Market segmentation
1. Identify bases for
segmenting the Target marketing
market. Market positioning
3. Develop measure of
2. Develop segment segment 5. Develop
profiles attractiveness positioning
(differentiation) for
4. Select target target segments.
segments.
6. Develop a
marketing mix for
each segment.
Dividing a market into smaller groups of
buyers distinct needs, characteristics, or
behavior who might require separate
products or marketing mixes
Buyers differ in
◦ Wants
◦ Resources
◦ Locations
◦ Buying attitudes
◦ Buying practices
Through market segmentation,
companies divide large,
heterogeneous (different) markets
into smaller segments that can be
reached more efficiently and
effectively with products and services
that match their unique needs
Buyers differ in
◦ Wants
◦ Resources
◦ Locations
◦ Buying attitudes
◦ Buying practices
Through market segmentation,
companies divide large,
heterogeneous (different) markets
into smaller segments that can be
reached more efficiently and
effectively with products and services
that match their unique needs
1)Facilitates proper choice of tgt market
Segmentation helps the marketer to distinguish one
customer group from another within a given market.
2)Adapting the offer to the target
Segmentation also enables the marketer to crystallize
the needs of the target buyers.
Ex:Ford modifies its models for the Indian target
segment.
Higher ground clearance to make the car more
compatible to the rougher road surface in India.
Stiffer rear springs to enable negotiating
the potholes on Indian roads.
Changes in cooling requirement with
greater airflow to the rear.
Higher resistance to dust
Comparability of engine with the quality of
fuel available in India
Location of horn buttons on the steering
wheel
3)Makes the marketing effort more efficient &
economic
Helps identify less satisfied segments and
concentrate them
4)Benefits the customer as well
Dividing a market into different
geographical units such as nations, states,
regions, Metros, cities or neighborhoods
Dividing the market into groups based
on demographic variables such as
age, gender, family size, family life
cycle, income, occupation, education,
religion, race and nationality
Most popular because our needs,
wants and usage rates depend on the
demographics
Dividing a market into different age
and life cycle groups
Kids (corn flakes), adults, magazines
(teen stuff)
Gender segmentation
Dividing a market into different groups
based on gender
Clothing, cosmetics, perfumes
Dividing the market into different
income groups
Cars, financial services
Dividing a market into different groups
based on social class, lifestyle or personality
characteristics
Dividinga market into groups
based on consumer
knowledge, attitude, use, or
response to a product
Occasion segmentation
Inter-segment Cooperation
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Market segmentation
1. Identify bases for
segmenting the
market. Target marketing
Market positioning
2. Develop segment 3. Develop measure of
profiles segment 5. Develop
attractiveness positioning
(differentiation) for
4. Select target target segments.
segments.
6. Develop a
marketing mix for
each segment.
The process of evaluating each market
segment’s attractiveness and selecting one
or more segments to enter
Segment size
Growth
Segment attractiveness
Company objectives and resources
Competitors
Buying power
Supplier power
Target market
◦ A set of buyers sharing common needs or
characteristics that the company decides to serve
Selecting the market segments
Single segment concentration
Selective specialization
Product specialization
Market specialization
Full market coverage
Undifferentiated Concentrated (niche) Differentiation
Strategy Strategy Strategy
One marketing mix One marketing mix Two marketing mix
for the whole market and one segment and 2 different
BMW segment
TOI
Single-segment Selective Product
concentration specialization specialization
M1 M2 M3 M1 M2 M3 M1 M2 M3
P1 P1 P1
P2 P2 P2
P3 P3 P3
Market Full market
specialization coverage
M1 M2 M3 M1 M2 M3
P1 P1
P = Product
M = Market P2 P2
P3 P3
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Customer Groups
Airlines Railroads Truckers
Large
Product Varieties
computers
Mid-size
computers
Personal
computers
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Selecting the market segments
Single segment concentration
Selective specialization
Product specialization
Market specialization
Full market coverage
Market segmentation
1. Identify bases for
segmenting the
market. Target marketing
Market positioning
2. Develop segment 3. Develop measure of
profiles segment 5. Develop
attractiveness positioning
(differentiation) for
4. Select target target segments.
segments.
6. Develop a
marketing mix for
each segment.
The way that product is defined by
consumers on important attributes - the
place the product occupies in consumer’s
minds relative to competing products
Stylish, prestigious, distinctive
Mercedes 400SE
Volvo 850R • • Porsche 914 •
TM3 TM2
Chrysler LHS • • Lexus LS400
Buick Park Avenue • • Jeep Grand Cherokee
Oldsmobile L35 • • Acura Integra
Dodge Neon •
Geo Metro •
Kia Sephia •
Practical, common, economical
Marketing mix: the set of controllable
tactical marketing tools: product, price,
place and promotion that the firm blends to
produce the response it wants in the target
market
Differentiation is the act of designing a set
of meaningful differences to distinguish the
company’s offering from the competitor's
offering
Product Differentiation:
Form
Feature
Performance
Durability
Reliability
Reparability
Style
Design
Services
Ordering ease
Delivery
Installation
Customer training
Customer consulting
Maintenance & repair
Miscellaneous
Personal
Competence
Courtesy
Credibility
Reliability
Responsiveness
Communication
Channel
Coverage
Expertise
Performance
Image
Symbols
Media
Atmosphere