different basis of segmenting a market

1. Market SegMentation
By
Suresh T S
I PG M.Com

2. Segmentation
Segmentation refers to a process of bifurcating
or dividing a large unit into various small units
which have more or less similar or related
characteristics
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3. Market Segmentation
• Market segmentation is a marketing concept which divides the
complete market set up into smaller subsets comprising of
consumers with a similar taste, demand and preference.
• A market segment is a small unit within a large market comprising
of like minded individuals.
• One market segment is totally distinct from the other segment.
• A market segment comprises of individuals who think on the same
lines and have similar interests.
• The individuals from the same segment respond in a similar way to
the
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4. Concept
The concept of market segment is based on the fact that
the market of commodities are not homogeneous but
they are heterogeneous. Market represent a group of
customer having common characteristics but two
customer are never common in their nature, habits,
hobbies income and purchasing techniques
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5. Why segment?
• Starts from the premise that all buyers are not the
same: profit/volume potential, motivations, product
uses, needs and desires, etc.
• Segmentation allows you to chose which buyers to
target and provides important insights as to how to
appeal to them.
• Significant competitive advantage
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6. Meaning
Market Segmentation is a method of “dividing a
market (Large) into smaller groupings of
consumers or organisations in which each
segment has a common characteristic such as
needs or behaviour.”
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7. Definition of Market Segmentation
According to Philip kotler ,
“ Market segmentation is sub-dividing a market into distinct and
homogeneous subgroups of customers, where any group can
conceivably be selected as a target market to be met with distinct
marketing mix.”
According to American Marketing Association (AMA)
“Market segmentation refers to dividing the heterogeneous
markets into smaller customer divisions having certain
homogeneous characteristics that can be satisfied.”
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8. Levels of Market Segmentation
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9. Mass Marketing
• In simple words seller offer same product for all the buyers
with different needs and seller engages in the mass production,
mass distribution, and mass promotion of one product for all
buyers.
• Promotes the concept
“One Size Fits All”
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10. Segment Marketing
• Companies that are segmenting markets realize the diversity of
the needs, perceptions, and buyer behavior between the
customers
• So that they match the needs of the customer’s more
efficiently, improve and promote products for a distinct
segment of the market
• A good segmenting approach will eliminate the competitors
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11. Niche Marketing
• Niche Marketers focus on the subgroups within the segments
of the market, seeking to find customers with a distinctive set
of traits looking for the same combination of benefits
• A niche is a more narrowly defined customer group seeking a
distinctive mix of benefits . for ex:- auto insurance for risky
drivers – high premium , high price coverage etc .
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12. Micro Marketing
• A form of target marketing in which companies fit their
marketing mixes to specific needs and wants of narrowly
defined geographic, demographic, psychographic or
behavioral segments
• products are specialized to meet a very specific need of
potential customers and marketed primarily to that customer
set. For example, a computer company might sell highly
specialized and individualized computers to customers who
configure the systems themselves.
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13. STP as Business Strategy
Segmentation
•Identify segmentation bases and segment the market.
•Develop profiles of resulting segments.
Targeting
•Evaluate attractiveness of each segment.
•Select target segments.
Positioning
•Identify possible positioning concepts for each target segment.
•Select, develop, and communicate the chosen concept.
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14. Process / Steps in Market
Segmentation
1. Identification of a market (Defining Market)
2. Identification of the market needs
3. Division/ Segmentation of the market (Segmenting stage)
4. Study of the different market segments (Segmenting stage)
5. Selection of a particular market segment (Targeting Stage)
6. Formulation and Implementation of marketing strategies
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16. 5 Criteria for Effective Market Segmentation
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1. Measurable :- Size, purchasing power etc
2. Substantial :- large & profitable enough to serve .
3. Accessible :- can be effectively reached & served
4. Differentiable :- respond differently then only
segments will be distinguished .
5. Actionable :- effective prgm’s can be formulated to
attract & serve the segments .

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