Market Segmentation
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Transcript of Market Segmentation
Chapter : 8
Market Segmentation and Targeting
Objectives of the lesson
• Need for market segmentation
• Market segmentation levels
• The selection of segmentation
• Effective segmentation
• Target market selection process
Maruti Udyog Limited
• Maruti800• Alto • Zen• Wagon R• Versa• Esteem• Baleno• Swift
Market Segmentation
• Dividing the market by grouping
the customers with similar tastes,
preferences into one segment is
called segmentation
Market Segmentation Levels
• Segment marketing
• Individual marketing
• Niche marketing
• Local marketing
Market Segmentation Levels
• Segment marketing – Dividing the market into different segments on the basis of homogenous need.
• Segmented on basis of broad similarity with regard to some attributes
• Segmentation is also sometimes identifying, capturing & retaining potential new markets
Market Segmentation Levels• Individual marketing – Extreme
marketing in which marketers focus on individual customers.
• Keep track of individual tastes & preferences of individual customers
• Many companies are approaching individuals through e-mails to promote their products.
Market Segmentation Levels• Niche marketing – Marketers effort
to position their product or service in smaller markets that have similar attributes and have been neglected by other marketer
• Segment further divided into sub segments to cater unsatisfied needs of small group is called as niche.
Market Segmentation Levels• Local marketing – marketers
offer customized products to suit the local markets.
• THINK GLOBAL ACT LOCAL
• McDonald’s introduced Indianized products such as AlooTikka, Chicken, Patties, Paneer Salsa, Chicken Mexican...
Bases for Consumer Market Segmentation
Market Segementation
GeographicalRegions, cities,
states, countries
DemographicAge,
gender,income,
occupation,religion,
social class,family size
PsychographicLife style,
personality,values,beliefs
BehavioralOccasions,Benefits,
Usage rate,Loyalty status
Bases for Organizational Market Segmentation
Market Segementation
DemographicsOperating Variables
PurchasingApproaches
Situational
Personal Characteristics
Of thePurchaser
Bases for Organizational Market Segmentation
Demographics:Industry-Certain industry can segment their markets
IndustryFinancial service
Insurance firms Banks Stock brokerage firms
Company size Small & Large
Customer location Proximity
Bases for Organizational Market Segmentation
• Operating Variables:
Company technology
Product and brand use status
Customer capabilities
Bases for Organizational Market Segmentation
• Purchasing approaches:Organization’s purchasing function
Relationships among the buyers and sellers
General purchasing policies
Bases for Organizational Market Segmentation
• Situational factors
Urgency of order fulfillment
Product application
Size of the order
Effective Segmentation
• Measurable
• Substantial
• Accessible
• Differential
• Actionable
Target Market Selection Process
• Evaluating the Market Segments
• Selecting the Market Segments
Selecting the Market Segments
• Single Segment Concentration: Focusing on a single segment gives the marketer the advantage of high sales as all the efforts are concentrated on that one segment
Example: Mercedes concentrates on upper income group
Selecting the Market Segments
• Selective Specialization:
Process in which the company focuses its resources on a few segments and develops its expertise in fulfilling the needs of those segments
Selecting the Market Segments
• Product Specialization :The firm makes a certain product that it sells to
several segments
Example: Microscope manufacturer who sells to university, government, and commercial laboratories.
Selecting the Market Segments
• Market specialization:
The firm concentrates on serving many needs of a particular segment
Example: A firm sells assortment of product to university laboratories.
Selecting the Market Segments
• Full market coverage:
Company targets the full market rather than any specific segment.
Example: Hewlett-Packard targets the full market for its printers.
Other Consideration
• Ethical choice of market targets
• Segment interrelationships and super segments
• Segment-by-segment invasion plans
• Inter segment cooperation