Submitted
By
Fahad Bin Alfaz (Aesheak)
Consumer Behavior 541E
School of Business
ID-0110155
Market segmentation
Abstract:
It is important to remain creative when conducting segmentation research, as many
different ways to segment a market can exist. Five main bases are discussed:
geographic, demographic, psychographic, behaviouristic and image. This is followed by
an overview of the main techniques used to establish and verify segments, including
automatic interaction detector, conjoint analysis, multidimensional scaling and canonical
analysis. Segmentation yields positive results only if the right segment is chosen. While
choosing a target segment care should be taken that the segment is measurable
(quantifiable in terms of market size), substantial (commercially viable), accessible
(easy to reach and address to), and differentiable (different in some way from the other
segments).
Details:
Market segmentation is the process of dividing the market on the basis of certain major
factors - geography, demography, psychology, psychographics, socio-culture factor,
use-related factor, use-situation factor, and benefits, or on multiple factors like
psychographic-demographic segmentation, geodemographic segmentation, and SRI
Consulting's
VALS.
Geographic segmentation involves segmenting consumers on the basis of region,
climate, size of city, and density of population. Demographic segmentation involves
segmenting consumers on the basis of demographic variables like age, sex, marital
status, education, occupation, and income. Psychological segmentation involves
segmenting the market on the basis of psychological variables like motivation,
personality, attitude, perception, and learning.
Psychographic segmentation divides consumers on the basis of difference in lifestyle,
attitude, interest, and opinions. Socio-cultural segmentation divides consumers on the
basis of culture, sub-culture, cross-culture, religion, social class, and family life cycle.
Use-related segmentation divides consumers on the basis of usage rate, awareness
status, and brand loyalty. Use-situation segmentation involves segmenting consumers
on the basis of time, objective, location, and person. Benefit segmentation segments
consumers on the basis of the benefit they seek like prestige, confidence, health,
nutrition etc.
Big marketers, at times, may also employ a full market coverage strategy, which may
further be differentiated (different marketing mix for different products) or
undifferentiated (single marketing mix for all products). Sometimes marketers adopt too
many micro segments, which later become redundant. In such a case, all segments are
clubbed together with a single marketing mix (counter segmentation) Actually market
segmentation is the process of dividing the market on the basis of certain major factors,
which are given below in details -
Socio-cultural segmentation
Sociocultural segmentation combines social (related to groups) and cultural variables
(related to the shared values, beliefs, attitudes of people) that provide further basis for
segmentation. Segmentation is a division into segments. Sociocultural segmentation
combines social (related to groups) and cultural variables (related to the shared values,
beliefs, attitudes of people) that provide further basis for segmentation. Consumer
behavior is mostly influenced by the below given factors:
Cultural Factor
Social Factor
Personal Factor
Psychological Factor
Marketing mix
Brand
Social Factors :
Consumer behavior is also influenced by social factors, such as
Groups
Family
Roles and status
Groups :
Group means when two or more people who interact for accomplishing individual or
mutual goals. A person's behavior can be influenced by many small groups. Groups
that have a direct influence and to which a person belongs are called membership
groups. Some are primary groups includes family, friends, neighbors and coworkers.
Some are secondary groups, which are more formal and have less regular interaction.
These include organizations like religious groups, professional association and trade
unions.
Family:
Family members can strongly influence buying behavior. The family is the most
important consumer buying organization in the society. Marketers are interested in the
roles, and influence of the husband, wife and children on the purchase of different
products and services.