Presented By: Akshit Bajaj Vivek Ranjan Jitendra Sharma

The concept of market segment is based on the fact that the market of commodities are not homogeneous but they are heterogeneous. Market represent a group of customer having common characteristics but two customer are never common in their nature, habits, hobbies income and purchasing techniques. According to Philip kotler , Market segmentation is subdividing a market into distinct and homogeneous subgroups of customers, where any group can conceivably be selected as a target market to be met with distinct marketing mix.

Market Segmentation is a method of dividing a market (Large) into smaller groupings of consumers or organisations in which each segment has a common characteristic such as needs or behaviour.

Henry Ford epitomized this strategy when he offered the Model- T Ford in one colour , black.

SEGMENT MARKETING
Consists of a group of customers who share a similar set of needs and wants. Identifiable Group with in a Market with Similar
Wants Purchasing Power Geographical Location Buying Attitudes

NICHE MARKETING
Group of customers seeking a distinctive mix of benefits who are ready to pay extra premium. Niche = segment sub segments Eg. Washing detergents hard & gentle washes . Surf excel for tough stains ( hard on clothes) & Ezee from Godrej for delicate clothes. --- Astha , Sanskar , Q TV focus on religion & spiritualism. DISTINCT NEEDS PAY PREMIUM SPECIALIZATION LESS COMPETITION POTENTIAL

LOCAL MARKETING
Marketing programs tailored to the needs & wants of local customer groups in trading areas, neighborhoods , etc. this trend is called grass roots marketing. Ex. Spiderman 3 was released in 5 different language in India including bhojpuri. Pune sarees Kashmiri silk

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INDIVIDUAL MARKETING
Ultimate segmentation segments of 1 or customized marketing or one to one marketing. Customerization empower the consumers to design the product or service offering of their choice. Ex. Paint companies have started doing this- Asian Paint , Nerolac , Berger Paints Arvind mills launched Ruffn Tuff Jeans, branded ready to stitch

1) Determining Demand Pattern/Survey Stage:

Demand patterns indicate the uniformity or diversity of consumer needs and desires for particular categories of goods & services. A firm would face one of the three demand patterns:-

Homogeneous preference :
where all the consumer have roughly the same preferences. We would predict that existing brand would be similar and cluster around the middle of the scale in both sweetness and creaminess.

Diffused preference :
consumers vary greatly in their preferences

Clustered preference :

creaminess

sweetness

Homogeneous Preference -no natural segments -all buyers have same preference

creaminess

sweetness

Diffused Preference -no pattern (or poor research) -take center position

creaminess

sweetness

Clustered Preference -natural segments -increases as number of competitors increases

In addition to this the survey stage is divided into two parts, viz. i) Focus group discussions and in-depth interviews with a view to get an insight into consumer motivation, attitude and behaviour, and ii) Based on this insight developing a questionnaire which is administered to a sample group of consumers. The objective of this questionnaire is to collect data on: a) Attributes sought in a product and their priority ratings, b) Brand awareness and rating of different brands, c) Product usage patterns, d) Customer attitudes towards the generic product or product category itself, e) Demographic, psychographics, and media habits of samples respondents.

2) Establish Possible Bases of Segmentation/Analysis Stage: It is widely thought in marketing that than segmentation is an
art, not science. The key task is to find the variable, or variables that split the market into actionable segments. There are two types of segmentation variables i. Needs ii. Profilers The basic criteria for segmenting a market are customer needs. To find the needs of customers in a market, it is necessary to undertake market research. Profiles are the descriptive, measurable customer characteristics (such as location, age, nationality, gender, income ) that can be used to inform a segmentation exercise. After collecting the data, it is analyzed using factor analysis. This is used to identify factors that differentiate customer groups. Cluster analysis is now used to cluster customers into maximally different groups.

3) Identify Potential Market Segments/Profiling Stage:

In this stage each cluster is profiled in terms of demographic, psychographic, media habits, attitudes, behaviour, and consumption habits. The marketer can give each segment a name based on a dominant distinguishing characteristics.
After performing customer segmentation, one can understand who the customers are from a demographic perspective. An accurate profile of the customers allows one to analyze market areas or neighbourhoods to understand the penetration rates and the market potential for products and services. Penetration rate points to where market opportunity exists. By identifying and understanding the customers in the clusters one has the highest penetration, one can target marketing or business activities to those who are most likely to purchase the products. One can improve response rates and ROI by precisely marketing to prospects with offers that appeal specifically to them. Customer profiling is a key analysis necessary to project the size of the total market opportunity, and project revenue and customers for new or planned locations. Few companies can make successful site selection decisions without first understanding customer profiles.

Need For Segmenting Markets Better Matching Of Customer Needs Better Opportunities For Growth Targeting Marketing Communications

Enhanced Profits For Business

Retain More Customers

Gain Share Of The Market Segment

1) Better Matching Of Customer Needs Customer needs differ. Creating separate offers for each segment makes sense and provides customers with a better solution . 2) Enhanced Profits For Business Customers have different disposable income. They are, therefore, different in how sensitive they are to price. By segmenting markets, business can raise average prices and subsequently enhance profits 3) Better Opportunities for Growth Market segmentation can build sales. For example, customers can be encouraged to trade-up after being introduced to a particular product with an introductory, lower-priced product.

4) Retain More Customers Customer circumstances change, for example they grow older, form families, change jobs or get promoted, change their buying patterns. By marketing products that appeal to customers at different stages of their life (lifecycle), a business can retain customers who might otherwise switch to competing products and brands.

5) Targeting Marketing Communications Businesses need to deliver their marketing message to a relevant customer audience. If the target market is too broad, there is a strong risk that : i) The key customers are missed, and ii) The cost of communicating to customers becomes too high/unprofitable.

6) Gain Share Of The Market Segment Unless a business has a strong or leading share of a market, it is unlikely to be maximizing its profitability. More brands suffer from lack of scale economies in production and marketing, pressures from distributors and limited space on shelves.

Basis for Segmenting Consumer Markets Geographic Segmentation Psychographic Segmentation

Demographic Segmentation Behavioural Segmentation

GEOGRAPHIC SEGMENTATION
Divide the market into different group based on : Region South India , North , Western Region, East City metro cities, cities with population more than 1 million World Density Climate States Ex.- Mcdonalds globally, sell burgers aimed at local markets, for example, burgers are made from lamb in India rather then beef because of religious issues. In Mexico more chilli sauce is added and so on.

DEMOGRAPHIC SEGMENTATION
AGE:As
people age their needs and wants change, some organizations 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.maximmagazine.co.uk) a male lifestyle magazine covering male fashion, films, cars, sports and technology. \

INCOME:

is another strategy used by many organisations. Stores like Harrods, Harvey Nicohals are predominantly aimed at the affluent market. Daewoo aim their vehicles at price sensitive buyers who require a bundle of benefits for the price. In today's globally competitive environment brands are specifically developed and positioned within particular income segments in order to maximize turnover.

LIFECYCLE:

Products and services are also aimed at different lifecycle segments. Holidays are developed for families, the 18-30's singles, and for those in their 50's.

PSYCHOGRAPHIC SEGMENTATION
Group customers according to their life-style and buying

psychology.
The desire for status, enhanced appearance and more money are examples of psychographic variables. E.g. femina magazines for women who are having a broad & progressive thinking about this modern world.

BEHAVIOURAL SEGMENTATION
OCCASIONS : BENEFITS :dandruff control Archie's and Hallmark cards, Monaco at tea time.

Shampoo for hair conditioning, cleaning , hair fall defense

USER STATUS :- light medium heavy user

LOYALTY STATUS :brand, shifting loyal, switcher hardcore loyal , split loyal- loyal to 2-3