmentation

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Introduction and definition of market segmentation

  1. 1. Introduction and definition of market segmentation BY SMART LEARNING WAY
  2. 2. contents ☻Introduction ☻Brief introduction about market segmentation ☻Definition of market segmentation ☻Market strategy and market segmentation ☻Attributes of effective segmentation ☻Conclusion ☻Review of the topic ☻Bibliography
  3. 3. introduction to market segmentation • The market for any product is normally made up of several segments. A ‘market’ after all is the aggregate of consumers of a given product. And, consumer ( the end user), who makes a market, are of varying characteristics and buying behavior. There are different factors contributing for varying mind set of consumers. It is thus natural that many differing segments occur within a market.
  4. 4. • In order to capture this heterogeneous market for any product, marketers usually divide or disintegrate the market into a number of sub-markets/segments and the process is known as market segmentation.
  5. 5. • Thus we can say that market segmentation is the segmentation of markets into homogenous groups of customers, each of them reacting differently to promotion, communication, pricing and other variables of the marketing mix. Market segments should be formed in that way that difference between buyers within each segment is as small as possible. Thus, every segment can be addressed with an individually targeted marketing mix.
  6. 6. • The importance of market segmentation results from the fact that the buyers of a product or a service are not homogenous group. Actually, every buyer has individual needs, preferences, resources and behaviors. Since it is virtually impossible to cater for every customer’s individual characteristics, marketers group the customers to market segments by variables that they have in common.
  7. 7. • These common characteristics allow developing a standardized marketing mix for all customers in this segment. • Through segmentation, the marketer can look at the differences among the customer groups and decide on appropriate strategies/offers for each group. This is precisely why some marketing gurus/experts have described segmentation as a strategy of dividing the markets for conquering them.
  8. 8. • Process of dividing the market according to similarities that exist among the various subgroups should be within the market. The similarities may be common characteristics or common needs and desires. Market segmentation comes about as a result of the observation that all potential users of a product are not alike, and that the same general appeal will not interest all prospects.
  9. 9. • Market segmentation and diversity are complementary concepts. • Without a diverse market place, composed of many different people with different backgrounds, countries of origin, interests, needs and wants, and perceptions, there would be little reason to segment markets.
  10. 10. • Diversity in the global marketplace makes market segmentation an attractive, viable, and potentially highly profitable strategy. • The necessary condition for successful segmentation of any market are a large enough population with sufficient money to spend and sufficient diversity to lend itself to partitioning the market into sizable segments on the basis of demographic, psychological, or other strategic variables.
  11. 11. • United states, Canada, Western Europe, Japan, Australia, and other industrialized nations makes these marketplaces extremely attractive to global marketers. • When marketers provide a range of product or service choices to meet diverse consumer interests, consumers are better satisfied, and their overall happiness, satisfaction, and quality of life are ultimately enhanced.
  12. 12. • Thus, market segmentation is a positive force for both consumers and marketers.
  13. 13. Definition of market segmentation • Dividing the market by grouping the customer with similar “tastes & preferences” into one segment is called segmentation. • Different product rangers target different customer.
  14. 14. • Segmentation helps marketers understand the needs of different customer better and serve them with better value propositions. • If marketers know which segments of the market they are targeting they can design their marketing mix to suit the customer in the segment.
  15. 15. • According to Philip kotler, “ market segmentation is the sub-dividing of market into homogeneous sub-sections of customers. Where any sub-section may conceivably be selected as a market target to be reached with a distinct marketing mix.”
  16. 16. • According to W.J.Stanton, “market segmentation consists of taking the total heterogeneous market for a product and dividing it into several sub-markets or segments, each of which tends to be homogeneous markets which are made up of individuals or organizations with similar need, wants and behavioral tendencies.”
  17. 17. • market segmentation allows a marketer to take a heterogeneous market, a market consisting of customers with diverse characteristics, needs, wants and behaviors, and carve it up into one or more homogeneous markets which are made up of individuals or organizations with similar needs, wants and behavioral tendencies.
  18. 18. • mc Donald's and other marketers have market segmentation to be a valuable technique for the following reasons : efficient use of marketing resources Better understanding of customer needs Better understanding of the competitive situation Accurate measurement of goals and performance.
  19. 19. • The problem is that competitors follow the same logic. They, too have identified the segment with the “large” potential and are directing their efforts as it. • As a result, the attractive segment might have several brands fighting for it, whereas there might be a smaller segment that no brand is attempting to serve. • This phenomenon is very common and is called the majority fallacy.
  20. 20. • The segment with the biggest potential is not always the most profitable, It may be much more profitable to attempt to gain a small segment, even if it represents only 5% of the market, than to fight ten other brands for a share of a large segment that represents 70% of the market.
  21. 21. • It is obviously costly to do direct battle with large, established competitors in a broadly based market segment. • A concentration strategy focusing on a smaller segment is particularly useful to a small firm that enters a market dominated by several larger ones. This is some times called a niche strategy. It may, in fact, be suicidal for the small company to compete with the larger once for the large segment.
  22. 22. MARKETING STRATEGY AND MARKET SEGMENTATION: - • When it comes to marketing strategies, most people spontaneously think about the 4Ps (Product, Price, Place, Promotion) – maybe extended by three more Ps for marketing services (People, Processes, Physical Evidence).
  23. 23. • Market segmentation and the identification of target markets, however, are an important element of each marketing strategy. They are the basis for determining any particular marketing mix. Basic steps in marketing strategy are as follows:-
  24. 24. ATTRIBUTES OF EFFECTIVE SEGMENTATION • Market segmentation is resorted for achieving certain practical purpose. For example, it has to be useful in developing and implementing effective and practical marketing programmes. For this to happen, the segments arrived at must meet certain criteria such as:-
  25. 25. • A) Identifiable: The differentiating attributes of the segments must be measurable so that they can be identified. • B) Accessible: The segments must be reachable through communication and distribution channels. • C) Sizeable: The segments should be sufficiently large to justify the resources required to target them. A very small segment may not serve commercial exploitation.
  26. 26. • D) Profitable: There is no use in locating segments that are sizeable but not profitable. • E) Unique needs: To justify separate offerings, the segments must respond differently to the different marketing mixes. • F) Durable : The segments should be relatively stable to minimize the cost of frequent changes.
  27. 27. • G) Measurable: The potential of the segments as well as the effect of a specific marketing mix on them should be measurable. • H) Compatible: Segments must be compatible with firm’s resources and capabilities.
  28. 28. Conclusion: • Market segmentation is the technique adapted by marketing organizations for greater penetration into markets and also to maximize sales turnover and profits. The usefulness of this technique is the same, irrespective of the nature of the product or whether it is a good or bad service. Segmentation can be used as a powerful technique owing to a specific service characteristic, that is, variability.
  29. 29. Market segmentation is also separating the customers into different groups, and sometimes can split up into different age groups because different age customers are interested in different things from the business. Market segmentation is a marketing approach that encompasses the identification of different groups of customers with different needs or responses to marketing activity. The market segmentation process also considers which of these segments to target.
  30. 30. Review of the topic: ☻Introduction ☻Brief introduction about market segmentation ☻Definition of market segmentation ☻Market strategy and market segmentation ☻Attributes of effective segmentation ☻Conclusion ☻Review of the topic ☻Bibliography
  31. 31. Bibliography: 1) The essence of international marketing Author : Stanly J. Paliwoda Prentice –Hall of India, New Delhi 2) Principles of marketing Authors : Philip Kotler Gary Armstrong Prentice –Hall of India Private Limited
  32. 32. 3. Marketing management Author : S.A. sherlekar Himalaya publishing house 4. management-2 Authors: Anand K. Bewoor, S. KULKARNI Tech-max publications, pune
  33. 33. 5. Marketing management Authors: Douglas .v. ymple publisher by: john Wiley &sons pvt. Ltd. 6. Strategic management Authors :Mugh Macmillan, Mahen Tempoe published by: oxford university 7. internet

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