Segmentation of the Botswana Property Market.

1. Market Segmentation:
The Botswana Property Market
Guruwo Paul T. guruwopt@gmail.comPT Guruwo BA ISAGO University 1

2. Market Segmentation
•Markets comprise of a variety of consumers who differ in
terms of their wants, tastes, resources, locations, buying
practices, etc.
•Due to limited resources, companies cannot appeal to all
buyers in the marketplace, in the same way.
•Through market segmentation, companies divide large
heterogeneous markets, into smaller homogeneous
subsets that they can reach more efficiently and
effectively with products and services which match buyer’s
unique needs. PT Guruwo BA ISAGO University 2

3. 3 major steps in the STP strategy
• Step1; Market segmentation is to divide a
large market into smaller groups of buyers
with distinct needs, characteristics, or
behaviors that might require separate
products or marketing mixes.
• Step2; Market targeting is evaluating each
market segment's attractiveness and
selecting one or more of the market
segments to enter.
• Step3; Market positioning is setting a
competitive positioning for the product in
the minds of consumers and creating a
detailed marketing mix.
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• Identify bases for segmentation the
market
• Develop profiles of resulting
segments
Market segmentation
• Develop measures to segment
attractiveness
• Select the target markets / segments
Target Marketing
• Develop positioning for each target
segment
• Develop marketing mix for each
target segment.
Market Positioning

4. 1) Create new opportunities: Segmentation can expose
unexplored markets and the firm can identify better
opportunities.
2) Company’s focused effort: Segmentation makes marketers
to focus more on differing customer needs and respond
accordingly.
3) Better budget allocation: Effective budget/ resources
allocation to the needs of each segment thus better returns
from each segment resulting in increased profitability.
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Benefits of Segmentation

5. 4) Improved customer-satisfaction: Firm can make fine adjustments
to the product/ service offerings, thus better matching of
customer needs, allowing higher level of customer satisfaction.
5) Competitive advantage: Identifying unique market segment’s
needs allows dominating that particular segment, thus gaining a
competitive advantage. Firm can thereby compete effectively in
one or more small markets.
6) Choice of media: Segmentation allows effective communication to
selected markets (targeted communication). It assists in choice of
media to u use. PT Guruwo BA ISAGO University 5
…cont…Benefits of Segmentation

6. Methods/Bases for Segmenting Markets
1. Geographic segmentation e.g. world region, country region, city,
density, climate, etc.
2. Demographic segmentation e.g. age, nationality, gender, family size,
income, education, religion, race, generations, population densities etc.
3. Psychographic segmentation e.g. social class, lifestyle, personality,
activities, interests, opinions (AIOs), etc.
4. Behavioral segmentation e.g. occasions, benefits, user status, usage
rate, loyalty status, readiness stage, attitude toward product, etc.
5. Hybrid/ Multi-attribute Segmentation:- segmenting using one or more
methods of segmentation i.e. combining several variables e.g. Geo-
demographics PT Guruwo BA ISAGO University 6

7. Segmenting the Botswana Property Market
The Botswana property market can be divided in order
to:
•Fully identify potential buyers for specific real estates.
•Match the demand and supply forces in the market.
•Tailor make properties according to the needs of the
consumers.
All this can be done using any one or a combination of
the following segmentation bases;
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8. 1. Geographic segmentation
Dividing a market into different topographical
units e.g. regions, cities, urban/ rural, climate
etc.
• Regions/Districts: Kweneng, Ngamiland,
Chobe, Ghanzi, Kgalagadi, Kgatkeng, etc.
• City: Gaborone, Francistown, Kasane,
Lobatse, Selibe-Pikwe, Maun, Serowe, etc.
• Urban/rural: measured by the area’s
population density e.g. Mochudi, Sowa, etc.
• Climate: tropical, arid, rainforest, desert e.g.
Kalahari Desert, Pandamatenga, Tuli Block,
etc. PT Guruwo BA ISAGO University 8

9. 2. Demographic segmentation
Divide segments basing on age, gender, family size, family life
cycle, education, religion, race, generation, etc.
a) Age & Life cycle stage- consumer property needs and wants
change with age e.g. teens, young adults, older couples. These
might require town bachelor pads, apartments and rural
houses respectively.
b) Family size- Size of family determines the number of bedrooms
and or ablution facilities needed in a housing setup.
c) Gender- depending on the sex composition of members in a
family setup, separate rooms may be needed for mature
children of opposite sex.PT Guruwo BA ISAGO University 9

10. • Demographic factors are the most popular bases for segmenting customer
groups.
The reasons being:
i. Consumer needs, wants, and usage rates often vary closely with
demographic variables, e.g. highly educated may be earning more income
thus seek more spacious and comfortable houses .
ii. Demographic variables are easier to measure than most other types of
variables.
iii. Even when market segments are first defined using other bases, such as
benefits sought or behavior, their demographic characteristics must be
known in order to assess the size of the target market and to reach it
efficiently.
iv. Demographic variables are easily available in secondary data source such
as the central statistical offices, birth and death registrar’s office etc.
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conti… Demographic segmentation

11. 3. Psychographic segmentation (AIO/ VALS)
Divided according to how a person thinks, feels and behaves, using
personality, lifestyle, values, opinions, attitudes, motivations, social class
and belief systems.
 Personality- outgoing, ambitious, aggressive, impulsive. Nature loving
people might choose to stay in Mokgolodi, Kasane, Tuli Block and other
countryside upmarket residential areas.
 Lifestyles- (achievers, strivers, survivors). Achievers may stay in areas
that reflect their high status like Phakalane, Partial, The Village,
Notwane etc.
 Social class-(lower, middle, upper classes). Opinion Leaders like Chiefs
might chose to stay close to their areas of chieftaincy.
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12. 4. Behavioural segmentation
Divide segments basing on consumers’ behavior like:
• Benefits sought,
• User or usage status,
• Loyalty status,
• Occasions,
• Readiness stage,
• Attitude toward product.
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13. a) Benefit sought- can be
convenience, safety, esteem
etc. Properties next to the
Central Business District like
Partial and Phase 2 may
appeal more to those that
hate traffic congestions and
like the city’s night life.
PT Guruwo BA ISAGO University 13
…cont…. Behavioural segmentation

14. b) User status- e.g. non-users, potential users, regular
users. Regular users of entertainment centres may
prefer properties within their proximity.
c) Usage rate- e.g. light, medium and heavy users.
Sport enthusiasts may envy properties next to
sporting facilities or gym centers e.g. golfers would
prefer properties close to the Phakalane Golf Estates
of the Blue Trees.
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…cont…. Behavioural segmentation

15. d) Loyalty status- some consumers are:
i. Hard-core loyals – one brand all the time, some
holidaying resorts like Kasane or Chobe National Parks
always appeal to hard core loyals.
ii. Split loyals – loyal to 2 or 3 brands. Others prefer
properties in Mogoditshane, Mopane or Ledumadumang
and nowhere else.
iii. Switchers – no loyalty to any brand. These get a variety
of tastes say from holidaying facilities.
PT Guruwo BA ISAGO University 15
…cont…. Behavioural segmentation

16. e) Occasions: Customers may
purchase products
regularly, occasionally or for
special reasons e.g.
valentine/ mothers’ day/
birthday.
• Places like The Lions Park
Game Reserve are
frequented for special
occasions like parties, fun-
days and conferences.
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…cont…. Behavioural segmentation

17. 5. Hybrid/Multi-Attribute segmentation
(geo-clustering)
• Combines several variables e.g. geo-demographic-
people living in towns, aged 45-65years. Affluent
properties in Notwane are occupied mostly by
pensioners.
• Geo-clustering captures the increasing diversity of
the population and marketing to micro segments
has become accessible even to small organizations
as database costs decline.
17PT Guruwo BA ISAGO University

18. Conclusion
• Marketers no longer talk about the average
consumer or even limit their analysis to only a
few market segments. Increasing trends
towards combining several variables is
rampant in an effort to identify smaller,
better defined target groups.
PT Guruwo BA ISAGO University 18

19. Thank you
Paul T. Guruwo
Marketing Management Lecturer & PhD Candidate,
Department of Entrepreneurship,
BA ISAGO University,
P. Bag 149,
Gaborone, Botswana
guruwopt@gmail.com
PT Guruwo BA ISAGO University 19