MGT-519 STRATEGIC MARKETING AAMER SIDDIQI 1

LECTURE 12 2

R E - CAP Introduction to STP STP Model Definition of Segmentation 3 Approaches to Marketing in STP 3

Following are the common kinds of variables for segmentation Geographic variables refer to location Include region of the world, continent or country, East/West/North/South/Central/Coastal/Upland Country size, area size & type Urban, rural, semi-urban, town, village, city and Importantly climate, Hot, Cold, Humid, Arid, Rainy V ARIABLES F OR S EGMENTATION 4

Demographic variables Refer to personal statistics – Income – Age – Gender – Education – Occupation – Ethnicity – Religion – Nationality/race – Language and – Family size V ARIABLES F OR S EGMENTATION (C ONT ’ D ) 5

Psychographic variables Take this a step farther – Segment on – lifestyle – attitudes – personality – values V ARIABLES F OR S EGMENTATION (C ONT ’ D ) 6

Behaviour is another basis for segmentation. Some consumers are “brand loyal”, Tend to stick with their preferred brands even when a competing one is on sale. Some consumers are “heavy” users while others are “light” users; classic examples for this are smoking and soft drinks – Buying status – Buying role V ARIABLES F OR S EGMENTATION (C ONT ’ D ) 7

Segmentation by usage occasion Similar to behaviour but focuses on when the product is used, e.g. Wedding dresses Segmentation on benefits sought, Special form of behavioural segmentation Essentially bypassing demographic explanatory variables, e.g. soap powder on better whitening, or non-run of colours V ARIABLES F OR S EGMENTATION (C ONT ’ D ) 8

E FFECTIVE S EGMENTATION Effective segmentation is achieved when customers sharing similar patterns of demand are grouped together and Each group or segment differs in the pattern of demand from other segments in the market Theoretically, the base(s) used for segmentation should lead to segments that are: 1. Measurable/identifiable 2. Accessible 3. Meaningful 9

M EASURABLE / IDENTIFIABLE Should lead to ease of identification in terms of who is in each segment Measurement in terms of the potential customers in each segment E FFECTIVE S EGMENTATION (C ONT ’ D ) 10

A CCESSIBLE The base used should ideally – lead the company being able to reach selected market targets with their individual marketing efforts E FFECTIVE S EGMENTATION (C ONT ’ D ) 11

M EANINGFUL Must lead to segments which have different preferences or needs Show clear variations in market behaviour and Response to individually designed marketing mixes E FFECTIVE S EGMENTATION (C ONT ’ D ) 12

S UBSTANTIAL The base(s) used should lead to segments which are sufficiently large – to be economical and – practically worthwhile Serving as discrete market targets with a distinctive marketing mix. E FFECTIVE S EGMENTATION (C ONT ’ D ) 13

S UMMARY Introduction to STP STP Model Definition of Segmentation 3 Approaches to Marketing in STP Variables For Segmentation Effective Segmentation 14

THANKYOU 15