2. Market Segmentation What is Market Segmentation? Subdividing a market along some commonality, similarity, or kinship. Allow your marketing or sales program to focus on the subset of prospects that are most likely to purchase what you offer. The members of a market segment share something in common.
3. Forms Of Market Segments Geographic Segmentation Distribution Segmentation Media Segmentation Price Segmentation Demographic Segmentation Time Segmentation Psychographic or Lifestyle Segmentation
4. Geographic Segmentation Companies segment the market by attacking a restricted geographic area. A brand could be sold only in one market, one state, or one region of the Country. Geographic segmentation can take many forms (urban versus rural, north versus south, seacoasts versus interior, warm areas versus cold, high-humidity areas versus dry areas, high-elevation versus low-elevation areas, and so on). Example: consumers in southern states like Tamil Nadu show a preference for brewed coffee whereas consumers in many other states in India tend to prefer tea.
5. Distribution Segmentation Different markets can be reached through different channels of distribution. Common among small companies that grant each channel a unique brand to gain distribution within that channel. Example: upscale line of clothing sold only in expensive department stores, or a hair shampoo sold only through upscale beauty salons.
6. Media Segmentation It is based on the fact that different media tend to reach different audiences. Media segmentation is most often practiced by companies that have some control over the media and can somehow discourage competitors from using that media. Example :Promotion of Movie on Radio,Tv shows etc.
7. Price Segmentation Variation in household incomes creates an opportunity for segmenting some markets along a price dimension. If incomes of Mass range from low to high then a company should offer some cheap products, some medium-priced ones, and some expensive ones. Example :Nirma washing powder was launched as the lowest price detergent in India primarily targeted at the middle income segment of the market.
8. Demographic Segmentation Aims at understanding the prospective market, and taking necessary steps to ensure that the consumer needs of a targeted group is fulfilled. Gender, age, income, housing type, and education level are common demographic variables. Helps the organization to divide the market into several groups, each having a common variable, and target each of these groups to enhance the performance of the organization. Example: . Music downloads tend to be targeted to the young, while hearing aids are targeted to the elderly.
9. Time Segmentation The active time segment specifies a block of working time. You might think of it as a window in time that u use to focus on a specific part of your segment
10. Psychographic Segmentation Psychographic segmentation, or behavioral segmentation, is a method of dividing markets on the bases of the psychology and lifestyle habits of customers. Based upon multivariate analyses of consumer attitudes, values, behaviors, emotions, perceptions, beliefs, and interests. Psychographic variables are also known as IAO variables - Interests, Activities and Opinions. Example : McDonalds changed their menu in India to adapt to the consumer preferences like beef is not included in the menu,Titan watches have a wide range of of sub brands like Edge ,Regalia, Nebula,fast track and Raga,to appeal different lifestyle segments.
11. Common Mistakes in market segment Segmenting a segment : this can sometime lead to downfall in market share as the target market is very small.eg Creating too many segments: There is a practical limit to the size of segments that companies can effectively target. If you create more than four or five market segments, you run the risk that the resulting segments will be too small to target. Targeting people instead of returns: A market segment might represent a large percentage of the population, but a small part of the market. It is necessary to see that a particular segment is giving efficient returns.
