segmentation variables for retail stores

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in retail market segmentation values, behavioral variables have more importance.

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segmentation variables for retail stores

  1. 1. Retail Marketing Segmentation - N. Mohammed Nizar
  2. 2. <ul><li>A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods and services tat can satisfy these needs </li></ul>Mass Marketing Segmentation Marketer
  3. 3. Market Segmentation <ul><li>The process of dividing the heterogeneous </li></ul><ul><li>Total market into small group of customers who share similar set of wants </li></ul><ul><li>Ex. Women </li></ul><ul><li>Working Housewife </li></ul><ul><li>Different groups have different promotional strategies and mkg mixes because they have diff. wants and needs </li></ul>
  4. 4. Sub-segments <ul><li>Women </li></ul><ul><li>Working Housewife </li></ul><ul><li>Children No Children </li></ul><ul><li>Segmentation helps the retailer to customize the product and tailor its promotional campaigns </li></ul>
  5. 5. Stages in Segmentation <ul><li>Targeting </li></ul><ul><li>Decide on targeting </li></ul><ul><li>Identify which </li></ul><ul><li>segments will be </li></ul><ul><li>Targeted </li></ul><ul><li>3. How many segment </li></ul><ul><li>should be targeted </li></ul><ul><li>Positioning </li></ul><ul><li>Understanding the </li></ul><ul><li>target segment </li></ul><ul><li>2. place offering in the </li></ul><ul><li>mind of the target </li></ul><ul><li>segment </li></ul><ul><li>3. Evolve mkting mix </li></ul><ul><li>Segmentation </li></ul><ul><li>Choose variable for </li></ul><ul><li>segmentation market </li></ul><ul><li>2. State a profile of </li></ul><ul><li>Segment </li></ul><ul><li>3. Verify prospective </li></ul><ul><li>segment </li></ul>
  6. 6. Benefits <ul><li>Development of Marketing Mix </li></ul><ul><li>Store location decisions </li></ul><ul><li>Understand customer behavior </li></ul><ul><li>Merchandising decision </li></ul><ul><li>Promotional campaigns </li></ul><ul><li>Positioning </li></ul>
  7. 7. Criteria for effective segmentation <ul><li>Homogeneous within </li></ul><ul><li>Heterogeneous between </li></ul><ul><li>Substantial </li></ul><ul><li>- should be large enough </li></ul><ul><li>Actionable </li></ul><ul><li>Accessible </li></ul><ul><li>Measurable </li></ul>
  8. 8. Dimensions for Segmentation <ul><li>Geographic </li></ul><ul><li>Demographic </li></ul><ul><li>Psychographic </li></ul><ul><li>Behavioral </li></ul>
  9. 9. SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Geographic Segmentation Climate Density of area City Size Region Southwest, Mountain States, Alaska, Hawaii Major metropolitan areas, small cities, towns Urban, suburban, exurban, rural Temperate, hot, humid, rainy Demographic Segmentation Income Marital status Sex Age Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+ Male, female Single, married, divorced, living together, widowed Under $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,000, $100,000 and over Occupation Education Some high school, high school graduate, some college, college graduate, postgraduate Professional, blue-collar, white-collar, agricultural, military
  10. 10. SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Psychological Segmentation Learning-involvement Perception Personality Needs-motivation Shelter, safety, security, affection, sense of self-worth Extroverts, novelty seeker, aggressives, low dogmatics Low-risk, moderate-risk, high-risk Low-involvement, high-involvement Psychographic Subcultures (Race/ethnic) Religion Cultures (Lifestyle) Segmentation Economy-minded, couch potatoes outdoors enthusiasts status seekers American, Italian, Chinese, Mexican, French, Pakistani Catholic, Protestant, Jewish, Moslem, other African-American, Caucasian, Asian, Hispanic Family life cycle Social class Lower, middle, upper Bachelors, young married, full nesters, empty nesters Attitudes Positive attitude, negative attitude Sociocultural Segmentation
  11. 11. Values <ul><li>Refers to belief system </li></ul><ul><li>ex. Benetton targeted customers who value protection of environment, it encourages recyclable packaging and refill services </li></ul><ul><li>Cultural values </li></ul>
  12. 12. VALS <ul><li>Begins with people instead of products </li></ul><ul><li>Classifies people by their unique style of living </li></ul><ul><li>It then determines how marketing factors fit into their lives </li></ul><ul><li>- The self-driven materialists </li></ul><ul><li>- the independent Explorer </li></ul><ul><li>- The Passive traditionalist </li></ul><ul><li>- The enthusiastic experiments </li></ul><ul><li>- The mature Sensible </li></ul>
  13. 13. Behavioral <ul><li>Reason/ occasion for purchase </li></ul><ul><li>Frequency of purchase </li></ul><ul><li>Quantity of purchase </li></ul><ul><li>Product usage </li></ul><ul><li>Loyalty status </li></ul><ul><li>Buyers readiness stage </li></ul><ul><li>Source of purchase </li></ul>
  14. 14. Market Targeting <ul><li>Choosing the segment </li></ul><ul><li>Measure the attractiveness and its capacity to serve in the segment </li></ul><ul><li>Factors </li></ul><ul><li>Size of the segment </li></ul><ul><li>Purchasing power </li></ul><ul><li>Growth rate </li></ul><ul><li>Presence of competition </li></ul><ul><li>profitability </li></ul>
  15. 15. Customer Profile <ul><li>Profiles help the retailer in understanding the needs of the target segments and its shopping behavior </li></ul><ul><li>Customer demographics </li></ul><ul><li>Family decision making </li></ul><ul><li>Psychographics </li></ul><ul><li>Purchsing behavior </li></ul><ul><li>Motivation for purchase </li></ul><ul><li>Purchasing process </li></ul><ul><li>Time utility </li></ul><ul><li>Space utility </li></ul>

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