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Market segmentation

Dividing the pool of buyers into different


segments based on different criteria
Not all the products in market are
everything for everyone
It is target marketing unlike mass market
where we want everyone to buy our
product
We are focusing on particular group of
buyers
DEFINE MARKET SEGMENTATION
The division of a market into different
homogeneous groups is known as
market segmentation

Market segmentation can be defined as


the subdivision of the market into
compatible subsections of customers
where any subsection may be selected
as a market target to be reached with a
unique marketing mix.
NEED FOR MARKET
SEGMENTATION
The marketing concept calls for
understanding customers and satisfying
their needs better than the competition.

But different customers have different


needs and it is rarely possible to satisfy
all customers by treating them alike
A MARKET SEGMENT SHOULD
BE
Measurable
Accessible by communication and
distribution
Different in its response to a marketing
mix
Durable (not changing too quickly)
Substantial enough to be profitable
MASS MARKETING
Mass marketing refers to treatment of
the market as a homogenous group and
offering the same marketing mix to all
customers.
DRAWBACK OF MASS
MARKETING
Customer needs and preferences differ
and the same offering is unlikely to be
viewed as optimal by all customers
If firms ignored the differing customer
needs another firm likely would enter the
market with a product that serves a
specific group and the incumbent firms
would lose those customers
Tarket marketing
Target marketing recognizes the
diversity of customers and does not try
to please all of them with the same
offering
First step in target marketing is to
identify different market segments and
their needs
BASES FOR SEGMENTATION IN
CONSUMER MARKETS
Consumer markets can be segmented on
the following customer characteristics

1.Geographic
2.Demographic
3.Psychographic
4.Behavioralistic
GEOGRAPHIC SEGMENTATION

Prospective customers are in local, state, regional or national


marketplace segment. If a firm is selling a product such as a farm
equipment, the geographic location will remain a major factor in
segmenting the target markets because their customers are located
in specific rural areas.
Segmentation of customers based on geographic factors are
Region Segmentation by continent / country / state / district / city.
Size Segmentation on the basis of size of an urban area as per
the population size.
Population Density Segmentation on the basis of population
density such as urban / sub-urban / rural etc.
LOCATION
REGIONAL
ZIPCODE
DEMOGRAPHIC SEGMENTATION

Market segmentation can be done


based on demographic factors such as
Age. For example, Rico watches have
segmented their product portfolio
according to different age groups of
people.

GENDER INCOME ETHINICITY


EDUCATION
PSYCHOGRAPHIC
SEGMENTATION
Psychographic Segmentation focuses
on group customers according to their
life-style and purchasing psychology.
Many businesses offer products based
on the attitudes, beliefs and emotions,
ideas, and perceptions of the target
market. Psychographic segmentation
includes variables such as Activities,
Interests, Opinions, Attitudes, and
Values.LIFESTYLE
BEHAVIORAL SEGMENTATION

Markets can be segmented on the basis


of buyer behavior. It is because the
buying behavior of consumers differ
based on the geographic, demographic
and psychographic factors. Marketers
often find practical benefits in using
buying behavior as a separate
segmentation basis in addition to factors
like geographic, demographics, and
psychographics.

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