NILAMADHAB MOHANTY

CIMP
 How can a company divide a market into segments?
 How should a company choose the most attractive target
markets?
 What are the requirements for effective segmentation?
 SEGMENTATION
 Dividing market into well defined slices
 Similarity within segment and differences between segments

 MARKET SEGMENT
 A group of customers who share similar set of needs and wants

…. Marketer’s
task is to identify the
appropriate number and nature of market
segments and decide which one (s) to target.
 Homogeneous preferences
 market in which all of the consumers have roughly the same preference,
so there are no natural segments
 Diffused preferences:
 consumer preferences may be scattered throughout the space
indicating great variance in consumer preferences.
 One brand might position in the center to appeal to the most people; if
several brands are in the market, they are likely to position throughout
the space and show real differences to reflect consumer-preference
differences
 Clustered preferences:
 The market might reveal distinct preference clusters, called natural
market segments
 Geographic
 Demographic
 Behavioral
 Psychographic
 GEOGRAPHIC SEGMENTATION
 Divides markets into geographical units
 Nations, states, Regions, cities
 Rural vs. Urban
 DEMOGRAPHIC SEGMENTATION
 Age and life cycle
 Life stage
 Gender
 Income
 Generation
 Millenials (or Gen Y) : 1977-1994
 Gen X : 1964-1978
 Baby boomers : 1946-1964
 Silent generation : 1925-1945
 Social class
Dividing buyers into groups on User and usage related variables
the basis of their knowledge of,
attitude toward, use of , or  Occasions
response to a product  Benefits
Decision Roles : people play 5  User Status
roles in buying decision
 Non users, exusers, potential users,
 Initiator first time users, and regular users
 Influencer  Usage Rate
 Light, medium or heavy product
 Decider usages
 Buyer  Buyer-Readiness
 User  Loyalty Status
 Hard core loyals, split loyal, shifting
loyals, switchers
 Attitude
 Enthusiastic, positive, indifferent,
negative, hostile
 Aware
 Ever tried
 Recent trial
 Occasional user
 Regular user
 Most often used
 Hard core
 Consumers who buy only one brand all the time

 Split loyals
 Consumers who are loyal to two or three brand

 Shifting loyals
 Consumers who shift loyalty from one brand to another

 Switchers
 Consumers who show no loyalty to any brand
 Lifestyle
 E.g. Marketing badminton shuttle vs. Bean bag

 Personality
 E.g. woodland shoes

 Values
 Marketing toilets to people in rural Bihar
 Marketers evaluate each segment to determine how many and
which ones to target and enter
 Consider two factors:
 The segment’s overall attractiveness
 Size, growth, profitability, scale economies, and low risk
 The company’s objectives and resources
 Marketers use a three-step procedure for identifying market
segments:
 Survey stage.
 Exploratory interviews and focus groups to gain insight into customer
motivations, attitudes, and behavior.
 Collect data on attributes and their importance ratings, brand awareness and
brand ratings, product-usage patterns, attitudes toward the product category,
and respondents’ demographics, geographics, psychographics, and
mediagraphics
 Analysis stage.
 Factor analysis to the data to remove highly correlated variables, then applies
cluster analysis to create a specified number of maximally different segment
 Profiling stage.
 Each cluster is profiled in terms of its distinguishing attitudes, behavior,
demographics, psychographics, and media patterns, then each segment is
given a name based on its dominant characteristic.