Market segmentation involves dividing a heterogeneous market into homogeneous subgroups based on characteristics like geographic location, demographics, psychographics, and behaviors. Effective segmentation provides benefits like identifying market potential and adjusting resources profitably for each subgroup without losing the overall market. Key requirements for segmentation include measurability, accessibility, and substantiality of the identified subgroups. Common variables used in segmentation are geographic, demographic, psychographic (lifestyle and personality), and behavioral (benefits sought, usage rates, loyalty). The segmentation process involves assessing differences between customer groups, identifying factors to disaggregate customers, analyzing marketing program possibilities for each subgroup, selecting the most beneficial segments, and estimating purchase levels.

1. ME 368 MARKETING MANAGEMENT

2. Market Segmentation
(MODULE 3- PART 1)

3. Market
• Market consist of buyers and sellers
• Meet each other with particular goods and
services
• Buyers differ based on
– Wants
– Purchasing power
– Geographical locations
– Buying attitudes
– Buying practices

4. Market Segmentation
• Complex buyer behavior is the root cause
Definition:
“Taking the heterogeneous market as
total for a product and dividing it into
several sub markets or segments each
of which will be homogeneous”
• Method for achieving maximum response from
limited market resources
• Its essence is to identify the consumer demand

5. Benefits of segmentation
• Able to find out market potentialities of the
product
• Can adjust resources in a profitable manner
based on the result from segmentation
• Changes can be implemented without loosing
market
• Able to identify the promotional devices
• Able to determine the introduction of new
product

6. Requirements for effective segmentation
Measurability
Accessibility
Substantiality

7. Segmentation Variables
• Geographic Segmentation
• Demographic Segmentation
• Psychographic Segmentation
– Lifestyle
– Personality
• Behavioral Segmentation
– Benefit sought
– User status
– Usage rate
– Loyalty status

9. Steps involved in segmentation process
• Assess difference between customer group and
others
• Factors to identify appropriate consumers in
each segments
• Disaggregating the customers
• Analyzing the possibilities of marketing
programmes and mixes for each segments
• Finding benefited segments
• Estimate purchase level of each segments
• Select segment which offer higher potential