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Market Segmentation
This document discusses various ways to segment consumer and business markets. There are four major types of segmentation: geographic, demographic, psychographic, and behavioral. Geographic segmentation divides markets into geographic units. Demographic segmentation divides markets based on variables like age, gender, income. Psychographic segmentation divides based on psychological factors like personality traits and lifestyle values. Behavioral segmentation divides based on factors like customer benefits sought, brand loyalty, and usage rates. Effective segmentation criteria should be measurable, substantial in size, accessible to target, allow for differentiation of needs, and be actionable for marketing strategies.
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Market Segmentation
- 1. Prof Prashant KumarGupta Jain College Of MBA and MCA
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- 3. Geographic Segmentation Dividing marketsinto geographic units like nation, cities, Case:region, neighbourhood, etc. • Arid regions of Rajasthan and Gujrat , during summers, coolers India because of the variation in Its important in are used because the weather is dry preferences and habits across different regions; rural and • However urban areasbe ineffective in Goa or they may being major segments Kerela because of humid weather, ACs might be preferred here Product penetration, infrastructure, income levels etc. make segmentation more important and complex
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- 5. Psychographic Segmentation Psychographicsis the science of using psychology and demographics to better understand consumers Segmented on the basis of psychological/personality traits, lifestyle or values Values and lifestyles significantly affect the product and brand choices Religion has significant affect Eg: McDonald’s struck off beef from its offerings in India
- 6. Psychographic Segmentation :VALS SRIConsulting Business Intelligence (SRIC-BI) gave this most popular classification system . Based on responses to a questionnaire featuring 4 demographics and 35 attitudinal questions Updated every year with data from 4,000 questionnaires
- 7. VALS :Tendencies of groupswith higher resources Innovators Thinkers • Successful • Sophisticated • High Self Esteem • Purchase upscale and nicheoriented products & services • Mature • Satisfied • Motivated by ideals and value, knowledge • Favour durability, functionality and value in products Achievers Experiencers • Successful and Goaloriented people • Focus on career and family • Favour premium products that demonstrate success to peers • Young • Enthusiastic • Seek variety and excitement • Spend highly on fashion, entertainment and socialising
- 8. VALS :Tendencies of groupswith lower resources Believers • Conservative • Conventional • Traditional • Favour familiar products and are loyal to established brands Strivers • Trendy • Fun Loving • Are resource constrained • Favour stylish products Makers • Practical • Down to Earth • Self sufficient • Favour products with practical or functional purpose Survivors • Elderly people • Passive People • Loyal to favourite brands
- 9. Behavioural Segmentations Divided intogroups based on their knowledge of, attitude towards, use of, or response to a product Decision Roles: Initiator Influencer Decider Buyer User Behavioural Variables: Occasion Benefits User Status Usage Rate Loyalty Stage Attitude
- 10. Behavioural Variables LOYALTY STATUS •Hard Core Loyals: One brand all the time USER STATUS OCCASION Identify strength Can be definedex-users, of time ofusers,week, etc or Classified as in terms potential day, first time • Split Loyals: Loyal to 2-3 brands events in a regular users users or consumer’s life • Find competitive products • Shifting Loyals: Shift from one brand to another USAGE RATE BENEFITS • Find Weakness •• Classified as per benefits consumers seek Light, medium and heavy product users • Switchers: Show no loyalty • •Same product with different in number but have Heavy users might be less benfits like Clinic All significant share in consumption Clear and Sunsilk ATTITUDE Enthusiastic, postive, indifferent and negative
- 11. Segmenting Business Markets Purchasing Approaches Demographic Purchasing-Function Organisation: Centralised or decentralised Industry: Which Industry to serve? purchasing organisations? Company Size: What size companies should be served? Power Structure: Engineering dominated, Finance dominated and Location: What geographical areas to serve? so on…. Nature of existing Operating Variables companies: Serve companies with strong relationship or desirable companies? Technology: What customer technology should be focused? Purchasing criteria: Companies seeking quality or price or service? User Status: Heavy, medium, light users or non-users? Personal Characteristics Situational Factors Buyer-Seller Similarity: Serve those with similar values like us? Urgency: Serve companies which need sudden/quick service? Attitude towards risk: Risk taking or Risk-avoiding firms? Specific Application: Certain or all applications Loyalty: Serve companies which show loyalty to suppliers?
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- 13. Home Work Findwhat is conversion model (Attitude)
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