• Market segmentation is a marketing
strategy that involves dividing a broad target
market into subsets of consumers who have
Is the process of dividing a totally heterogeneous
market for a product into several segments.
Each segment is a homogeneous market in all the
One or more of those segments is selected as the
organisation targeted market
Finally a separate marketing mix is developed for
Bases for Market
• Geography as a basis
• Psychography as a basis
• Demography as a basis
• Behavioral response as a
Geography as a
• City size
as a Basis
• Social class
Demography as a Basis
• Family Life cycle
Behavioral Response as a
• Usage Rate
• Type of Buying
• User Status
• Loyalty Status
Why use Market Segmentation
• The information will allow more sales to be made
• To gain greater knowledge about customers so that
it can vary the products
• Prevent promoting product to wrong people
• To target particular groups
• A market consists of all those potential
customer who share a particular need or want
and are willing to exchange in the process of
exchange to satisfy that need or want.
Marketing According to
• “the process of marketing deals with working
with the (previously defined ) markets to
actualize potential exchanges for satisfying
human needs and wants.”
• The marketing mix is a set of marketing tools
that work together to achieves company’s
objective in the target market.
• Thus the mixture of various marketing tools is
called the marketing mix
When marketing their
products firms need to create
a successful mix of:
• the right product
• sold at the right price
• in the right place
• Using the most suitable promotion.
• Putting the right product in the right place, at the
right price, at the right time.
To create the right marketing
mix, businesses have to meet
the following conditions:
• The product has to have the right features - for
example, it must look good and work well.
• The price must be right. Consumer will need to buy
in large numbers to produce a healthy profit.
• The goods must be in the right place at the right
time. Making sure that the goods arrive when and
where they are wanted is an important operation.
• The target group needs to be made aware of the
existence and availability of the product through
promotion. Successful promotion helps a firm to
spread costs over a larger output.
Main variables of
Marketing Mix in Service
• Physical evidence
• A product is seen
as an item that
satisfies what a
or wants. It is a
tangible good or
service based like
industry, the hotel
• The price is the
amount a customer
pays for the
• The price is very
important as it
• Represents all of the methods of communication
that a marketer may use to provide information
to different parties about the product.
• Promotion comprises elements such
as: advertising, public relations, personal
selling and sales promotion.
• Advertising covers any communication that is
paid for, from cinema commercials, radio and
Internet advertisements through print media
• Public relations is where the communication
is not directly paid for and includes press
releases, sponsorship deals, exhibitions,
conferences, seminars or trade fairs and
• Word-of-mouth is any apparently informal
communication about the product by
ordinary individuals, satisfied customers or
people specifically engaged to create word of
mouth momentum. Sales staff often plays an
important role in word of mouth and public
• · Where and when can you get across your
marketing messages to your target market?
• · Will you reach your audience by advertising
in the press, or on TV, or radio, or on
billboards? Through PR? On the Internet?
• · When is the best time to promote? Is there
seasonality in the market·
• How do your competitors do their
promotions? And how does that influence
your choice of promotional activity
• Refers to providing the product at a place
which is convenient for consumers to access.
Place is synonymous with distribution.
• Place is the location at which prospective
customers may be induced to purchase a
service-the point of sale(e.g. Travel Agent)
• Where do buyers look for your product or
• · If they look in a store, what kind? A
specialist boutique or in a supermarket, or
both? Or online? Or direct, via a catalogue?
• · How can you access the right distribution
• Do you need to use a sales force? Or attend
trade fairs? Or make online submissions?
• What do your competitors do, and how can
you learn from that and/or differentiate?
Marketing Mix in Service
• The traditional marketing mix model was primarily
directed and useful for tangible products. The 7 Ps
model is more useful for service industries. The
other Ps in Service industry is:
• Physical Evidence
• 'People' refers to the employees of the
organization with whom customers come into
• Recruiting the right staff and training them
appropriately in the delivery of their service is
essential if the organization wants to obtain a
form of competitive advantage. Consumers make
judgments and deliver perceptions of the service
based on the employees they interact with. Staff
should have the appropriate interpersonal skills,
attitude, and service knowledge to provide the
service that consumers are paying for.
• These refer to all human actors who will
participate in the delivery of the service
• This refers to the company employees who
directly and indirectly interact with the
customers. The customers will judge the
company services on the how the employee
dresses and their behavior in front of the
• Services are intangible in nature most service
providers strive to incorporate certain tangible
elements into their offering to enhance customer
• Similarly, restaurants invest heavily in their interior
design and decorations to offer a tangible and
unique experience to their guests.
• This refers to the tangible components needed in
the execution of the service like calling cards,
signage, brochures, equipment’s, and letterheads.
It also refers to the venue where the service will be
executed; an example is the branch office of the
bank or fast food chain. Elements within the
store—the store front, the uniforms employees
wear, signboards, etc
• This is the flow of activities that the company
will follow in the execution of the service.
• This is also the actual procedures or processes
flow used by service companies.
• The Process of giving a service, and behavior
of those who deliver are crucial to customer