Market segmentation involves dividing a market into distinct groups based on characteristics like geography, demographics, psychographics, and behaviors. The key benefits are identifying new product opportunities, designing effective marketing programs for homogeneous groups, and improving resource allocation. Segments must be identifiable, accessible, respond uniquely to offerings, be large enough to target, and relatively stable over time. Common bases for segmentation include geographic variables, demographics like age and income, psychographic lifestyle assessments, and behavioral factors.

1. Market
Segmentation
Principles of Marketing

2. THE BREAKING DOWN OR BUILDING UP OF
POTENTIAL BUYERSINTO GROUPS CALLED
MARKETSEGMENTS
What is Market Segmentation?

3. Benefits of
Market Segmentation
Identifies opportunities for new product development
Helps design marketing programs most effective
for reaching homogenous groups of buyers
I
mproves allocation of marketing resources

4. The need for marketing
segmentation
▶ The marketing concept calls for understanding customer
and satisfying there needs better than the competition.
▶ Different customers have different needs, and its rarely
possible to satisfy all the customers by treating them
alike.

5. Difference between a mass market
and target market
▶ Mass market refers to treatment of the market as a
homogenous group and offering the same marketing
mix to all customers.

6. Difference between a mass market
and target market
▶ T
arget market on the other hand recognizes the diversity
of the customers and does not try to please all of them
with the same offering.

7. Requirements of market segments
▶ I
ndefinable: the differentiating attributes of the segments
must be measurable so they can be identified.
▶ Accessible: the segments must be reachable through
communication and distribution channels.

8. Requirements of market segments
▶ Unique needs: to justify separate offerings, the segments
must respond differently to different marketing mixes.
▶ Substantial: the segments should be sufficiently large to
justify the resources required to target them.

9. Requirements of market segments
▶ Durable: the segments should be relatively stable to
minimize the cost of frequent changes.

10. Bases for segmentation in
consumer markets
Geographic
Demographic
Psychographic
Behavioralistic

11. Geographic segmentation
Geographic segmentation tries to divide
markets into different geographical units:
▶ Regions
▶ Size of the area
▶ Population density
▶ Climate

12. Geographic segmentation
▶ Regions: by continent, country, state or
even neighborhood
▶ Size of the area: segmented according
to size of population

13. Geographic segmentation
▶ Population density: often classified as
urban, suburban, or rural
▶ Climate: according to weather patterns
common to certain geographic regions

14. Demographic segmentation
Demographic segmentation consists of dividing the market into groups
based on variables such as:
• Age
• Gender
• Income
• Social class
• Life style

15. ▶ Age :Marketers design, package and promote products differently
to meet the wants of different age groups.
Good examples include the marketing of toothpaste (contrast the
branding of toothpaste for children and adults) and toys (with many
age-based segments).
Demographic segmentation

16. ▶ Gender: Gender segmentation is widely used in consumer
marketing.
The best examples include clothing, hairdressing, magazines and
toiletries and cosmetics.
Demographic segmentation

17. Demographic segmentation
▶ Income: Many companies target affluent consumers with luxury
goods and convenience services.
Good examples include Coutts bank; Moet & Chandon champagne
and Elegant Resorts- an up-market travel company.

18. Demographic segmentation
▶ Social class:Consumers "perceived" social class
influences their preferences for cars, clothes, home
furnishings, leisure activities and otherproducts&
services.

19. Demographic segmentation
▶ Lifestyle:Marketers are increasingly interested in the effect of
consumer "lifestyles" on demand. Unfortunately, there are many
different lifestyle categorization systems, many of them designed by
advertising and marketing agencies as a way of winning new
marketing clientsand campaigns.

20. Psychographic segmentation
Psychographic segmentation groups customers according
to their lifestyle. Activities, interest, and opinions (AIO)
surveys are one tool for measuring lifestyle.
▶ Activities
▶ Interest
▶ Opinion
▶ Values

21. Behavioralistic segmentation
Behavioralistic segmentation is based on actual customer
behavior towards products. Some behavioralistic variable
include:
▶ Opinions, interests and hobbies
▶ Degree of loyalty
▶ Occasions
▶ Benefits sought
▶ Usage

22. ▶ Opinions, interests and hobbies –this covers a huge area
and includes consumers’ political opinions, views on the
environment, sporting and recreational activities and
arts and cultural issues.
Behavioralistic segmentation

23. ▶ Degree of loyalty –customers who buy one
brand either all or most of the time are
valuable to firms.
Behavioralistic segmentation

24. ▶ Occasions –thissegmentson the basis
of when a product ispurchased or
consumed.
Behavioralistic segmentation

25. ▶ Benefits sought –this requires marketers to identify and
understand the main benefits consumers look for in a
product.
▶ Usage –some markets can be segmented into light,
medium and heavy user groups.
Behavioralistic segmentation