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Segmentation

STP Process1. Identify segmentation

variables & segment the

market

2. Develop Profiles of

resulting segments

3. Evaluate the attractiveness

of each segment

4. Select the target segments

5. Identify possible positioning

concepts for each target

segment

6. Select, develop, and

communicate the chosen

positioning concept

Market Segmentation

Market Targeting

Market Positioning

Market Segmentation

Dividing a market into distinct groups with

distinct needs, characteristics, or behavior

who might require separate products or

marketing mixes.

Market

Segmentation

More precise

definition of customer

needs & wants

More Accurate

marketing

objectives

Improved

resource

allocation

Better Marketing

results

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Market Segments & Niches

Market Segments are large identifiable

groups within a market, within the car

market buyers seeking basic

transportation, high performance

A niche is a more narrowly defined group

which seeks a special combination of

benefits,

Bases For Segmenting ConsumerMarkets

GEOGRAPHIC

DEMOGRAPHIC

PSYCHOGRAPHIC

BEHAVIORAL

Geographic Segmentation

Dividing the market into different

geographic units such as nations, states,

regions.

Ex- State-wise, City-wise

Rural Vs Urban markets

South Vs North

Demographic Segmentation

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Basis is demographic variables such as

age, gender, family size, family type,

family life cycle, income..

Age and life cycle stage, Wants and

capacities change with age

Ex- Life Insurance Schemes, For young vs

old, Reverse Mortgage . Family Type, Joint Vs Nuclear.

Ex- DM is different , needs are different

Gender, Men Vs Women,

Ex- Working Women range from all major

cloth brands, Special products, within

financial services, Bank Accounts,

Income, is a long standing practice, TOP

of the pyramid Vs BOP markets..

Multiattribute Demographic

Segmentation, looking at combining two ormore demographic variables

Ex- Bank doing it by both age and income

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Psychographic Segmentation

Buyers are divided into different groups onthe basis of social class, lifestyle, and/or

personality

Social Class, A B C has a strong

influence on the persons preferences in

cars, clothing, home furnishing, leisure..

Lifestyle, product interests are influenced

by lifestyles. Infact goods they consumer

express their lifestyles.

Personality, brand personality &

consumer personality, sincerity,

ruggedness..

Behavioral Segmentation

Buyers are divided into groups on the

basis of their knowledge, attitude, use or

response to a product

Occasion, when they develop a need to

purchase or use a product

Ex- breakfast cereals, Horlicks, Festival,

marriage Benefits, A powerful form, based on the

benefits they seek from the product

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User Status, User, non-user, ex-user,potential user, first-time user, and regularuser

Usage rate, light , medium and heavyusers groups of products, many time theheavy users of a product have similardemographic, psychographic & mediahabits

Loyalty Status, Hard-core loyal, splitloyal, shifting loyal, switchers

Buyer-Readiness Stage, Unaware,aware, interested , intend to buy

Attitude, enthusiastic, positive, indifferent,negative and hostile.

Requirements for effective

Segmentation

MEASURABLE

SUBSTANTIAL

ACCESSIBLE

DIFFERENTIABLE

ACTIONABLE

Measurable The size, purchasingpower, and profile of the segments can bemeasured

Substantial Should be large & profitableenough to serve.

Accessible- can be effectively reached &served

Differentiable- conceptually

distinguishable and respond differently todifferent marketingmix elements andprograms

Actionable Effective programs can beformulated for attracting and serving thesegment

Market Targeting

Segmentation reveals the market-segmentopportunity that exist, now the companyhas to decide how many and which onesto target.

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Evaluating Market Segments

Segment Size & Growth, has it got theright size & growth characteristics. Rightsize is relative and growth is needed

Segment Structural Attractiveness,Porters 5 Force model, industrycompetition, supplier & buyer power, entrybarriers & substitutes

Company Obj & Resources, companylong term goals, competence to enter the

segment, only enter when you can offersuperior value

Selecting Target Markets Single-segment concentration, can work in

favor owing to greater knowledge of segments

needs, can also be risky

Selective Specialization, a no of segments are

selected, each objectively attractive &

appropriate given co resources & objs

Product Specialization, focus on a product

which sells across segments

Market Specialization, serving many needs of a

particular customer group

Full Market Coverage

Differentiation & Positioning

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Differentiation is the act of designing a set

of meaningful differences to distinguish the

companys offer from competition

Differentiation Variables

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Product Services Personnel Image

Features

Performance

Conformance

Durability

Reliability

Reparability

Style

Design

Delivery

Installation

Customer

Training

Consulting

Services

Repair

Misc.

Competence

Courtesy

Credibility

Reliability

Responsive

ness

Communica

tion

Symbols

Media

Atmosphere

Events

Positioning is the act of designing the

companys offering and image to

occupy a distinctive place in the mind

of the target market.