Preferential Segmentation

Submitted By:

Sonit Chawda Simerdeep Singh MBA-IB

 CONCEPT AND DEFINITION 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 sub-dividing 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.

LEVELS OF MARKET SEGMENTATION

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

 Market Segments can be defined in many different ways. One way to carve up a market is to identify Preference segments Suppose ice cream buyers are asked how much they value sweetness and creaminess as two product attributes. Three different patterns can emerge.

 The key steps in target marketing are market segmentation, market evaluation, and product positioning. Market segmentation means dividing mass markets into distinct groups of buyers with relatively homogeneous preferences, attitudes, or behaviors, which distinguish them from the rest of the market. To do this, marketers begin by analyzing preferencesegments, which are expressed in three ways:

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 :
In this type of market, natural segments emerge to describe distinct groups according to preference. In this example, groups form which prefer creaminess and/or sweetness at similar levels. A marketer in this situation should choose position that responds directly to one of those segments.

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

Diffused Preference Each customer has a unique preference. A customized marketing approach with products that are unique for every customer is needed. With theadvent of high level technology, it is now possible to sit down with the customer, design the desired product, and send the specifications off to the factory for the product to be made. Homogeneous Preference This is the market where all customers have similar preferences. The market is one large segment, without natural differences. Markets may start off as uniform, but over time special needs may develop. Many building product manufacturers face a homogeneous market with few opportunities to differentiate their product or to focus on a small market with unique needs. Increased wealth among consumers often leads to new segments, each filled with consumers who wish something just a little different from the commodity offered. Clustered Preference This is the fertile ground for segmentation. This is where distinct customer preferences divide up the market. One market may have several clusters separated along different dimensions of needs and wants. For example, buyers of computers may be separated along those who buy on price compared to those who buy on company size and reputation. Or, acluster may form around service and price offering. Different brands may be offered to the different target segments. For example, in order to satisfy the needs of two different markets, IBM offers PS and the no-brand Ambra PC.