Step 1.

Market Segmentation
Bases for Segmenting Consumer Markets

Geographic
Nations, states, regions or cities

Demographic
Age, gender, family size and life cycle, or income

Psychographic
Social class, lifestyle, or personality

Behavioral
Occasions, benefits, uses, or responses

Geographic Segmentation
Segmentation of consumer based on factors like climate zone, continents/ country, region, state, district, and urban/rural area, constitutes geographic segmentation. Marketer, who operate globally, often segment the market by continents/country/region in the first instance, and then go for segmentation on other bases. National markets within a country like India, often segment the market by region, state, district and urban/rural area, in the first instance, and then go for segmentation on other bases. Example: Geographic decides the product consumption pattern. People in coastal areas of Konkan and Goa relish rice, a staple grain there and fish abundantly available from sea. Southern are found of coffee and north Indians like Tea.

GEOGRAPHIC SEGMENTATION
Divide the market into different group based on : Region South India , North , Western Region, East City metro cities, cities with population more than 1 million World Density Climate States Ex.- Mcdonalds globally, sell burgers aimed at local markets, for example, burgers are made from lamb in India rather then beef because of religious issues. In Mexico more chilli sauce is added and so on.

DEMOGRAPHIC SEGMENTATION

As people age their needs and wants change, some organisations develop specific products aimed at particular age groups for example nappies for babies, toys for children, clothes for teenagers and so on. Gender segmentation is commonly used within the cosmetics, clothing and magazine industry. In the UK we have also seen the a male lifestyle magazine covering male fashion, films, cars, sports and technology. \

 Income segmentation is another strategy used by many organizations. Stores like Harrods, Harvey Nicholas are predominantly aimed at the affluent market. Daewoo aim their vehicles at price sensitive buyers who require a bundle of benefits for the price. In today's globally competitive environment brands are specifically developed and positioned within particular income segments in order to maximize turnover. Products and services are also aimed at different lifecycle segments. Holidays are developed for families, the 18-30's singles, and for those in their 50's.

Bases for Demographic Segmentation

Age: Cartoon Network; MTV; News Channels

Gender: Cosmetics & After Shave Income: Economical & Luxury goods Ethnic background: Food
Family Life Cycle: Life Insurance Companies

Generation: Apparels Education Occupation: PC Selling

PSYCHOGRAPHIC SEGMENTATION

Bases for Psychographic Segmentation

Personality

Motivation Lifestyles Psychographic Segmentation Attitude

Psychographics
Psychographic segments market in terms of shared attitudes, interests, and opinions Segments include demographic information such as age and income, but also includes richer descriptions Some organizations develop their own psychographic segments for their consumers, but others utilize national systems (VALS by SRI International)

 Lifestyle groups
Yuppie Associations Mobile High valued house/flat Good Salary Young branded car. Third Agers Associations. 50's Retired early from profession. Time to spare Adventure Seekers

BEHAVIOURAL SEGMENTATION

OCCASIONS - Archies and Hallmark cards, Monaco at tea time. BENEFITS Shampoo for hair conditioning, cleaning , hair fall defence dandruff control USER STATUS- light medium heavy user LOYALTY STATUS- hardcore loyal , split loyalloyal to 2-3 brand ,shifting loyal, switcher

Segmenting by Behavior
Behavioral segmentation slices consumers on the basis of how they act toward, feel about, or use a product

Market Segmentation
Behavioral Segmentation Variables
Occasions User Status User Rates: Airlines Loyalty Status: Credit Cards Readiness Stage
Attitude Toward the Product

Class Assignment We focus on the following questions How can a company identify the segments that make up a market? What criteria can a company use to choose the most attractive target markets?

Choosing a Targeting Strategy

Undifferentiated Marketing Differentiated Marketing Concentrated Marketing Customized Marketing

Strategies for Reaching Target Markets

Undifferentiated Marketing
Concentrated Marketing
Differentiated Marketing

Micromarketing

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 Undifferentiated marketing: when a firm produces only one product or product line and promotes it to all customers with a single marketing mix, Ignores segmentation opportunities
Sometimes called mass marketing Much more common in the past

Undifferentiated Marketing

 Differentiated marketing: when a firm produces numerous products and promotes them with a different marketing mix designed to satisfy smaller segments
Tends to raise costs Firms may be forced to practice differentiated marketing to remain competitive, Targets several segments and designs separate offers for each. Coca-Cola (Coke, Sprite, Diet Coke, etc.) Procter & Gamble (Tide, Cheer, Gain, Dreft, etc.) Toyota (Camry, Corolla, Prius, Scion, etc.)
Differentiated Marketing
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 Differentiated Marketing Procter and Gamble Practicing Differentiated Marketing

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 Lunchables Using a Differentiated Marketing Strategy

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 Concentrated marketing (niche marketing): when a firm commits all of its marketing resources to serve a single market segment
Attractive to small firms with limited resources and to firms offering highly specialized goods and services. Targets one or a couple small segments Niches have very specialized interests
Concentrated Marketing

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 Micromarketing: involves targeting potential customers at a very basic level, such as by ZIP code, specific occupation, lifestyle, or individual household
The Internet may allow marketers to make micromarketing even more effective Gene Solutions targeting a specific occupation

Tailoring products and marketing programs to suit the tastes of specific 8-25 individuals and/or locations.

Positioning Bases
Attribute Price and Quality Use or Application

Product User
Positioning Bases
Product Class

Competitor