Market segmentation involves dividing a market into subgroups with similar characteristics that influence demand. The objectives of market segmentation are to identify attractive marketing opportunities, select target markets, determine product mix, select channels, and develop effective marketing programs. The key steps in market segmentation are identifying segments, developing profiles, evaluating segments, selecting targets, and developing positioning and marketing plans. Target marketing focuses marketing efforts on specific segments likely to purchase products and services.

1. A process of dividing the total market for a good
or service into several smaller groups, such that
the members of each group are similar with
respect to the factors that influence demand.

2. Objective of Market segmentation
• Knowledge of attractive marketing
opportunities
• Facilitates selection of target market
• Facilitates determination of product mix
• Selection of suitable channels
• Assessment of strengths and weakness
• Helps in effective marketing program

4. 1. Identification of market segments
2. Development of profiles for each segment
3. Evaluation of market segments
4. Selection of target market
5. Development of positioning strategy
6. Establishment of a marketing plan and
program

5. Levels of market
segmentation
1.MassMarketing

6. 2.ProductvarietyMarketing

7. 3.Target
Marketing

8. 4.Niche
Marketing

9. 5.Customized
Marketing

10. Segmentation Variable for
Consumer Market

11. Operational
Orgn
Purchase
Decision
Geographic
Demographi
c
Segmentation Variable for Industrial Market
Location
Climatic
Condition
Type of business
orgn
Size of business
Technology
Usage rate
Service
requirement
Purchase orgn
Documentation
Time

12. Targeted marketing is the process of
identifying customers and
promoting products and services via
mediums that are likely to reach
those potential customers. Target
Marketing involves breaking a
market into segments and then
concentrating your marketing efforts
on one or a few key segments.

13. Selection of Target Market (Types of Target Market)
• Single-coverage market - covers only one
segment to cover on.
• Limited-coverage market – focuses only on
some segements
• Full-coverage market - company tries to
serve all the customer group

14. Market Segmentation Strategies
• Market aggregation strategy
• Market segregation strategy
• Concentrated marketing or market
concentration strategy
• Multiple segment strategy

15. 1. Segment size and growth
2. Segment structural attractiveness
The five threat analysis for evaluation of the
market segments’ are:
a. Threat of intense segment rivalry
b. Threat of new entrants
c. Threat of substitute products
d. Threat of buying power of customers
e. Threat of bargaining power of suppliers
3. Organizational objectives and resources

16. It involves careful and through analysis of the market
segments that look attractive from the point of view of size,
growth and long-run profit potentials. It involves analysis of
following aspects:
 Estimate of total demand for the product in the segment
 The market share of competitors
 The relative strength of the competitors in relation to
product-service offers, quality, price, customer loyalty,
distribution network, etc.
 The organization’s resources to meet the challenges in
the market segment.
 Possible marketing mix alternatives to be implemented
in the segment

17. 1. Single segment coverage
2. Multi-segment coverage
3. Product specialization
4. Market specialization
5. Full market coverage
6. Niche marketing

19. “An act of designing the company’s offer and image so
that it occupies a distinct and valued place in the target
customer’s mind” –Philip Kothler
Positioning refers to the strategic decisions and actions
intended to create and maintain the firm’s product or
service concept in customer’s mind.

20. Competitive positioning : Presents the firm
image better or superior to competitors brand.
Product class positioning : Presents the product
as against a product class such as margarine
against the butter.

21. 1. Identification of the actual competition
2. Determination of how the competitors are
perceived and evaluated
3. Determination of the competitors’ position in
the market
4. Analysis of the customers’ objective
preferences, tastes, problems, needs, etc.
5. Selection of the best position
6. Monitoring the position