Market Segmentation

1. Market Segmentation and Targeting
Chandan Singh
Dr. RPCAU, Pusa

2. Content
• What is segmentation?
• Criteria for effective segmentation
• Importance of segmentation
• Level of segmentation
• Basis of market segmentation
• Targeting
• Targeting strategy

3. What is segmentation
• Market segmentation involves grouping your various customers into
segments that have common needs or will respond similarly to a
marketing action.
• A market segment is a subgroup of people or organizations that have
one or more characteristics in common that cause them to have the
same product needs.
• Everyone needs water to drink, but does everyone need bottled water?

4. Measurable Some form of data should be available to measure the size of
the market segment
Substantial The market segment should be large enough, in terms of
sales and profitability, to warrant the firm’s possible
attention
Accessible The market segment should be reachable, particularly in
terms of distribution and communication
Actionable/practical The firm needs to be able to implement a distinctive
marketing mix for each market segment
Responsive Each market segment should respond better to a distinct
marketing mix, rather than a generic offering
Stable so that its behavior in the future can be predicted with a
sufficient degree of confidence.
Criteria for effective segmentation

5. Target markets the main reason is to help identify potential target markets
Market
understanding
helps managers to have a greater understanding of the marketplace, as they gain
knowledge of differing consumer needs within the same market
Marketing mix It is then easier to develop a marketing mix based upon the needs of a precise market
Competitive position It can be easier to compete against existing firms by focusing upon a smaller, more
defined, group of consumers
New opportunities Creative approaches to market segmentation may generate new opportunities
Avoid mass-
marketing
In today’s environment, it is generally quite difficult to be successful as a mass-
marketer
More offerings Firms are better able to position multiple products in the same overall market by
defining and understanding multiple segments
Niche marketing Some firms find success as niche marketers and this specialized approach becomes
their basis of their competition advantage
Importance of market segmentation

6. Level of segmentation
• Segments: a large identifiable group within the market
:
• Niches: It is more narrowly defined group typically a small market which
attract only a few customer.
Ex: seed production – vegetable seeds – brinjal seeds
flower production - ornamental flower - cut flower – rose

7. • Local marketing: it is related to the need and wants of local customer.
the product may be promoted by developing an understanding of the place
where the potential buyers congregate mostly and prefer to buy the product.
Like: weekly hats or shandies, occasional mela ,nearest town or mobile van
• Individual marketing: This is the ultimate level of segmentation its
also known as one to one marketing.

8. Basis of market segmentation
Demographic segmentationDemographic segmentation
• Age: under 6,6-11, 12-19 , 20 -34, 50-60 , above 60
Ex:mik powder ,chocolate, fruit juices, kurkure, maggi ,potato chips drinks
• Gender: male and female
• Education : metric , graduate ,post graduate (internet marketing )
• Religion : Muslim , Hindu Christian ,other ( vegetarian non vegetarian)

10. • Occupation
• Family size: young , single, married no children , married with children
• Income:
Above rs 100000
Rs 75000-100000
Rs 50000-75000
Rs 25000-50000
Rs 25000 below
Farmer Seed, fertilizer, harvester, tractor ,
pesticide, pump set
Employee Pen, stationary item
Doctor BP kit, medicines, syringes
Animal husbandry Feed ,medicine ,consultancy

11. • Feeds production Company analyzes the profits, revenue and market size of
each of its segments. Segment A (cattle) has profits of $500000 Segment
B(fish farming) has profits of $350000 and Segment C(poultry) has profits of
$200000. So, it decides to focus on Segment A, after confirming that the
segment size is big enough and it's estimated to be worth $500000/year.)

12. Geographic segmentaion
• Region: south , east , north, west
• City: class 1 , class 2 , metros, cities with 1<>1 million population
• Rural and urban: rural villages ,urban , semi urban and small town
National market: it is a market which cover a whole nation or country
Ex: india
International :may divide on the basis of continent or countries.
china , Nepal ,Japan

14. Paddy harvester

15. Basis of market segmentation
Behavioral segmentationBehavioral segmentation
User status: non-users, ex-users, potential users, first-time users and regular
users.
Loyalty status
1.Hard-core loyal -consumer who buy only one brand all the time (nestle)
2.Split loyal -consumer who are loyal to two are three brands
(bayer,syngenta,monsanto)
3.Shfting loyal-consumer who shift loyalty from one brand to another
4.swither-consumer who show no loyalty to any brand (poor or local consumer)

16. • Benefit: quality, service, economy, speed
• Usage rate: light , medium, heavy
• Occasions:
• Attitude: negative and hostile attitude of customer chang e through
provide different benefits
Ex: Agro machinery (durability ,installment ,extra function)
Religion Occasion/events Product
Christian
Muslim
Hindu
Good Friday, Easter ,Christmas
Id-ul-fitr,bakri eid,muharram,ramadan
Deepavali,holi ,vinayaka .chaturthi
Flower, chocolate ,flowers
Sweets, pickle,meat , dry fruits
Milk , sweets , flowers,curd

17. Behaviour of consumer is a better guide to segment the market.
• When do people buy? Occasion
• Why do people buy? Benefits sought
• do the people buy?once?more? User status
• How much do the buy? Usage rate
• Do the repeat the buy? Loyalty status
• Why do the buy? Place ,retail outlet
• What do the buy ? Product possessed

18. Psychographic segmentation
Life style: culture oriented, sports oriented, outdoor oriented
Personality: compulsive, gregarious, authoritarian ,ambitious
Beef is avoided in the menu of McDonald’s he introduce the
vegetarian burger such as Mc veggie burger and Mc aloo tikki
burger.
Halal meat is meat that is seen as permissible according to
Islamic law .imported meat to Muslim country should have a
certificate of Islamic org halal.
Many hotel serve both jhatka and halal for Hindu and Sikhs

19. Targeting
• Targeting involves evaluating the various segment and selecting how
many and which one to target .
• Organization have three alternative strategy to suit their segmentation
approach
Segmentation Type of
marketing
strategy
Zero mass Undifferentiated
Substantial Segment differentiated
Selective Niches Concentrated

20. Target Marketing Strategies
Differentiated
differentiated market strategy used i to focus on two or more well defined
market segments and want to develop different strategies for them.
S.No Product Type Segmentation
1 Tractor 25-30 HP Marginal or
small farmer
50 HP Large farmer
2 Oil 1 kg poor
2 kg Medium
5 kg High income

21. Target Marketing Strategies
Undifferentiated
This approach views the market as one group with
no individual segments. select one single product
offer for all segments.
Example: food grain , bean, urea

22. Target Marketing Strategies
Concentrated
• focusing on a single segment so you can
concentrate on understanding the needs and wants
of that particular market intimately.
Ex: potato cultivator and harvester