Segmentation,

Targeting
and Positioning - I

Segmentation

What is segmentation
Why segment
Characteristics of good segmentation
Bases of segmentation

What is segmentation
Segmentation
Dividing the market into groups of (actual and/or
potential) customers so that each group is relatively
homogenous with respect to its characteristics,
needs, evaluations or behaviors. The groups are
called market segments.

Why segment
Optimizes effectiveness of companys actions
More targeted marketing mix by identifying key
differences among customers
Increased customer satisfaction
Higher CLV

Optimizes cost-efficiency of companys actions

Doing away with irrelevant differences to create single
offering for customers within each segment

Characteristics of Good Segmentation

MECE
Homogenous within
Heterogenous across

Bases of segmentation
Value-based segmentation
Profile-based segmentation
Geographic

Region, country, urban/rural

Demographic

age, gender, income, education

Psychographic

life-style and personality variables

e.g. style-conscious, risk-taker, fun-loving

Behavioral

User status, usage rate, channel usage, loyalty status

Good approach to segmentation?