Segmentation & Targeting

What is a market segment?

• A group of consumers who have a similar set
of needs and wants.
• Marketer’s task is to is to identify the
segment(s), understand nature of consumers
within the segment, and target them with
products and services that meet their needs.
 How does a marketer identify a
segment?
• Segments exist naturally.
• Marketers apply some parameters
(segmentation variables) to identify these
segments.
 Segmentation Variables
• Geographic
• Demographic
• Psychographic
• Behavioural
 Geographic
• Region
• City
• Rural and semi-urban areas
 Geographic
• Region
 Geographic
• City
 Geographic
• Rural and semi-urban areas
 Demographic
• Age and Life Stage
 Demographic
• Family Size
 Demographic
• Gender
 Demographic
• Income
 Demographic
• Occupation
 Demographic
• Education
• Socio-economic classification
 Psychographic
• Lifestyle and Values
• Personality
 Psychographic
1. Innovators: Successful, sophisticated, active
2. Thinkers: Mature, satisfied, reflective, ideology
3. Achievers: Successful, goal and family oriented
4. Experiencers: Young, enthusiastic, impulsive
5. Believers: Conservative, conventional, traditional
6. Strivers: Trendy, fun-loving, but resource constrained
7. Makers: Practical, down-to-earth, self-sufficient
8. Survivors: Elderly, passive, concerned about change
 Behavioural
• Needs and benefits
 Behavioural
• Decision roles – initiator, influencer, decider,
buyer, user
 Behavioural
• Occasion
 Behavioural
• User status - Non-users, Ex-users, Potential
users, First time users, Regular users
 Behavioural
• Usage rate – low, moderate, heavy
 Behavioural
• Buyer readiness stage – unaware, aware,
informed, interested, desire to buy, intend to
buy
 Behavioural
• Loyalty status – hard core loyal, split loyal,
shifting loyal, switcher
 Behavioural
• Attitude – enthusiastic, positive, indifferent,
negative, hostile
 Other bases
• Multiple
• Niche
• Mass
• Mass Customization
Market Targeting
 Effective Segmentation Criteria
• Measurable
• Substantial
• Accessible
• Differentiable
• Actionable
Attractiveness of a Market Segment
• Threat of intense segment rivalry
• Threat of new entrants
• Threat of substitute products
• Threat of buyers’ growing bargaining power
• Threat of suppliers’ growing bargaining power
 Targeting Strategies
• Single segment concentration
• Product specialization
• Market specialization
• Full coverage