Market

Segmentation (subdivision)
MARKETING MANAGEMENT Lecture#31
Saira Sanawar
What is Market Segmentation?
THE BREAKING DOWN OR BUILDING UP OF
POTENTIAL BUYERS INTO GROUPS CALLED
MARKET SEGMENTS A potential buyer is a
person who may have a
reason or benefit to
purchase your product.
 Example of market segmentation?
Titan Watches( Indian consumer goods company) For the youth /the outdoor lovers:
Arrives in three broad Segments
• The Rich
• The Middle
• The Lower
• For the Gold lovers:
For Designer Segment
For Children Segment
 Benefits of
Market Segmentation

Identifies opportunities for new product development

Helps design marketing programs most effective for

reaching homogenous groups of buyers

Improves allocation of marketing resources

The need for marketing
segmentation
 The marketing concept calls for understanding customer
and satisfying there needs better than the competition.

 Different customers have different needs, and its rarely

possible to satisfy all the customers by treating them
alike.
Difference between a mass market
and target market
 Mass market refers to treatment of the market as a
homogenous group and offering the same marketing
mix to all customers.
Difference between a mass market
and target market
 Target market on the other hand recognizes the diversity
of the customers and does not try to please all of them
with the same offering.
Requirements of market segments

 Indefinable: the differentiating attributes of the segments

must be measurable so they can be identified.

 Accessible: the segments must be reachable through

communication and distribution channels.
Requirements of market segments

 Unique needs: to justify separate offerings, the segments must

respond differently to different marketing mixes.

 Substantial( useful): the segments should be sufficiently large to

justify the resources required to target them.
Requirements of market segments

 Durable: the segments should be relatively(comparatively)stable to

minimize the cost of frequent changes.
Bases for segmentation in
consumer markets
Geographic

Demographic

Psychographic

Behavioralistic
Geographic segmentation

Geographic segmentation tries to divide

markets into different geographical units:
 Regions
 Size of the area
 Population density
 Climate
Geographic segmentation

 Regions: by continent, country, state or

even neighborhood

 Size of the area: segmented according

to size of population
Geographic segmentation

 Population density: often classified as

urban, suburban, or rural

 Climate: according to weather patterns

common to certain geographic regions
 Demographic segmentation
Demographic segmentation consists of dividing the market into groups
based on variables such as:

• Age • Social class

• Gender • Life style
• Income

Demographic: segments of human populations broken down by age or sex or income etc.
Demographic segmentation

 Age : Marketers design, package and promote products differently

to meet the wants of different age groups.

Good examples include the marketing of toothpaste (contrast the

branding of toothpaste for children and adults) and toys (with many
age-based segments).
Demographic segmentation

 Gender: Gender segmentation is widely used in consumer

marketing.

The best examples include clothing, hairdressing, magazines and

toiletries and cosmetics.
Demographic segmentation

 Income: Many companies target affluent(rich, comfortable)

consumers with luxury goods and convenience services. Customers
depending on their income and purchasing power.
Demographic segmentation

 Social class: Consumers "perceived" social class

influences their preferences for cars, clothes, home
furnishings, leisure(spare time) activities and other
products & services.
Demographic segmentation

 Lifestyle: Marketers are increasingly interested in the effect of

consumer "lifestyles" on demand. Unfortunately, there are many
different lifestyle categorization systems, many of them designed by
advertising and marketing agencies as a way of winning new
marketing clients and campaigns.
Psychographic segmentation

Psychographic segmentation groups customers according

to their lifestyle. Activities, interest, and opinions (AIO)
surveys are one tool for measuring lifestyle.
 Activities
 Interest
 Opinion
 Values
Behavioralistic segmentation

Behavioralistic segmentation is based on actual customer

behavior towards products. Some behavioralistic variable
include:
 Opinions, interests and hobbies
 Degree of loyalty
 Occasions

 Benefits sought
 Usage
Behavioralistic segmentation

 Opinions, interests and hobbies – this covers a huge area

and includes consumers’ political opinions, views on the
environment, sporting and recreational activities and
arts and cultural issues.
Behavioralistic segmentation

 Degree of loyalty – customers who buy one

brand either all or most of the time are
valuable to firms.
Behavioralistic segmentation

 Occasions – this segments on the basis

of when a product is purchased or
consumed.
Behavioralistic segmentation

 Benefits sought – this requires marketers to identify and

understand the main benefits consumers look for in a
product.
 Usage – some markets can be segmented into light,
medium and heavy user groups.
7 rules of creating marketing plan

1. Know your business

2. Determine target mark
-Knowing your customer inside and outside will help when identifying market
strategies.
3.Analysis competitor
4.Set goals
5.Outline Strategies
6.Set a Budget
7.Get to work
-Which piece of a marketing plan do you think is most valuable to your as a
business owner? What helps you the most?