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Notes on Segmentation in marketing self written

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  1. 1. Segmentation<br />A single product may not be consumed by all. There are very few generic products like Salt which is consumed by everyone without any differentiation. But this may not be true in all the cases. And also marketer since has limited resources, cannot fulfil requirements of all the consumers who have different demands, thus marketer had to select a particular segment. Segmentation is defined as segregating a particular set of customers having similar demand and share similar characteristics.<br />Segmentation can be on basis of Geography, Demography, Psychograph, behavioral, etc...<br />Geographic Segmentation<br />Geographic segmentation implies dividing market into different segments such as nations, states, districts etc... In context of India marketers need to segment the market in terms of North India, South India and so on because the tastes and demands differ a lot. There is difference ion Climatic conditions, the food habits, the cultures etc... Thus Haldirams has different variants of its snacks or North Indian states and different for South Indian States.<br />Also the markets can be segmented based on Rural and Urban markets. The marketers launch their product in different packages and different variants in Rural and Urban markets. For instance most of the FMCG firms like HUL and P&G launched their shampoos in very small sachets in rural markets. Also their marketing campaign differs in both the segments.<br />Demographic Segmentation<br />The customers can be segregated based on different demographic factors too<br />Age<br />Based on age the customers can be segmented as Infant, Child, Youth, Middle Aged and Old. Each age group has different sets of requirements with different habits and needs to be targeted differently. For Instance the Old aged customer will be more conventional and risk averse and would be demanding healthy food and a youngster would prefer modern trend and is risk taking and will also prefer junk food. Thus Sanskar and Aastha TV target Old aged people and MTV target Youngsters and Cartoon Network and Pogo TV target Children.<br />Life Stage<br />Life stage implies the stage of life of the customer. He may be married, or is a grandfather, or is at stage of searching for employment or is taking care of his old parents. The customer can be segmented on this basis too. Especially in case of women their role differs a lot based on their role played. Thus it becomes per se necessary to segment based on this criterion.<br />Income<br />Income is also one of the vital bases of segmentation. Marketer can segment based on Income level and position its products to target specific income group. For Instance HUL targets Lower Income group with Life Buoy and Liril; Middle Income group with Lux and Higher Income group with Dove. This segmentation is also used in case of price differentiation between discounted stores and premium stores. Pantaloons have a Showroom targeting higher segment and Factory Outlets to cater needs of lower income. <br />Social Class<br />Consumer eats food, wears clothes and uses products based in his social class to. A manager wears luxury suits, drives in a Mercedes and uses Gucci Perfumes and a Labour wears cheaper clothes, rides bikes and scooters and uses talcum powder. Thus customer can be segmented based on roles played by them and their social status. <br />Gender<br />Gender becomes one of the most important parameter of segmenting markets. Most of the marketers use this basis. The cosmetics, apparels, healthcare etc uses this kind of segmentation. For instance Hero Honda launched its Pleasure specifically targeted to Young Girls. Axe promotes its products focusing on male Youth. Himami’s fair and Handsome is made specifically for Make youth.<br />Psychographic Segmentation<br />In this buyers are divided into different segments based on their personality, psychological traits, life style etc... A customer could be trend adopter, trend follower or a trend setter. He can be Achiever, Follower, Risk Averse, and Extrovert, Judgemental etc... Thus based on once lifestyle and values the market can be segmented. For Instance Toyota Innova segmented market based on values and targeted an individual who has values for his family. Also Mountain Dew focuses on Adventurous customers. <br />Behavioural Segmentation<br />Apart from the above discussed factors, a marketer also uses behavioural factors to segment the market.<br />Occasions<br />Market can also be segment based on various occasions. For instance Christmas, Diwali, Mothers day, father’s day Valentine’s Day etc... In a country like India with many different religions and customs, marketer also uses this basis for segmenting the market. For instance Hallmarks cards and Archie’s Uses this basis. Also Cadbury segments the market based on various festivals and occasions like First day of month to promote its product, “Diary Milk”.<br />Benefits<br />Customers can be grouped based on the benefit they arrive from using the product. For instance some use cool drinks for the purpose of quenching thirst and some for treating guest and others for hanging out. Thus Companies like Pepsi and Coca Cola targets different customers for different products promoting different purposes. Also Shampoos have different benefits for different customers. For Instance P&G’s Pantene is promoted for Silky and Shining hair, Garnier’s silk and Strong for Strong hair and head and Shoulders for Dandruff free hair.<br />Others<br />Apart from the above discussed factors, the buyer can be segmented based on different behavioural factors like Usage rate (frequent user, medium user, low usage etc...), user Status (first time user, replaced user, secondary user, buyer, influencer etc...0 and also Loyalty status (Hard Core loyal, Switcher, Shifting Loyal and Split loyal).<br />Conclusion<br />Thus as a marketer one must be able to segment the market in an appropriate way and should target relevant market and finally position his product in a way most appealable to the targeted segment. A segment must be measurable, approachable, substantial, differentiable and also actionable.<br />