Marketing Management, VTU, Module 3 revised

Prof. Raghavendran Venugopal

Market Segmentation

DefinitionA market segment is a subgroup of

people or organizations sharing one or more characteristics that cause them to have similar product needs. it is distinct from other segments

(heterogeneity across segments)it is homogeneous within the segment

(exhibits common attributes)it responds similarly to a market stimuliit can be reached by a market intervention

2 Prof. Raghavendran Venugopal, AIET, Mijar

PurposeIncrease marketing

efficiency by focusing marketing efforts to a particular group

Maximize scarce marketing resources

Find a market with limited competition

Select the most profitable segment

3Prof. Raghavendran Venugopal, AIET, Mijar

Bases for Market SegmentationProduct oriented ApproachPeople oriented Approach

Prof. Raghavendran Venugopal, AIET, Mijar4

• Size, purchasing power, profiles of segments can be measured.

• Segments must be effectively reached and served.

• Segments must be large or profitable enough to serve.

Measurable Measurable

AccessibleAccessible

SubstantialSubstantial

DifferentialDifferential

ActionableActionable

• Segments must respond differently to different marketing mix elements & actions.

• Must be able to attract and serve the segments.


Segmentation Success Criteria

Geographic

DemographicAge, gender, family size and life cycle, or income

PsychographicSocial class, lifestyle, or personality

BehavioralOccasions, benefits, uses, or responses

Nations, states, regions or cities

Segmentation Criteria


Segmentation CriteriaGeographic variables

region of the world or country, East, West, South, North, Central, coastal, hilly, etc.

country size/country size : Metropolitan Cities, small cities, towns.

Density of Area Urban, Semi-urban, Rural. climate Hot, Cold, Humid, Rainy.


Demographic Criteria Demographic variables

age gender sexual orientation family size family life cycle education income occupation education socioeconomic status religion nationality/race language


Psychographic Criteria

Psychographic personality life style value attitude


Behavioral CriteriaBehavioral variables

benefit sought product usage rate brand loyalty product end use readiness-to-buy stage decision making unit profitability income status


Market Segmentation Process1. Determine the characteristics of

segments in the target market & separate these segments in the market based on these characteristics.

2. Verify the market segments size if adequate enough to support the organization's product.

3. Develop a marketing strategy to target this market.


Selecting the Market Segment or Target Market

Single Segment

M1 M2 M3

P1

P2

P3


Selective Segment

M1 M2 M3

P1

P2

P3


Product Specializatio

n

M1 M2 M3

P1

P2

P3

Market Specializatio

n

M1 M2 M3

P1

P2

P3Full

CoverageM1 M2 M3

P1

P2

P3

PositioningDefinition: manipulating the 4 P’s so that

the product offers a distinct place in the minds of the customer

How the target market perceives/views your product. Your image in the target market’s mind

1. Identify Basesfor Segmenting the Market

2. Develop Profilesof Resulting Segments

3. Develop Measuresof Segment Attractiveness

4. Select TargetSegment(s)

5. Develop Positioningfor Each Target Segment

6. Develop MarketingMix for Each Target Segment Market

Positioning

MarketTargeting

Market Segmentation

Market Segmentation Process


Mass MarketingSame product to all consumers

(no segmentation)

Mass MarketingSame product to all consumers

(no segmentation)

Segment MarketingDifferent products to one or more segments

(some segmentation)

Segment MarketingDifferent products to one or more segments

(some segmentation)

MicromarketingProducts to suit the tastes of individuals or locations

(complete segmentation)

MicromarketingProducts to suit the tastes of individuals or locations

(complete segmentation)

Niche MarketingDifferent products to subgroups within segments

( more segmentation)

Niche MarketingDifferent products to subgroups within segments

( more segmentation)

Levels of Segmentation


By. Prof. Raghavendran Venugopal

End of the Module 3


Marketing Management, VTU, Module 3 revised

Education

Transcript of Marketing Management, VTU, Module 3 revised