Market Segmentation

Introduction

Market segmentation is basically dividing the market into a group of customers who have similar; 1. Characteristics 2. Behaviors 3. Needs and 4. Can be served with a mix This mix is Product or the Marketing Mix

Market consists of buyers/consumers and they differ in more than one way. They differ in their;
1. Wants 2. Resources

3. Locations
4. Buying attitudes and 5. Buying practices

Market Segmentation
SEGMENTING CONSUMER MARKETS

Introduction

The consumer markets can be segmented on the basis of following; GEOGRAPHIC To divide markets on geographical basis and then to decide if the company needs to operate in all or a few markets or put different resources in different markets depending upon the needs and requirements of: 1. Sales efforts 2. Advertising 3. Sales Promotions 4. Distribution channels and 5. Competition in the region or segment

Market Segmentation
DEMOGRAPHIC Divides markets on the basis of; 1. Age and Life Cycle Stage 2. Gender 3. Family size 4. Family Income 5. Occupation

Introduction

6. Education and
7. Religion etc. PSYCHOGRAPHIC Divides markets based on the basis of: 1. Social Class 2. Life Style and 3. Personality Characteristics etc

Market Segmentation
BEHAVIOR Divides based on; 1. Knowledge 2. Attitudes

Introduction

3. Uses and
4. Response to product etc. OCCASIONS The buyers buy products according to occasions or festivals; 1. New Year 2. Xmas 3. Purchases for marriages 4. Purchases for gifting

5. Some snacks for afternoon / breakfast cereals for morning etc

BENEFITS - sought from a product USER status USAGE rate light, medium or heavy usages

Market Segmentation
SEGMENTING BUSINESS MARKETS DEMOGRAPHICS Type of industries

Introduction

Company size and

Location OPERATING VARIABLES Company technology Product/Brand usage status and Customer capabilities financial, technical, operational, skills PURCHASING HABITS

Types of suppliers and purchasing policies

Relationships between buyers and sellers and Purchasing characteristics of buyers

Market Segmentation
REQUIREMENTS OF EFFECTIVE SEGMENTATION

Introduction

Measurable size & the purchasing power, profiles all must be measurable Substantial adequate number of customers should be there so that it is worth catering to Accessible Differentiable Actionable The results thus obtained should prompt you to take action also e.g. the markets are identified but not enough people are there to take care for the action to be taken based on the study