Market segmentation


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Market segmentation

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Market segmentation

  1. 1. Market Segmentation
  2. 2. MARKET SEGMENTATION Market segmentation is based on fact that markets are heterogeneous & not homogeneous. Homogeneous market refer to a market situation where the prospective buyers of any product are found to be uniform in their needs, habits, choices, nature, etc. Heterogeneous market refer to a market situation where the prospective buyers of any product are not found homogeneous in their needs, habits, choices, nature, etc.
  3. 3. Cont’d… Market segmentation refers to dividing the heterogeneous markets into smaller customer groups having certain homogeneous characteristics. Such as income, age, sex, etc. They may differ on the basis of income, gender, age, education, profession, religion, social class, family life, style, culture etc.
  4. 4. DEFINITION Acc to William J. Stanton “ Market Segmentation consist of taking the total heterogeneous market for a product & dividing it into several sub markets or segments each of which tends to be homogeneous in all significant aspects. Acc to Philip Kotler Market segmentation is the sub-dividing of a market into homogeneous subset of consumers , where any subset may conceivably be selected as a market target to be reached with a distinct marketing mix.
  5. 5. OBJECTIVES OF M.S To make grouping of customers on the basis of their homogeneous characteristics. To identify the needs, tastes, buying-motives of target customers. To determine marketing strategies, targets & goals of the firm. To make the activities of the firm consumer oriented. To identify the areas where the customers may be created and market area can be expanded. The main aim of market segmentation is to prepare separate marketing programmes or strategies for each segment so that maximum satisfaction to consumers of different segments may be provided.
  6. 6. Reasons for the development of M.S Customer-Orientation Technological Advancement Use of cost reducing techniques Increase in purchasing power Increase in competition
  7. 7. Requirement/ Criteria For Effective Segmentation Identifiable Measureable Accessible Responsive Significant Substantial
  8. 8. APPROACHES OF M.S The marketeers adopt several app. To segment a market. App. To market segmentation Mass Marketing Product Differentiation Marketing Target Marketing
  9. 9. MASS MARKETING In this total market is considered as one segment.  Under mass marketing only one product is produced & sold in the market for all customers with help of common marketing programme. It assumes that there is no significant difference amongst Consumers in terms of their need & wants e.g. coca-cola
  10. 10. PRODUCT DIFFERENTIATION MARKETING In this marketing, marketeers uses product differentiation app. Once marketeers learnt that consumers would not accept one quality product, the marketeers try to provide different size, colours, shapes, features & qualities in his product as per the needs & wants of the customer of different segments. It provide different product to different segment E.g. maruti udyog ltd.
  11. 11. TARGET MARKETING It defined as a set of actual potential buyers of a product, service or idea . Target marketing help the marketeer to correctly identify the market- the groups of consumers for whom the product is designed. It has 3 steps :- 1.Market segmentation 2.Market targeting 3.Product positioning
  12. 12. Segmentation Process Analyse the characteristics of customers Disaggregate the customers into suitable segments Formulate different marketing mix for different segments Feedback of various segments Select the higher potential segments Analyse the needs of Customers
  13. 13. BASIS OR CRITERIA OF M.S The step towards developing a segmentation strategy is to locate the bases or basis for segmenting the market. There are two simple division of product market. I. Consumer market II.Industrial market
  14. 14. On the basis of consumer market 1. Geographical basis 2. Demographic basis 3. Psychological basis 4. Behavioral basis 5. Marketing basis
  15. 15. 1) GEOGRAPHICAL BASIS It is the most simple, convenient, popular, and usual base for mkt segmentation. It includes : Area Region City size Density Climate Urbanization
  16. 16. 2) DEMOGRAPHIC BASIS Under this basis, a market tries to differentiate between groups of customers on the basis of demographic variables. It includes:- Gender Age Income Education Religion Nationality
  17. 17. Cont’d… Occupation Marital Status Family size Family life-cycle
  18. 18. 3) PSYCHOGRAPHIC SEGMENTATION It describe the human characteristics of consumers. It segment the market on the basis that how people act. These include:- Personality  Life-style  Social class Culture Values Beliefs Attitude
  19. 19. 4) BEHAVIORAL SEGMENTATION Consumer behavior may also form the basis of market segmentation. It includes:- Occasions Benefits Quality Service Economy Specially
  20. 20. Cont’d… Users status Non-user Potential user First time user Regular user Ex-user Buyer-Readiness Stage  Unaware  Aware  Informed
  21. 21. Cont’d…  Interested  Desired  Intended to buy User Rate Loyalty status  Hard core loyal  Soft core loyal  Switchers
  22. 22. 5) MARKETING BASIS Marketing conditions also form an important basis for market segmentation. There are latest variables used by modern marketeers. This include:- Degree of competition Channels of distribution Buyer with price consciousness
  23. 23. ON THE BASIS OF INDUSTRIAL PRODUCT 1. Type of business activities basis 2. Geographical location basis 3. Usual purchasing procedure basis 4. Size of user
  24. 24. IMPORTANCE OF MS  Knowledge of marketing opportunities  Knowledge of customer needs  Adopting effective marketing programme  Proper allocation of resources  Adjustment in products  Increasing sales volume  Better assessment of the competition  Effective advertising appeals  Enhances marketing efficiency  Benefits to consumers