and Targets
Geographic Demographic
segmentation segmentation
Psychographic Behavioral
segmentation segmentation
Market Segmentation
Segmenting Consumer Markets
• Geographic segmentation divides the market into different
geographical units such as nations, regions, states, counties,
or cities
• Grassroots marketing, sometimes known as guerilla
marketing, starts from the ground up. concentrate on making
such activities as personally relevant to individual customers
as possible.
• Builds brand awareness from the ground up. Instead of
paying outside companies for expensive advertising, a
grassroots approach grows customer support organically
through word of mouth and good old-fashioned credibility.
• E.g.: Banks: Specialized Branches-Serve Big Corporate and
high net worth individuals…customized
Market Segmentation
Geographic segmentation
• Geographical markets also vary in their product
preferences and requirements…product inefficient
• Food habits changes
• Marketing to microsegments has become possible even for
small organizations as database costs decline, software
becomes easier to use, and data integration increases.
• http://www.censusindia.net/
• Shop outlets: Locations for new shop outlets can be
identified.
• Advertising: Areas for advertisement can be identified.
Segmentation can also reveal information for
advertisement media.
Market Segmentation
Geographic segmentation
• Product selection: Different geographic segments have
differing consumption patterns. Introducing different
products for different geographic segment can bring more
sales!
• Military recruitment: Military recruits have certain
demographic attributes. Focusing on geographic segments
with such profiles, military can find new recruits more
efficiently.
• Catalog sales: In catalog sales direct marketing, generally
demographic information of customers is not available.
Census information derived from geographic data can be
used to develop better customer segmentation and
predictive models
Market Segmentation
Segmenting Consumer Markets
Geographic Economic
location factors
Political- Cultural
legal factors factors
Market Segmentation
Segmenting Business Markets
Differentiable Actionable
Market Segmentation
Requirements for Effective Segmentation • High
and low
• High
and
High
• Low and
Low
• Low and
High
Market Targeting
• Target market consists of a set of buyers who share
common needs or characteristics that the company
decides to serve.
• Evaluating and Selecting the Target Market
Segments:
• Segment size and growth
• Segment structural attractiveness
• Company objectives and resources
• Eg: How well does a potential segment score on the
five criteria?
• Eg: Does investing in segment makes sense given
the firm’s objectives, competencies and resources?
Market Targeting
Strategic Criteria for Targeting Segments
Corporate
Strength Go for it! Hmm….
Hmm…. Avoid
Less Capable
Market is Market
attractive doesn’t look
promising
Market Targeting
Market Targeting
Competitive Analysis
High Quality
Low Quality
Segment 1 3% Few, Ok ?
3 weak
Segment 2 1% Few, No
4 weak
Undifferentiated marketing targets the whole market with
one offer (Big Firms)
– Mass marketing
– Focuses on common needs rather than what’s different
– Good when all consumers have roughly same
preferences and the market show no natural segments.
– Pros and Cons
Market Targeting
Target Marketing Strategies