Market Segmentation

MARKET SEGMENTATION
The concept : It is the process of dividing the total market into relatively distinct homogenous sub-groups of consumers with similar needs or characteristics that lead them to respond in similar ways. A market segment , therefore, is a portion of a larger market in which the individuals, groups or organizations share one or more characteristics that cause them to have relatively similar product needs.

Bases for segmenting the markets

Geographic segmentation Dividing the mkt into different geographical units such as regions, states, countries, cities, zones, etc. Difference in geographical areas lead to differences in needs and wants of customers of that area. So, the marketers of different companies need to LOCALIZE their products, advertising, promotion and sales efforts to fit the needs of individual regions and cities.

 Egs - >Coca cola developed 4 readyto- drink canned coffees for the Japanese mkts, each targeted to a specific geographic region in Japan itself. > Procter & Gamble introduced Curry Pringles in England and Funky , Saucy Pringles in Asian countries.

 Demographic segmentation Dividing the market into groups based on population variables such as age, gender, family size, income, occupation, education, religion generation, etc. EXAMPLES: Age segmentation: P&G offers soft toothbrushes with their favorite cartoon characters for kids and serious models with better oral care for adults

Bases for segmenting the markets contd.

 Gender segmentation: Koutons and john player now offer apparel with the brand called Les femme and Ms. Player especially for women. Similarly, Nike has recently stepped up its efforts to capture the womens sports apparel market by opening NIKEWOMEN stores in major cities. Income segmentation: Travel companies/ airlines offer varied fly packages catering to the needs of individual customers based on their income such as Economy class, Business class, etc.

 Psychographic segmentation Divides the buyers into different groups based on social classes, lifestyle or personality characteristics. Eg: Le meridian , the 5 star hotel offers customised Suites for its customers on the basis of their typical lifestyle- Gujarati suite for rich Marwari couples ,etc.

 Behavioral segmentation Divides the buyers/market into groups according to occasions, consumer knowledge, use, attitude, etc. Occasions- Buyers can be grouped according to occasions when they get the idea to buy, actually make purchases, or use the purchased item.
Ex.- People make specific purchases during Diwali - Cadbury celebrations

Benefits sought- Grouping buyers according to the different benefits that they seek from the product. Saffola Refined oil customers seek for the benefit of heart protection and good taste of oil. So saffola came with variants of its oil to cater to the market segment looking for different benefits

User status- Mkts can be segmented into nonusers, ex-users, potential users, firsttime users and regular customers. Eg- P&G acquires names of Parents-to-be and offers them with product samples and uses ads for its product pampers and other baby products. User rate- Mkts can be segmented Into light, medium and heavy product users depending upon the consumption of customers.

Loyalty status- Consumer loyalty can become a strong base for segmenting the mkts. Consumers can be: COMPLETELY LOYAL or SOMEWHAT LOYAL to the brand. On this basis, companies can develop offerings for different customers.

Benefits of Segmentation
Facilitates proper choice of target market Facilitates tapping of the market, adapting the offer to the target Makes marketing effort more efficient and economic Helps in more efficient targeting and positioning by the firm Benefits the customer as well