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Market segmentation
The document discusses market segmentation, including its definition, bases for segmentation, and criteria for effective targeting of segments. It outlines the importance of understanding consumer needs and tailoring products and advertising strategies accordingly. Various segmentation bases such as geographic, demographic, psychological, and benefit segmentation are explored to help identify and reach target markets.
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Market segmentation
- 1. Consumer Behavior, Ninth Edition Schiffman& Kanuk Market Segmentation Consumer Behavior, Prepared By, Mr. Nishant Agrawal METAS Adventist College (NEHU)
- 2. 3 - 2 Outline •What Is Market Segmentation? • Bases for Segmentation • Criteria for Effective Targeting of Segments • Implementing Segmentation Strategies
- 3. 3 - 3 MarketSegmentation The process of dividing a potential market into different subsets of consumers and selecting one or more segments as a target market to be reach.
- 4. 3 - 4 ThreePhases of Marketing Strategy Phase 2 Target Market Phase 3 Product/Brand Positioning Phase 1 Market Segmentation
- 5. 3 - 5 SegmentationStudies • Discover the needs and wants of groups of consumers to develop specialized products to satisfy group needs • Used to identify the most appropriate media for advertising •
- 6. 3 - 6 DiscussionQuestion • Considering the largest bank in your college’s city or town: – How might consumers’ needs differ? – What types of products might meet their needs? – What advertising media makes sense for the different segments of consumers?
- 7. 3 - 7 Basesfor Segmentation • Geographic • Demographic • Psychological • Psychographic • Sociocultural • Use-Related • Usage-Situation • Benefit Sought
- 8. 3 - 8 MarketSegmentation Occupation SEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED 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 Age Under 12, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+ Single, married, divorced, living together, widowed Under $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,999, $100,000 and over Education Some high school, high school graduate, some college, college graduate, postgraduate Professional, blue-collar, white-collar, agricultural, military
- 9. 3 - 9 Table3.1, continued SEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLES Psychological Segmentation Learning-involvement Perception Personality Needs-motivation Safety, security, affection, sense of self-worth Extroverts, novelty seeker, aggressive, innovators Low-risk, moderate-risk, high-risk Low-involvement, high-involvement Psychographic Subcultures (Race/ethnic) Religion Cultures (Lifestyle) Segmentation Economy-minded outdoors enthusiasts, status seekers American, Italian, Chinese, Mexican, French, Pakistani Catholic, Hindu, Moslem, other African American, Asian Family life cycle Social class Lower, middle, upper Bachelors, young married, full nesters, empty nesters Attitudes Positive attitude, negative attitude Sociocultural Segmentation
- 10. 3 - 10 SEGMENTATIONBASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLES Use-Related Segmentation Brand loyalty Awareness status Usage rate Heavy users, medium users, light users, non users Unaware, aware, interested, enthusiastic None, some, strong Use-Situation Segmentation Location Objective Time Free time, work, rush, morning, night Personal, gift, snack, fun, achievement Home, work, friend’s home, in-store Person Self, family members, friends, boss, peers Benefit Segmentation Convenience, social acceptance, long lasting, economy, value-for-the-money Continue…
- 11. 3 - 11 GeographicSegmentation • The division of A total potential market into smaller subgroups on the basis of geographic variables • Region • State • City
- 12. 3 - 12 DemographicSegmentation • Segmentation according to demography is based on variables such as age, generation, religion, occupation and education level
- 13. 3 - 13 PsychologicalSegmentation • Motivations • Personality • Perceptions • Learning • Attitudes
- 14. 3 - 14 PsychographicSegmentation • Psychographic segmentation which is sometimes called lifestyle is measured by studying the activities, interests, and opinions of customers. It considers how people spend their spare time. • Lifestyle products may pertain to high involvement products and purchase decisions, to speciality or luxury products and purchase decisions.
- 15. 3 - 15 SocioculturalSegmentation • Family Life Cycle • Social Class (Lower , middle and Upper ) • Culture, Subculture
- 16. 3 - 16 FamilyLife Cycle Advertising Video cameras are often purchased by young couples with children.
- 17. 3 - 17 DiscussionQuestions • What types of marketers might segment according to social class? • What ethical issues might marketers have when marketing to different social classes?
- 18. 3 - 18 Use-RelatedSegmentation • Consumers are grouped in different segments based on consumption of certain products and services and usage rate, brand loyalty, adoption of innovative product, time, location, person etc. • The objective of this segmentation is to penetrate in others market. • For example, Coca-Cola and Pepsi target the same customers, it has to be surveyed why consumption of one brand is more than the other.
- 19. 3 - 19 Usage-SituationSegmentation • Segmenting on the basis of special occasions or situations • Example Statements: – When I’m away on business, I try to stay at a suites hotel. – When there is holiday we spend time with family / friends.
- 20. 3 - 20 BenefitSegmentation • Benefit segmentation requires marketers to divide the market based on the perceived benefit of the product or service. • This type of segmentation may be used in clothing, appliance, consumer, cosmetic, and several other industries. • The segmentation of the consumers based on what particular benefit of the product appeals to them. • Different consumers look for different benefits and the marketer needs to understand each segment and accordingly develop his communication for each group.
- 21. 3 - 21 Criteriafor Effective Targeting of Market Segments • Identification • Sufficiency • Stability • Accessibility • Measurable and Obtainable • Relevant • Valid
- 22. 3 - 22 ImplementingSegmentation Strategies • Concentrated Marketing – One segment • Differentiated – Several segments with individual marketing sizes
- 23.
- 24. 3 - 24 Targeting •First you decide which segments to target by finding the most attractive ones. There are several factors to consider here. • First, look at the profitability of each segment. Which customer groups contribute most to your bottom line? • Next, analyze the size and potential growth of each customer group. Is it large enough to be worth addressing? Is steady growth possible? And how does it compare with the other segments?
- 25. 3 - 25 ThankYou