Evaluation of segmentation. Example Reference standard & segmentation.
Segmentation
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Market Segmentation
With a large countryMany different types of people
- it is too difficult to create a product that will satisfy everybody, that is why we focus on a segment of the total market
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Market Segmentation Defn
“Grouping people according to their similarity related to a particular product category”
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Market SegmentationCharacteristicsagegendergeographic locationincomespending patternscultural backgrounddemographicsmarital statuseducationlanguagemobility
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Market Segmentation4 commonly used bases for Segmentation
Descriptive
geographic location
demographic
Behavioural
psychographic
benefits
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Basis for Market SegmentationSlide 3-7
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Market Segmentation
geographic location - based upon where people live[ a popular way of dividing markets)
demographic - based upon age, gender and income level (very often used)
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Market Segmentation
Psychographic / lifestyles - based on people’s opinions, interests, lifestyles
benefits - based on the different expectation that customers have about what a product/service can do for them
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Geographic Segmentation
The reason why we study geographic segmentation is because WHERE people live has a big effect on their consumption patterns.
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Demographic Segmentation
Demographic Segmentation is the most common approach to Market Segmentation
Variables are:
• age
• gender (male/female)
• income
• occupation
• education
• household (family - style) size
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Demographic Segmentation
Demographic Segmentation is the most common approach to Market Segmentation
Variables are:
• gender (male/female)gender (male/female)
•gender is an obvious way to divide the market into segments since so many products are gender-specific
• clothing
• medical products
• sports products/services
• entertainment Examples ??
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Demographic Segmentation
Demographic Segmentation is the most common approach to Market Segmentation
Variables are:
age
• age is another obvious way to divide the market into segments since so many products are based upon “time of life”
Examples ??
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Demographic Segmentation
age
• also, people have different consumption patterns at different ages
Examples ??
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Demographic Segmentation
Demographic Segmentation is the most common approach to Market Segmentation
• Segmenting by the “stages in the family life cycle
• There are different buying characteristics of people in each stage of the family
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Demographic Segmentation
•household (family - style) size
BUYING PATTERNS
• 0-5 young children
• 6-19 school children
• 20-34 young adults
• 35-49 younger middle-aged
• 50-64 older middle-aged
• 65+ seniors
• 80+ SUPER seniors
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Demographic Segmentation
•household (family - style) size
FAMILY LIFE CYCLE STAGES
a. Young Single
b. Young Married with no Children
c. Young - married with children
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Demographic Segmentation
•household (family - style) size
FAMILY LIFE
c. married with children
d. divorced with children
e. married without dependent children
f. divorced without dependent children
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Demographic Segmentation
•household (family - style) size
FAMILY LIFE CYCLE STAGES
5. Older
a. older married
b. older unmarried (divorced, widowed)
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Demographic Segmentation
Demographic Segmentation is the most common approach to Market Segmentation
Variables are:
• age
• gender (male/female)
• income• occupation
• education
• household (family - style) size
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Demographic Segmentation
income
Segmenting markets on the basis of income and expenditure patterns
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Psychographic Segmentation
“The use of psychological attributes, lifestyles and attitudes in determining the behavioral profiles of different customers”
The use of detailed information to understand differences in what people buy
psychological
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Psychographic Segmentation
Psychographic profiles on a target market segment are obtained by doing a lot of questionnaires and surveys to ask people if they agree/disagree with certain statements made about particular activities, interests or opinions
AIO - activities, interests, and opinions
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Benefit Segmentation
“It is based on the Attributes (characteristics) of products, as seen by the customers”
example, people buy something because it causes a benefit
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Benefit Segmentation
“Many marketers now consider benefit segmentation one of the most useful methods of classifying markets”
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Segmentation Bases for Industrial MarketsSlide 3-12
Segmentation for Industrial Markets
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Geographic Segmentationuseful for the automotive industry
Product Segmentationie. Special parts and components
Segmentation by End-Use Applicationie. Paint mfg. Paint for waterproof
applications, paint for rust prevention, paint which sticks to glass
Segmentation for Industrial Markets
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Pharmaceutical SegmentationPharmaceutical segmentation can be done for
four categories of products.The first is for consumer or prescription products. Second for Institutional market products. Third, the Industrial market products and finally OTC (Over the counter) or non prescription products.
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Pharmaceutical SegmentationFor pharmaceutical companies what is
important is the prescription markets. pharmaceutical market for prescription can be sub divided into two categories:1. Doctors or Intermediate Customer2. Patients or consumer
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Pharmaceutical Segmentation1. Segmentation on the bases of
Intermediate customer (Doctor):Doctors can be classified on the basis of their a. Age (Old Doctors, Young Docotrs, Interns), b. Speciality (Cardiologists, Diabetologists, Orthopedician, Opthalmologist etc.) c. Place of Practice (Urban, Rural, Govt Hospitals, Private clinics)
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Pharmaceutical Segmentation) d. General Practitioners e. Type of
Practice (Prescribing/Dispensing) f. Usage rate of products (heavy users, light users, medium users, non users)A company need to look into so many factors because these factors would help a company to effectively plan and decide its marketing strategy.
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Pharmaceutical Segmentation2. Segmentation on the bases of consumers:
Patients can be categorized as a. Patients with similar kind of illness e.g..
diabetic patients b. Patients with similar stage of illness (acute illness / chronic illness) c. Patients according to their age group (pediatric patients, geriatric patients, young patients etc.) d. Patients according to their gender (male and female patients)
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Pharmaceutical SegmentationInstitutional market comprises of large
hospitals who purchase in bulk and directly from the companies. Pharmaceutical companies need to identify the profitable hospitals on the basis of their size and how much business they can generate. Some companies have a separate department or division to cater to the needs of institutional market..
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Pharmaceutical SegmentationIndustrial market comprise of buyers of bulk
drugs or active pharmaceutical ingredients. It also includes pharmaceutical machinery suppliers
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Pharmaceutical SegmentationOTC market includes consumer who
purchases certain medicines that do not require a prescription from doctor.