Requirements of segmentation. Before an organisation can target a specific segment accurately it must ask itself a number of questions.

It is important to evaluate the effectiveness of a targeting strategy and the viability of the segment, if this is not done then money will be wasted. The market which is segmented must meet the following criteria: Measurability of segment: Can you measure the size and growth of the segment. Is the segment growing? In India the DVD market is growing at an extremely fast pace. The fast growth rate is attracting many players within the market. Accessibility of segment: Is it easy for you to target and reach your segment? Can they be reached with basic communication tools such as radio and TV advertising? If you cannot target your segment effectively with marketing communication then it is not viable. Suitability of segment: Is there enough spending power within the segment for the company to sustain itself.? Will spending within the DVD market continue? Actionability of segment: Does the organisation have enough resources to reach their segments?. It is no point in targeting segments you do not have the resources to cater for. If you were a car manufacturer the organisation would not concentrate on the affluent and price sensitive market if they did not have the resources to do so.

Market Segmentation

An organisation cannot satisfy the needs and wants of all consumers. To do so may result in a massive drain in company resources. Segmentation is simply the process of dividing a particular market into sections, which display similar characteristics or behaviour. Each market segment must have some unique need, characteristic or behaviour that would make it respond differently to a given marketing mix. Segments need to be sustainable, identifiable and measurable, accessible and responsive There are a number of segmentation variables that allow an organisation to divide their market into homogenous groups. These variables are: Geographic Segmentation Geography There are two reasons why people who live in the same area may share similar characteristics. First, some areas have more expensive properties than others and so people with similar socioeconomic characteristics may cluster together. Second, they have similar transport and shopping options. It is easy to reach particular areas by using local newspapers, cinema, outdoor, and selective direct mail but mass media is less effective. Geographic descriptors for segmenting the market include:

Region or area servedglobal, national, state, district, suburb etc. City sizeBig cities&Towns etc. Density geographic concentrationurban, rural, suburban, etc. Climate hot, cold, tropical etc.

Region or area. Smaller firms are more likely to define a local, smaller geographic region as their target market. For example, local

restaurants serving the local residential area of about a 23 km radius . Conversely, larger firms such as Coca-Cola and McDonalds operate on a global scale.
City size. Some firms prefer to establish outlets in larger cities, for example, department stores such as

EBONY,SHOPPERS STOP,LIFESTYLE would only establish retail outlets in larger cities. Whereas, other companies operate in smaller towns such as VISHAL MEGAMART.
Density. Many firms are interested in establishing outlets in

urban areas with denser populations where there is significant demand for fast food like PIZZA HUT. Some products may be more popular in rural regions, such as Mahindra &Escort tractors.

Climate. Some products have higher demand in cooler regions. For example, skiing

equipment, woollen under blankets, thermal underwear etc.

Conversely, other products are more suited to warmer climates, for example air-conditioning, swimwear,

frozen treats etc.

Demographic Segmentation Demographics originates from the word demography which means a study of population. The population can be divided into age, gender, income, and family lifecycle amongst other variables. As people age their needs and wants change, some organisations develop specific products aimed at particular age groups for example nappies for babies, toys for

children, clothes for teenagers and so on.

Gender segmentation is commonly used within the cosmetics, clothing and magazine industry. In the UK we have also seen the introduction of Maxim,

(www.maxim-magazine.co.uk) a male lifestyle magazine covering male fashion, films, cars, sports and technology.
(For example, let's consider a product such as perfume In assessing the demographic bases for segmentation, descriptors such as gender, age, and income

would be relevant. These descriptors are relevant

because males and females, as well as people of different ages, would most likely require different fragrances, packaging, and promotional messages.
Also, income would be relevant for perfume because it impacts on affordability. Not everyone can afford, or is willing to pay for, a luxury fragrance. You could argue that demographic descriptors, such as religion or nationality are irrelevant for a product such as perfume. Conversely, you could argue that

certain religions prohibit the use of fragrances, and that nationality is linked to culture which, in turn, influence tastes and preferences.
Other demographic descriptors include: educational level, occupation and religion. Educational level: Educated people are more likely to demand Diet foods. Occupation: Tractors are more likely to have a demand in areas where main occupation of people is agriculture. Religion: Macdonald will not sell beef in India.

Demographic descriptors are popular for segmentation purposes as they are the easiest to measure. For example, a good deal of demographic data on the Indian market can be accessed through different websites. Moreover, demographic segmentation can be quite useful as needs and wants do tend to differ across different demographic groups.

Warning: demographic segmentation can be misleading

Using a single demographic descriptor, such as age and/or gender is isolation can be misleading. For example, a 21 year old female could be a full-time student, a professional career woman, a skilled labourer, unemployed, or a mother with small children, etc. Depending upon their circumstance, they would have quite different needs and wants. Therefore, a multivariate segmentation approach based on a mixture of descriptors such as gender, age and family life-cycle (age and lifecycle segmentation) would be far more useful for segmenting the market for most products. Some products that were traditionally targeted at the female market, such as perfume and skincare products are now making inroads into the male market. Skincare for men is a rapidly growing market.

Although demographic segmentation is useful, marketers can use alternative segmentation variables which aim to develop more accurate profiles of their target segments

Psychographic segmentation involves segmenting the market '...on the basis of personality, motives, lifestyles and geo-demographics' Psychographic variables include:

personality motives lifestyle geo-demographics

Personality

A person's personality reflects their '...traits, attitudes and habits' Personality also impacts upon what people buy. For example, outgoing, gregarious people may buy

products that gain attention, such as a bright yellow sports car. Whereas, more conservative people would probably prefer a more practical car that receives less attention. A person's
personality is reflected in the products and brands they buy, as well as the type of retail outlets they prefer. A person who owns BULLET MOTORCYCLE associates this product with a tough macho man personality. Often marketers try to develop personalities for their brands and products that mimic that of their target market. Ask yourself

if Nike or Levis was a person, what type of person would they be?

Motives A motive is defined as the '...driving force that causes a person to take action to satisfy specific needs' Markets can be segmented on the basis of people's motives for wanting a particular product. Three broad areas of motives include emotional motives, rational motives, and status-related motives. For example, JOHNSON&JOHNSONS fulfils

mothers needs when it shows soft and cute babies in its advertising .Mercedes Benz

appeals to status needs when they use slogans such as 'Reward Yourself' or 'Why Wait'.

Lifestyle People purchase products that are in keeping with their lifestyle. For example, people with a healthy

lifestyle may purchase more organic food products and gym memberships. Whereas, adventurous outdoor types may purchase more recreational and sporting products like tracking equipment.
A person's lifestyle comprises what a person does (activities), what they are interested in (interests), and what they think (opinions) 'lifestyle segmentation divides people into groups according to:

the way they spend their time the importance of the things around them their beliefs and socio-economic characteristics such as income and education'.

socio-economic status may always take freshly squeezed sugar cane juice from High-end Malls. Conversely, people with a lower socioeconomic status may only be able to afford buying it from a roadside vendor. Wealthy people
who are concerned about their image may prefer to purchase prestige products that reflect their social status like Carlton shoes, Rolex watches, lacoste t-

Socio-economic status influences the types of products and brands that people buy, how often they purchase, and where they purchase. For example, people with a higher

shirt, Gucci, Louis Vitton, Coach, Prada bag. .

For example now a days as Indian economy is booming the Metro Cities are increasingly employing young independent staff on very high salaries. They are young upwardly mobile professionals, associated with mobile phones, money, expensive cars, and prestigious city jobs.

Geo-demographic Geo-demographic segmentation involves 'segmenting potential customers into neighbourhood lifestyle categories' This type of segmentation combines geographic, demographic and lifestyle factors to arrive at segments that share similar needs and wants

BENEFIT SEGMENTATION Marketing is about finding out what people need and want and then developing a product offering (product, price, placement, promotion) that satisfies those needs and wants. Therefore, segmenting a market on the benefits that people are seeking from the product makes a lot of sense. Consider the market for cars. What are the main benefits that people are seeking from owning a car? For some, economy is the key issue, whereas for others safety, power, comfort, or status may be more important benefits.

Some people are price sensitive, others seek quality or service. Some people are brand loyal, while
others frequently switch brands. It is possible to group consumers on the basis of these factors. Note that price/quality sensitivity can vary by category. Some

people are very concerned about the quality of the food they eat but will buy cheap laundry detergent. Others will feed themselves any rubbish but are fastidious about cleanliness.
This is a very powerful basis for segmentation but it is not easy to buy media on this basis. These segments can be reached by the message (self-selection) but this is not necessarily cost effective.

USAGE Usage rate segmentation involves 'dividing a market by the amount of product bought or consumed' Usage rate can be irregular (light), medium, or heavy, while user status for a product can range from regular user, first-time user, potential user, former-user, or non-user. Under the 80/20 principle, marketers prefer to focus more of their attention on heavy and regular users, however they are also interested in attracting non-users. Consider the marketing of beer. The focus of advertising for full

strength beer is on heavy drinkers. However newer products, for example light beers and premium beers are targeted at non-traditional markets, such as younger people and females.
Other bases for segmentation that are not addressed specifically in the text include:

purchase occasion loyalty status

buyer readiness stage attitude toward the product.

Purchase occasion Occasion is another variable. When should a product be purchased? The demand for turkeys increases

during Christmas, flowers and chocolates on mothers day and so on. Occasion
segmentation aims to increase the reason to buy factor and thus increase sales. different activities and occasions demand different clothes: Leisure = The least formal. Includes all athletic-wear and shorts. Jeans are usually leisure, and

always worn with athletic shoes, message t-shirts, and sweatshirts (including polar fleece).
Casual = Nicer, but still fairly relaxed.Lunch with

your boss, or your friends,parents requires casual clothing.

Business = Formal business clothing is mostly suits and "jacket outfits", sometimes tailored skirts or dresses. t Social = Clothing for social occasions includes floral

dresses such as those worn by wedding

guests, cocktail dresses, and ball gowns.

Markets can be segmented on the basis of when and why people buy. For example, consider the purchase of wine. People may purchase wine for a range of reasons and those reasons will influence what they buy (variety, brand, price), where they buy (outlet), and when they buy (regular, special event). For example, you might

purchase a bottle of wine for an evening meal at home, for a dinner party, for cooking, or for a gift. No doubt you would buy a different type and quality of wine for each occasion or purpose.
Likewise when dining out, your choice of restaurant would vary depending upon the reason, whether it be to entertain your boss, a family get together, a wedding reception, a romantic dinner for two or just a quick lunch with a friend.

If a product is typically used for a particular occasion, the marketing firm might like to extend use by encouraging the market to think of using the product on other occasions. For example, if the market typically thinks of eating a particular product as a treat (for example, DarkTemptations), then the firm might advertise the product in a way that suggests that people should reward themselves more often. Buyer-readiness stage Buyer readiness stages range from being unaware that the product or service exists to actual purchase. The six buyer readiness stages are: Issues Is the consumer aware that the product exists? Do Awareness they know about your company and your brand? What does the consumer need to know about the product? Do they know what benefits the product Knowledge provides? Do they know what attributes/features the product has? Do they know how much the product costs and where to buy it? Does the consumer like the product? What is their Liking attitude towards the product? Do they feel that it would provide useful benefits? Does the consumer prefer your brand? Do they Preference believe that your brand provides the right mix of attributes to deliver desired benefits? Is the consumer convinced that they should buy your Conviction brand? Are they convinced that your brand would meet their needs and is value for money? Purchase Have they moved from purchase intention to actually Stage

purchasing the product?

Attitude define an attitude as a 'learned tendency to response consistently towards a given object'. People's attitude toward the product can range from 'enthusiastic, positive, indifferent, negative, to hostile' Frankly, it is a waste of time trying to convince people with a negative attitude toward the product to buy it. For example, no amount of

advertising is going to persuade a non smoker to purchase cigarettes. However, indifferent people
could be persuaded to buy, and people with a positive attitude toward the both the product category and your brand are a very attractive target market. Loyalty status When assessing loyalty, consumers can be classified as completely loyal, somewhat loyal, or not loyal. Completely loyal consumers are those that would not consider buying another brand or visiting a different outlet. one tends to be more loyal for service products, such as

hairdresser and doctor, while one tends to be a

brand switcher when it comes to most food products. Some consumers may be loyal to more than one brand. For example,if one likes both Brittania and

Sunfeast biscuits and tends to buy whatever is on special for those two brands. Other consumers
may show no brand loyalty at all and may simply buy whatever brands are on special