Market Segmentation• Target Marketing- Is a market segmentation and marketcoverage strategy whereby a product is developed andmarketed for a very well-defined, specific segment of theconsumer population.• Target marketing is particularly effective for smallcompanies with limited resources because it enables thecompany to achieve a strong market position in the specificmarket segment it serves without mass production, massdistribution, or mass advertising. It enables firms tocapitalize on the respective serve market shareRtist @ Tourism
Requirements of Market SegmentsIn addition to having different needs, for segments to be practical theyshould be evaluated against the following criteria:• Identifiable: the differentiating attributes of the segments must bemeasurable so that they can be identified.• Accessible: the segments must be reachable through communicationand distribution channels.• Measurable: It has to be possible to determine the values of thevariables used for segmentation with justifiable efforts. This isimportant especially for demographic and geographic variables. Foran organization with direct sales (without intermediaries), the owncustomer database could deliver valuable information on buyingbehavior (frequency, volume, product groups, mode of payment etc).Rtist @ Tourism
• Substantial: the segments should be sufficientlylarge to justify the resources required to targetthem.• Unique needs: to justify separate offerings, thesegments must respond differently to the differentmarketing mixes.• Durable: the segments should be relatively stable tominimize the cost of frequent changes.Rtist @ Tourism
‘Market Segmentation’Market Segmentation is the sub-dividing of customers intohomogenous sub-set of customers where any sub-set mayconceivably selected as market target to be reached with distinctMarketing Mix – Philip Kotler• Segmentation is essentially the identification of subsets of buyerswithin a market that share similar needs and demonstrate similarbuyer behaviour.• The world is made up of billions of buyers with their own sets ofneeds and behaviour. Segmentation aims to match groups ofpurchasers with the same set of needs and buyer behaviour. Such agroup is known as a segment.Rtist @ Tourism
• The process of defining and subdividing a largehomogenous market into clearly identifiable segmentshaving similar needs, wants, or demand characteristicsis called Segmentation.• Its objective is to design a marketing mix that preciselymatches the expectations of customers in the targetedsegment.• Market Segmentation consists of taking the totalheterogeneous market for a product & dividing intoseveral sub-market of segments, each of which tends tobe homogenous in full significant aspects – WilliamStantonRtist @ Tourism
• Market Segmentation is the marketing process ofidentifying and breaking up the total market intogroups of potential customers with similar motivations,needs or characteristics, who are likely to exhibithomogeneous purchase behaviour.• Undertaking this process allows marketing efforts to betargeted at select groups.Market segmentation involves the subdividing of amarket into distinct subgroups of customers, where anysubgroup can be selected as a target market to be metwith a distinct marketing mix. - CIMARtist @ Tourism
• A marketing term referring to the aggregating of prospectivebuyers into groups (segments) that have common needs and willrespond similarly to a marketing action.• Market segmentation enables companies to target differentcategories of consumers who perceive the full value of certainproducts and services differently from one another.• Market Segmentation is the process of splitting customers, orpotential customers, in a market into different groups, orsegments, within which customers share a similar level of interestin the same or comparable set of needs satisfied by a distinctmarketing proposition.Rtist @ Tourism
Market segmentation is the process ofdividing the whole market of goods orservices in groups of people with similarneeds. By making this division there is a highchance that each group responds in favour toa specific market strategy.Rtist @ Tourism
Benefits & LimitationsBenefits:• The Organisation gets to know its customers better.• Provides guidelines for resource allocation.• It helps focus the strategy of the organisation.Limitations:• Targeting multiple segments increases marketingcosts.• Segmentation can lead to proliferation of products.• Narrowly segmenting a market can hamper thedevelopment of broad-brand equity.Rtist @ Tourism
Why Segmentation?• To develop marketing activities• Increase marketing effectiveness• Generate greater customer satisfaction• Create savings• To identify strategic opportunities and niches• Allocation of marketing budget• Adjustment of product to the market need• To estimate the level of sales in the market• To overcome competition effectively• To develop effective marketing programmes• To contribute towards achieving company goalsRtist @ Tourism
Geographic Segmentation• The following are some examples of geographicvariables often used in segmentation.• Region: by continent, country, state, or evenneighbourhood.• Size of metropolitan area: segmented according to sizeof population.• Population density: often classified as urban,suburban, or rural.• Climate: according to weather patterns common tocertain geographic regions.Rtist @ Tourism
Rtist @ TourismLife-cycle stage: Dividing a market into different groups based on which stage in the life-cycle, presented in the table below, reflects the fact that people change the goods andservices they want and need over their lifetime.Life-cycle stagesBachelor Stage young, single people not living at homeNewly Married Couples young, no childrenFull Nest I youngest child under sixFull Nest II youngest child six or overFull Nest III older married couples with dependent childrenEmpty Nest Iolder married couples, no children living withthemEmpty Nest IIolder married couples, retired, no children livingat homeSolitary Survivor I in labour forceSolitary Survivor II retired
Rtist @ TourismAIO InventoriesAIO studies envisage a wide variety of variablesand measures the major dimensions shownActivities Interests Opinions DemographicsWork Family Themselves AgeHobbies Home Social EducationSocial events Job Politics IncomeVacation Community Business OccupationEntertainment Recreation Economics Family sizeClub member Fashion Education GeographyCommunity Food Products City sizeShopping Media Future LifecycleSports Achievements Culture Dwelling
Rtist @ TourismVALS System Classification:• The VALS theory and database were first applied to markets in1978. VALS provides a dynamic framework of values andlifestyles; which helps to explain why people act as they do associal groups and as consumers. VALS, unlike some otherapproaches, waves together:• Demographics, 2. Attitudes, 3. Activities, 4. Consumptionpatterns, 5. Brand preferences. 6. Media graphics.•• The VALS study leads to the identification of four major groups:•• The need driven• The outer directed• The inner directed• The integrated
Rtist @ TourismFemale Lifestyle Types• Cathy the contented housewife• Cathy epitomises simplicity. She is devoted to herfamily and faithfully serves them as motherhousewife and cook. She enjoys a relaxed pace andavoids anything which might disturb her equilibrium.• . Candice-the chic subarbanite• Candice is an urban woman.She is well educated andgenteel. Socializing is an important part of her life.She is a doer, interested in sports and the outdoors,politics and current affairs. Her life is hectic and livedat a fast clip. She is a voracious reader and there arefew magazines she does not read.
Rtist @ Tourism• Eleanor-the elegant socialite: Eleanor is a woman with style. She livesin the city because that is where she want to be. She likes the socio-economic aspects of the city in terms of her career and leisure timeactivities. She is fashion conscious and dresses well. She is financiallysecure and hence not a careful shopper. She shops for status and styleand not for price. She is a cosmopolitan woman who has travelledabroad and wants to.• Mildred-the militant motherMildred is a woman who got marriedyoung and had children before she was ready to raise a family. Nowshe is unhappy. She is frustrated and vents her frustration by rebellingagainst the system. Television provides an ideal medium for her to liveout her fantasies• Thelma-the old fashioned traditionalist: Thelma is a lady who haslived a good life. She has been a devoted wife, a doting mother and aconscientious housewife. Even now, when most of her children haveleft home, her life is centred around the kitchen. She lacks highereducation and has little appreciation for the arts or cultural activities.Her spare time is spent watching TV.
Rtist @ TourismMale lifestyle types are :• Ben-the self made businessman.• Scott-the successful professional.• Dale-the devoted family man• Fred-the frustrated factory worker• Herman the retiring homebody.
• Experiencers– They’re the young enthusiastic, impulsive people who seek variety andexcitement. They spend a comparatively high proportion of income onfashion, entertainment, and socializing.• Thinkers– They’re mature, satisfied, and reflective people motivated by ideals andwho value order, knowledge, and responsibility. They seek durability,functionality, and value in products. Here we’re considering Mont-Blanc• Achievers– They’re successful, goal oriented people who focus on career and family.They favour premium products that demonstrate success to their peers.In this segment we can consider most of the premium timeless luxurywatches, such as Rolex, TAG Heuer, and Omega. Neil Armstrong gaveOmega speed master the ultimate endorsement when he wore it on hishistoric moon walk in 1969.• Innovators– They’re usually successful, sophisticated, active, “take charge” peoplewith a high self esteem. Purchases often reflect cultivated tastes forrelatively upscale, niche oriented products and services. Here we’reconsidering the niche market of upscale segmentation by technologyadaptation.Rtist @ Tourism
• Believers– They’re conservative, conventional, and traditional people with concrete beliefs.They prefer familiar, Indian made products and are loyal to established brands.Here we consider Bisleri. As one of the world’s most trusted brands. Bisleri isleading the way in bringing about positive change in our daily lives. They believein being a part of a meaningful movement called the ‘Aqua Green Revolution’• Strivers– They’re trendy fun loving people who are resource constrained. They favourstylish products that emulate the purchases of those with greater materialwealth. They favour stylish products that emulate the purchases of those withgreater material wealth• Makers– They’re practical, down to earth, self sufficient people who like to work withtheir hands. They seek Indian made products with a practical or functionalpurpose.• Survivors– They’re elderly, passive people concerned about change and loyal to theirfavourite brands.– While to the consumers its a beacon of faith and trust, competitors look uponthem as an example of marketing brilliance.Rtist @ Tourism
Behavioural Segmentation• Usage– Customers can be segmented on the basis of usage status- heavy users, light users& non-users of a product category. The profiling of heavy users allows this groupto receive most marketing attention (particularly promotion efforts) on theassumption that brand loyalty among these people will pay heavy dividends.• User status– Every product has its nonusers, ex-users, potential users, first-time users andregular users. A company cannot always rely on the regular users, it has to attractthe other types as well. The key too attracting potential users, or possibly, evennon-users, is understanding the reasons due to which they are not using yourproduct.• Attitude– Attitude is defined as a learned tendency to respond towards something. People’sresponse towards a product may range from – Enthusiastic, Positive, Indifferent,Negative, Hostile .• Occasions• Brand Loyalty• Benefit SoughtRtist @ Tourism