Market Segmentation and Segmentation Strategies

7/28/2019 Market Segmentation and Segmentation Strategies

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Market Segmentation and

Segmentation Strategies

A market segment is a specific group

of customers with unique customer

needs, purchase behaviors, and

identifying characteristics


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P = ProductM = Market

Single-segmentconcentration

P1

P2

P3

M1 M2 M3

ProductspecializationM1 M2 M3

P1

P2

P3

SelectivespecializationM1 M2 M3

P1

P2

P3

Selecting and Entering Market Segments


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P = ProductM = Market

Marketspecialization

P1

P2

P3

M1 M2 M3

Full marketcoverage

M1 M2 M3

P1

P2

P3

Selecting and Entering Market Segments

(cont)


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Seg C2

Seg C1

Segmentation Strategies

Seg B3

Seg B1

Seg B2

Mass

Market

SegmentA

Large

Segment

SegmentA

Segmen

tB

Adjacent

Segment

SegmentA

Segmen

tB

Seg C

Multi-

Segment

Seg C

Small

Segment

Seg C2

Niche

Segment

Seg A1

Seg A2

Seg A3

Seg A5

Seg A4

Mass

Custom-

ization


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Perceptual Map

. Meisterbrau

#8

N=15

Miller.

Regular Premium

Hearty

Light

. Budweiser

Schlitz .. Blatz

Pabst.Falstaff.Hamms .

#4

N=43

#5

N=32

#1

N=82

#3N=52

#2

N=79

#6

N=39

#7

N=30


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Forces that Shape Consumer

Market Needs

Age, gender, family

structure, income, socialclass, race & geography

1. Demographic

2. Lifestyle

Attitudes, values,

activities, interests

Segmentation is the Process of Dividing a Larger Marketinto Smaller Pieces Based on One or More Characteristics.

3. Usage

Quantity, time of use,frequency of use


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Region

Size of city, country or

standard metropolitan

statistical area

Population density

Climate

Pacific; Mountain; West North

Central; East North Central; East

South Central; South Atlantic;

Middle Atlantic; New England

Under 5,000; 5,000-19,999; 20,000-

49,999; 50,000-99,999; 100,000-

249,999; 250,000-499,999; etc

Urban, suburban, rural

Warm, cold

1. Geographic Segmentation

1. Demographic (Age, gender, family structure, income, social class, race & geography)


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Age

Gender

Family size

Income

Occupation

Under 6; 6-12; 13-19; 20-29; 30-39;

40-49; 50-59; 60+

Male; Female

1-2; 3-4; 5+ persons

Under $15,000; $15,000-$24,999;

$25,000-$34,999; $35,000-$49,999;

Over $50,000

Professional; craftspeople, foremen;farmers; retired; students;

homemakers; unemployed; etc...

1. Demographic Segmentation


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18-24 107 141 120 94 110 50 35 99

25-34 115 118 117 110 119 76 45 116

35-49 103 104 108 125 135 110 74 173

50-64 92 84 87 93 85 126 125 95

> 65 67 49 60 62 39 114 271 65

CarWax

Frozen

Yogurt

Pizza

Metal

Polish

Laxative

s

Diarrhea

Remedies

Beer, Ale

Male Female

PROPENSITY TO CONSUMEPRODUCTS BY AGE CATEGORY


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Sensory IndependentSegment Sociables Worriers Segment

Brands Colgate, Macleans, Crest Brands

Favored Stripe Plus White, on sale

Ultra Brite

Demo- Children Teens, Large Men

graphic Young families

Strengths people

Principal Flavor, Brightness Decay Price

Benefit Product of teeth prevention

Sought appearance

2. Lifestyles (Attitudes, values, activities, interests)

Interests: Benefit Segmentation of theToothpaste Market


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Work Family Themselves Age

Hobbies Home Social issues Education

Social events Job Politics Income

Vacation Community Business Occupation

Entertainment Recreation Economics Family size

Club membership Fashion Education Dwelling

Community Food Products GeographyShopping Media Future City size

Sports Achievements Culture Life cycle stage

Activities Interests Opinions Demographics

2. Lifestyles

Psychographic Categories


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BELIEVERS

ACHIEVERS EXPERIENCERS

STRIVERS MAKERS

Low Resources

High Resources

ActionOriented

StatusOriented

PrincipleO

riented

FULFILLEDS

STRUGGLERS

SRI Consultings Values andLifestyle System (VALSTM)

ACTUALIZERS

VALS2


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VALSTM SEGMENTPERCENT OF

POPULATION

Actualizer

10.5

11.7%

Struggler

Maker

Experiencer

Striver

Achiever

Believer

Fulfilled

9.5

12.0

12.9

11.8

14.7

17.0

Successful, sophisticated, active, high self-esteem, and

abundant resources

Mature, satisfied, comfortable people who value order,knowledge and responsibility

Conservative, conventional people with concrete beliefs

and strong attachments to traditional institutions

Successful career and work-oriented who control their

lives

Seek motivation, self-definition and approval from theworld around them

Young, vital, enthusiastic, impulsive and rebellious

Practical people who have constructive skills and value

self-sufficiency

Chronically poor, ill-educated, low skilled, withoutstrong social bonds

VALSTM Segment as Percent ofthe United States Population


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Media usage

Specific media usage

Payment method

Loyalty status

Usage rate

User status

Usage situation

Newspaper; magazine; TV; Internet

Sports I l lustrate; L ife; Cosmopoli tan

Cash; Visa; MasterCard; American

Express; checkNone; some; total

Light; medium; heavy

Nonuser; ex-user; current user;potential user

Work; home; vacation; commuting

Usage Segmentation

3. Usage (Quantity, time of use, frequency of use)


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Cola 22% 39% 39% 0% 10% 90%

Bourbon 59% 20% 21% 0% 11% 89%

Beer 67% 16% 17% 0% 12% 88%

Dog Food 67% 16% 17% 0% 13% 87%

RTE Cereal 4% 48% 48% 0% 13% 87%

Shampoo 18% 41% 41% 0% 19% 81%

Percentage of Population Volume

Non Light Heavy Non Light Heavy

Users Half Half Users Half Half

Heavy-Half Segmentation


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I like to play poker 18 37 41

I would rather spend a quiet evening

at home than go out to a party 67 53 44

I smoke too much 29 40 41

I would like to be a pro football player 10 15 21I would do better than average in

a fist fight 17 26 32

I go to church regularly 57 37 31

Beer is a real mans drink 9 16 44

Playboy is one of my favorite magazines 11 21 28

I am a girl watcher 33 47 54

Men are smarter than women 22 27 31

Non Light Heavy

Users Users Users

Percentage of AgreementMale Beer Drinkers


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Catsup Unmarried or married over Under 50, 3 or more 7.8

age 50 without children children

Consumption

Product Light Buyers Heavy Buyers Multiple

Beer Under 25 or over 50, Between 25 & 50, not 40.0

college educated, college grad, TV more

nonprofessional, TV less than 3.5 hours

than 2 hours

Candy Under 35, no children 35 or over, 3 or more 21.9

Bars children

Frozen Under 35 or over 65, College grads, 8.0

Orange not college grads, between 35 and 65

Juice 2 or fewer children

Usage Rates


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Forces that Shape Business

Market Needs

Firmographic Forces

Number of employees

Sales volume

Number of locations

Years in business

Financial situation

Business Culture

Business sophistication

Growth orientation

Innovativeness

Technology

Decision making

Usage Behaviors

Application

Quantity

Time of purchase

Frequency of purchase

Users


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Segments are largeenough to be profitable.

Large Enough?

Size and purchasing power

can be measured.Able to be Measured?

Members are similar, butdifferent from others

Similar, but Different?

Reachable? Marketing communications

can reach the segment.

Serve the Needs? Marketer can serve theneeds of the segment.

Targeting: Evaluating Market

Segments

Market Segmentation and Segmentation Strategies

Documents

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