MARKET SEGMENTATION

INTRODUCTION All corporate marketing activities have to be necessarily carried out in such a way that they lead to generation of surplus funds. Organizations that sell to consumers and industrial markets recognize that they cannot appeal to all buyers in those markets or at least not to all buyers in the same way. Buyers are too numerous, too widely scattered and too varied in their needs and buying practices. Different companies vary widely in their abilities to serve different segments of the market.

Product variety marketing MARKETING AREAS Areas of marketing Mass marketing Product variety marketing Target marketing

Target marketing has 3 steps MARKET SEGMENTATION Identify basis for segmenting the market Develop profiles of the resulting segments MARKET TARGETTING Develop measures of segment attractiveness Select the target segments MARKET POSITIONING Develop positioning for each target market segment Develop marketing mix for each target segment

WHY SEGMENTATION??? To develop marketing activities To identify the suitable customers Increase marketing effectiveness Generate greater customer satisfaction To identify strategic opportunities Allocation of marketing budget Adjustment of product to the market need To estimate the level of sales in the market To overcome competition effectively To develop effective marketing programmes To contribute towards achieving organisation goals

MARKET SEGMENTATION According to Philip kotler “Market Segmentation is the process of sub-dividing the customers into homogenous sub-set of customers’’ Segmentation is essentially the identification of subsets of buyers within a market that share similar needs and demonstrate similar buyer behaviour. Segmentation aims to match groups of purchasers with the same set of needs and buyer behaviour. Such a group is known as a 'segment'.

Market segmentation is one of the key elements of modern marketing. The process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics is called Segmentation. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.

BASES FOR SEGMENTING CONSUMER MARKETS There is no single way to segment a market. A marketer has to try different segmentation variables, alone and in combination, to find the best way to view the market structure. Market consists of buyers differing in one or more ways. They may differ in their wants, resources, locations, buying attitudes and buying practices

Market segmentation is the process of dividing the market into several groups and/or segment(s) based on factors such as a)Geographic b)Demographic c)Psychological d)Behavioural factors

GEOGRAPHIC SEGMENTATION Geographic segmentation divides the market into different geographical units such as NATIONS, STATES, REGIONS, COUNTRIES, CITIES or NEIGHBORHOODS. A company may decide to operate in one or a few geographical areas or to operate in all areas but pay attention to geographical differences in needs and wants A company can target one or more areas and must be aware of the fact that data according to geographic segmentation may vary due to population shift.

DEMOGRAPHIC SEGMENTATION Demographic segmentation divides the market into groups based on demographic variables such as AGE, SEX, FAMILY SIZE, FAMILY LIFE CYCLE, INCOME, OCCUPATION, EDUCATION, RELIGION, RACE, GENERATION, SOCIAL CLASS AND NATIONALITY. Demographic factors are the most popular bases for segmenting customer groups.

Demographic variable Products segmented on demographic basis Age Toys Sex Clothing, hair dressing, cosmetics, magazines Family size Soap and detergent powder Income Cars, clothing, travel Occupation Books, news papers, magazines Education Household services, land and immovable property Religion Food, class, gift items

PSYCHOGRAPHIC SEGMENTATION In psychographic segmentation, buyers are divided into different groups based on LIFE STYLE OR MODE OF LIVING OR PERSONALITY CHARACTERISTICS. People in the same demographic group can have very different psychological traits. Psychological profiles are often used as a supplement to geographic and demographics when these does not provide a sufficient view of the customer behaviour.

BEHAVIOURAL SEGMENTATION In behavior segmentation, buyers are divided into groups based on their knowledge, attitude, uses or responses to a product. Many marketers believe that behavior variables are the best starting points for building market segments. Some of the behaviouristic variables which are taken into consideration by the marketers are PURCHASE OCCASION, BENEFITS, USER STATUS, USAGE RATE, LOYALTY STATUS, READINESS STAGE AND ATTITUDE TOWARD PRODUCT.

BASES FOR SEGMENTING INDUSTRIAL MARKETS Industrial markets can be segmented using many of the same variables used in consumer market segmentation. Industrial buyers can be segmented geographically or by benefits sought, user status, user rate, loyalty status, readiness state and attitudes. Other variables which come into play include a) Industrial customer demographics b) Operating characteristics c) Purchasing approaches d) Situational factors e) Personal characteristics

REQUIREMENTS OF EFFECTIVE SEGMENTATION In addition to having different needs, for segments to be practical they should be evaluated against the following criteria MEASURABILITY ACCESSIBILITY SUBSTANTIALITY ACTIONABILITY IDENTIFIABLE UNIQUE NEEDS DURABLE

REFERENCES http://www.buzzle.com/articles/geographic-segmentation.html http://pure.au.dk/portal-asb-student/files/11462/BA.pdf PRINCIPLES OF MANAGEMENT BY PHILIP KOTLER MARKETING MANAGEMENT BY SHERLEKAR

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