1. Online Mktg – Segmentation Strategy
© Ramakrishna Kongalla,
Assistant Professor
Indian Institute of Tourism & Travel Management
(An Organization of Ministry of Tourism, Govt. of India)
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2. Market Segmentation
• Target Marketing- Is a market segmentation and market
coverage strategy whereby a product is developed and
marketed for a very well-defined, specific segment of the
consumer population.
• Target marketing is particularly effective for small
companies with limited resources because it enables the
company to achieve a strong market position in the specific
market segment it serves without mass production, mass
distribution, or mass advertising. It enables firms to
capitalize on the respective serve market share
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3. Requirements of Market Segments
In addition to having different needs, for segments to be practical they
should be evaluated against the following criteria:
• Identifiable: the differentiating attributes of the segments must be
measurable so that they can be identified.
• Accessible: the segments must be reachable through communication
and distribution channels.
• Measurable: It has to be possible to determine the values of the
variables used for segmentation with justifiable efforts. This is
important especially for demographic and geographic variables. For
an organization with direct sales (without intermediaries), the own
customer database could deliver valuable information on buying
behavior (frequency, volume, product groups, mode of payment etc).
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4. • Substantial: the segments should be sufficiently
large to justify the resources required to target
them.
• Unique needs: to justify separate offerings, the
segments must respond differently to the different
marketing mixes.
• Durable: the segments should be relatively stable to
minimize the cost of frequent changes.
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5. ‘Market Segmentation’
Market Segmentation is the sub-dividing of customers into
homogenous sub-set of customers where any sub-set may
conceivably selected as market target to be reached with distinct
Marketing Mix – Philip Kotler
• Segmentation is essentially the identification of subsets of buyers
within a market that share similar needs and demonstrate similar
buyer behaviour.
• The world is made up of billions of buyers with their own sets of
needs and behaviour. Segmentation aims to match groups of
purchasers with the same set of needs and buyer behaviour. Such a
group is known as a 'segment'.
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6. • The process of defining and subdividing a large
homogenous market into clearly identifiable segments
having similar needs, wants, or demand characteristics
is called Segmentation.
• Its objective is to design a marketing mix that precisely
matches the expectations of customers in the targeted
segment.
• Market Segmentation consists of taking the total
heterogeneous market for a product & dividing into
several sub-market of segments, each of which tends to
be homogenous in full significant aspects – William
Stanton
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7. • Market Segmentation is the marketing process of
identifying and breaking up the total market into
groups of potential customers with similar motivations,
needs or characteristics, who are likely to exhibit
homogeneous purchase behaviour.
• Undertaking this process allows marketing efforts to be
targeted at select groups.
Market segmentation involves the subdividing of a
market into distinct subgroups of customers, where any
subgroup can be selected as a target market to be met
with a distinct marketing mix. - CIMA
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8. • A marketing term referring to the aggregating of prospective
buyers into groups (segments) that have common needs and will
respond similarly to a marketing action.
• Market segmentation enables companies to target different
categories of consumers who perceive the full value of certain
products and services differently from one another.
• Market Segmentation is the process of splitting customers, or
potential customers, in a market into different groups, or
segments, within which customers share a similar level of interest
in the same or comparable set of needs satisfied by a distinct
marketing proposition.
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9. Market segmentation is the process of
dividing the whole market of goods or
services in groups of people with similar
needs. By making this division there is a high
chance that each group responds in favour to
a specific market strategy.
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10. Benefits & Limitations
Benefits:
• The Organisation gets to know its customers better.
• Provides guidelines for resource allocation.
• It helps focus the strategy of the organisation.
Limitations:
• Targeting multiple segments increases marketing
costs.
• Segmentation can lead to proliferation of products.
• Narrowly segmenting a market can hamper the
development of broad-brand equity.
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11. Why Segmentation?
• To develop marketing activities
• Increase marketing effectiveness
• Generate greater customer satisfaction
• Create savings
• To identify strategic opportunities and niches
• Allocation of marketing budget
• Adjustment of product to the market need
• To estimate the level of sales in the market
• To overcome competition effectively
• To develop effective marketing programmes
• To contribute towards achieving company goals
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13. Geographic Segmentation
• The following are some examples of geographic
variables often used in segmentation.
• Region: by continent, country, state, or even
neighbourhood.
• Size of metropolitan area: segmented according to size
of population.
• Population density: often classified as urban,
suburban, or rural.
• Climate: according to weather patterns common to
certain geographic regions.
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Life-cycle stage: Dividing a market into different groups based on which stage in the life-
cycle, presented in the table below, reflects the fact that people change the goods and
services they want and need over their lifetime.
Life-cycle stages
Bachelor Stage young, single people not living at home
Newly Married Couples young, no children
Full Nest I youngest child under six
Full Nest II youngest child six or over
Full Nest III older married couples with dependent children
Empty Nest I
older married couples, no children living with
them
Empty Nest II
older married couples, retired, no children living
at home
Solitary Survivor I in labour force
Solitary Survivor II retired

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AIO Inventories
AIO studies envisage a wide variety of variables
and measures the major dimensions shown
Activities Interests Opinions Demographics
Work Family Themselves Age
Hobbies Home Social Education
Social events Job Politics Income
Vacation Community Business Occupation
Entertainment Recreation Economics Family size
Club member Fashion Education Geography
Community Food Products City size
Shopping Media Future Lifecycle
Sports Achievements Culture Dwelling

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VALS System Classification:
• The VALS theory and database were first applied to markets in
1978. VALS provides a dynamic framework of values and
lifestyles; which helps to explain why people act as they do as
social groups and as consumers. VALS, unlike some other
approaches, waves together:
• Demographics, 2. Attitudes, 3. Activities, 4. Consumption
patterns, 5. Brand preferences. 6. Media graphics.
•
• The VALS study leads to the identification of four major groups:
•
• The need driven
• The outer directed
• The inner directed
• The integrated

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Female Lifestyle Types
• Cathy the contented housewife
• Cathy epitomises simplicity. She is devoted to her
family and faithfully serves them as mother
housewife and cook. She enjoys a relaxed pace and
avoids anything which might disturb her equilibrium.
• . Candice-the chic subarbanite
• Candice is an urban woman.She is well educated and
genteel. Socializing is an important part of her life.
She is a doer, interested in sports and the outdoors,
politics and current affairs. Her life is hectic and lived
at a fast clip. She is a voracious reader and there are
few magazines she does not read.

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• Eleanor-the elegant socialite: Eleanor is a woman with style. She lives
in the city because that is where she want to be. She likes the socio-
economic aspects of the city in terms of her career and leisure time
activities. She is fashion conscious and dresses well. She is financially
secure and hence not a careful shopper. She shops for status and style
and not for price. She is a cosmopolitan woman who has travelled
abroad and wants to.
• Mildred-the militant motherMildred is a woman who got married
young and had children before she was ready to raise a family. Now
she is unhappy. She is frustrated and vents her frustration by rebelling
against the system. Television provides an ideal medium for her to live
out her fantasies
• Thelma-the old fashioned traditionalist: Thelma is a lady who has
lived a good life. She has been a devoted wife, a doting mother and a
conscientious housewife. Even now, when most of her children have
left home, her life is centred around the kitchen. She lacks higher
education and has little appreciation for the arts or cultural activities.
Her spare time is spent watching TV.

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Male lifestyle types are :
• Ben-the self made businessman.
• Scott-the successful professional.
• Dale-the devoted family man
• Fred-the frustrated factory worker
• Herman the retiring homebody.

20. • Experiencers
– They’re the young enthusiastic, impulsive people who seek variety and
excitement. They spend a comparatively high proportion of income on
fashion, entertainment, and socializing.
• Thinkers
– They’re mature, satisfied, and reflective people motivated by ideals and
who value order, knowledge, and responsibility. They seek durability,
functionality, and value in products. Here we’re considering Mont-Blanc
• Achievers
– They’re successful, goal oriented people who focus on career and family.
They favour premium products that demonstrate success to their peers.
In this segment we can consider most of the premium timeless luxury
watches, such as Rolex, TAG Heuer, and Omega. Neil Armstrong gave
Omega speed master the ultimate endorsement when he wore it on his
historic moon walk in 1969.
• Innovators
– They’re usually successful, sophisticated, active, “take charge” people
with a high self esteem. Purchases often reflect cultivated tastes for
relatively upscale, niche oriented products and services. Here we’re
considering the niche market of upscale segmentation by technology
adaptation.
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21. • Believers
– They’re conservative, conventional, and traditional people with concrete beliefs.
They prefer familiar, Indian made products and are loyal to established brands.
Here we consider Bisleri. As one of the world’s most trusted brands. Bisleri is
leading the way in bringing about positive change in our daily lives. They believe
in being a part of a meaningful movement called the ‘Aqua Green Revolution’
• Strivers
– They’re trendy fun loving people who are resource constrained. They favour
stylish products that emulate the purchases of those with greater material
wealth. They favour stylish products that emulate the purchases of those with
greater material wealth
• Makers
– They’re practical, down to earth, self sufficient people who like to work with
their hands. They seek Indian made products with a practical or functional
purpose.
• Survivors
– They’re elderly, passive people concerned about change and loyal to their
favourite brands.
– While to the consumers it's a beacon of faith and trust, competitors look upon
them as an example of marketing brilliance.
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22. Behavioural Segmentation
• Usage
– Customers can be segmented on the basis of usage status- heavy users, light users
& non-users of a product category. The profiling of heavy users allows this group
to receive most marketing attention (particularly promotion efforts) on the
assumption that brand loyalty among these people will pay heavy dividends.
• User status
– Every product has its nonusers, ex-users, potential users, first-time users and
regular users. A company cannot always rely on the regular users, it has to attract
the other types as well. The key too attracting potential users, or possibly, even
non-users, is understanding the reasons due to which they are not using your
product.
• Attitude
– Attitude is defined as a learned tendency to respond towards something. People’s
response towards a product may range from – Enthusiastic, Positive, Indifferent,
Negative, Hostile .
• Occasions
• Brand Loyalty
• Benefit Sought
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23. Thank You…!!!
©Ramakrishna Kongalla
e-mail: artist.ramakrishna@gmail.com
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