Market Segmentation

1. By: Sayan Chakraborty
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2. What is Market Segmentation?
• The Process of defining and
subdividing a large homogenous
market into clearly identifiable
segments having similar need,
wants or demand characteristics.
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3. Objective of segmentation:
To design a marketing mix
that precisely matches the
expectation of customers
in the target segment.
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8. GEOGRAPHIC SEGMENTATION
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9. Division of the market into
geographical units such as
nations, states, regions,
countries, cities or neighborhood.
The company can operate in one
or few areas or it can operate in
all but pay attention to local
variation.
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10. Activity that are concentrating
on getting as close and
personally relevant to individual
customers as possible is called
GRASSROOT MARKETING.
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11. Example:
In the southern
sates like Tamil
Nadu, people
prefer to drink
coffee and seem
to be inclined
about the drink.
But in the
other states
People seem to
enjoy Tea as
Drink.
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12. Geographic segmentation of
markets into urban and rural as
these markets differ on a
variety of important parameters
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13. DEMOGRAPHIC
SEGMENTATION
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14. Division of the market on
variables such as age, family life
cycle, family size, gender, income
is Demographic Segmentation of
marketing.
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15. Advantage of demographic
segmentation is that they are
often associated with consumers
needs and wants.
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17. DEMOGRAPHIC->AGE and LIFE
CYCLE STAGE:
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18. DEMOGRAPHIC-> GENDER
Differentiation of products by
segmenting the population on
the basis of gender, more
precisely Men and Women.
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19. Suzuki..
1.Inazuma-
Male
2.Gearless
scooters-
Female
Emami
1.Fair and
Lovely-Female
2.Fair and
handsome-
Male
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20. DEMOGRAPHIC-> INCOME
Basically, Segmenting the market
on the basis of Income, and
considering income as an variable.
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21. ADVANTAGE:
Differentiating on income would
lead to the knowledge about the
ability of consumers to
participate in the market
exchange.
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22. DISADVANTAGE:
Income does not always predict the
best consumers for a given
product.**
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24. DEMOGRAPHIC-> SOCIO-ECONOMIC
CLASSIFICATION
What is it?
Answer: this is mainly done to classify
urban households in INDIA.
The classification is based on two
factors.
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25. the factors are:
1>the education level of the
head of the household.
And
2>the occupation level of the
head of the household
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26. DEMOGRAPHIC->
GENERATION
Segmenting the market on the
basis of generation as an acting
variable.
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28. Psychographics is
Demographic
Psychology
Psychographics
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29. Psycho-
Graphic
segmentation
Lifestyle
Personality
traits
Values
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30. TM
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33. Marketers divide buyers into groups
on the basis of:-
1.Knowledge
2.Attitude
3.Use
4.Response
to a Particular product and
commodity.
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34. Needs and
Benefits
• Need Based
• Benefit Based
Decision Roles
• Initiator
• Influence
• Decider
• Buyer
• User
User and User
Related variables
• Occasion
• User Status
• User Rate
• Buyer
Readiness
Stage
• Loyalty Status
• Attitude
• Multiple bases
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35. INFLUENCE:
DOCTORS PRESCRIBE MEDICINES, SO
PHARMACEUTICAL COMPANIES INFLUENCE
THE DOCTORS BY PROVIDING TECHNICAL
SPECIFICATIONS OF A PARTICULAR BRAND
OF DRUG FOR SELLING OF IT.
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36. Decider
women play a significant role on
deciding of kitchen appliances and
also initiating purchase of
different household products.
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Real user related variables
Multiple
Bases
Loyalty Attitude
Hardcore
Loyal
Split
Loyal
Shifting
Loyal
Switchers
Buyer
readiness
User
Rates
User
status
Occasions

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41. Business market can be
segmented on the bases
consumer market variables
but because of many inherent
differences like
1.Businesses are few but
purchase in bulk
2.Evaluate in depth
3.Joint decisions are made
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Variables
Demographic
Operating
Variables
Purchasing
Approaches
Situational
factors
Personal
characteristics

43. Demographic:
Industry: which industry should we
serve?
Company Size: What size companies
should we serve?
Location: What geographical areas
should we serve?
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44. Operating Variable:
Technology: What consumer
technologies should we focus on?
User or Non User status:
Should we serve heavy users, medium
users, light users or non users?
Customer Capabilities: should we serve
customers needing many or few
services?
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45. Purchasing Approaches:
 Purchasing function organization:
should we serve companies with a highly
centralized or decentralized purchasing
organization?
 Power structure: Should we serve companies
which are Engineering oriented or financially
oriented so on?
 Nature of existing relationship:
Should we serve companies with which we
share strong relationship or go for the
companies we desire?
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46. General Purchasing policies:
Should we serve those companies that
prefer leasing? Or Service contract
Purchasing Criteria:
Should we serve companies that are
seeking
1> quality?
2>Price?
Or
3> service?
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47. Situational Factors:
Urgency:
Should we select those companies which
need quick and sudden service and
delivery?
Specific Application:
Should we focus on certain applications
or all applications?
Size or order:
Should we focus on Large orders or
small orders?
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48. Personal characteristics:
Loyalty:
Should we serve those companies which
show high loyalty to their suppliers?
Attitude towards risk:
Should we serve risk taking or risk
avoiding customers?
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Measurable Substantial
Accessible Differentiable
Actionable

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52. What is Market targeting?
Market targeting refers to picking a
specific group or small set of
groups to which a business will
advertise.
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53. Idea behind the concept of Market
Targeting
It is based on the idea that, because
it's not really possible to make or
do something that will please
everyone, a business has to
specialize.
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54. Segmentation VS Targeting
Segmentation breaks up an entire
market into different groups, targeting
is the process of selecting exactly
which one of the groups will be the
focus of advertising efforts.
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55. Main Principle of Target Marketing:
A company can never sell to
everyone successfully. The needs,
wants, beliefs and habits of
people around the world are so
varied that it is virtually
impossible to make a product or
service that is truly universal to
everybody.
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56. Purpose of Market Targeting:
The main reason an organization uses market
targeting is to give more power to its
brand.*
Organizations also use these methods when
they want to get an idea of how much of
something they will sell.**
Estimates related to sales sometimes are
necessary in order for a business to get
initial financing from banks or investors .***
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57. Approaches Of Market Targeting
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Undifferentiated
Approach
Differentiated Approach
Concentrated Approach

58. Undifferentiated Approach
Sales-growth strategy that ignores
market segment differences and
attempts to appeal to all
prospective customers with a
single, basic product line through
mass advertising and distribution.
Also called mass marketing.
Example:
Gasoline, white Bread, Soft drinks
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59. Advantage of Undifferentiated
Approach
• Wide audience: Since the target audience is
broad, the number of successful hits is high
despite of the low probability of a single
person turning up.
• Less risky: If all the efforts in one particular
area goes in vain, still the eventual loss is
less compared to a loss in the narrowly
focused area.
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60. • Production cost per unit are low on
account of having one production run
for homogeneous product.
• Higher potentials of sales volume and
efficiency of scale in a much larger
market.
• Marketing research cost and advertising
cost are relatively low.
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61. Differentiated Approach
A sales growth strategy in which
several market niches* or
population segments are targeted
with different products for each
niche* or segment.
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62. Concentrated Approach
Growth strategy in which resources
of a firm are focused on a well-defined
market niche or population
segment.
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