Market segmentation presentation By Asif Nawaz Afridi
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Transcript of Market segmentation presentation By Asif Nawaz Afridi
Asif Nawaz Afridi
What is Market Segmentation?The process of breaking of buyers into
groups that are different from each other but internally similar
Applicable any marketing situation: Business to business, business to consumer, not-for-profit, politics
Why segment?Starts from the premise that all buyers are
not the same: profit/volume potential, motivations, product uses, needs and desires, etc.
Segmentation allows you to chose which buyers to target and provides important insights as to how to appeal to them.
Significant competitive advantage
Market SegmentationCharacteristicsagegendergeographic locationincomespending patternscultural backgrounddemographicsmarital statuseducationlanguagemobility
Market Segmentation4 commonly used bases for Segmentation
Descriptivegeographic location demographic
Behaviouralpsychographicbenefits
Figure 3.1 Bases for Market SegmentationSlide 3-7
Market Segmentationgeographic location - based upon where people live
(historically a popular way of dividing markets)
demographic - based upon age, gender and income level (very often used)
Market SegmentationPsychographic / lifestyles - based on people’s
opinions, interests, lifestyleseg, people who like hard rock music probably prefer beer to wine
benefits - based on the different expectation that customers have about what a product/service can do for themeg. People who want to but “lite” food cause it will help them lose weight
Geographic Segmentation
The reason why we study geographic segmentation is because WHERE people live has a big effect on their consumption patterns.
Additionally, WHERE people live in a city is also a reflection of their income level and we can make certain assumptions about their ABILITY TO SPEND.
This helps people plan store locations and the location of other services.
Demographic Segmentation
Demographic Segmentation is the most common approach to Market Segmentation
Variables are:
• age
• gender (male/female)
• income
• occupation
• education
• household (family - style) size
Demographic Segmentation is the most common approach to Market Segmentation
Variables are:
• gender (male/female)gender (male/female)
•gender is an obvious way to divide the market into segments since so many products are gender-specific
• clothing
• medical products
• sports products/services
• entertainment
Demographic Segmentation is the most common approach to Market Segmentation
Variables are:
age
• age is another obvious way to divide the market into segments since so many products are based upon “time of life”
• diapers for babies
• toys for children
• entertainment for “over 18”
Demographic Segmentation is the most common approach to Market Segmentation
Variables are:
•household (family - style) size
• Segmenting by the “stages in the family life cycle”
• There are different buying characteristics of people in each stage of the family
•household (family - style) size
BUYING PATTERNS
• 0-5 young children
• 6-19 school children
• 20-34 young adults
• 35-49 younger middle-aged
• 50-64 older middle-aged
• 65+ seniors
• 80+ SUPER seniors
income Segmenting markets on the basis of income and expenditure patterns. Income is possibly the most common basis for segmentation
Upper High ClassHigh ClassUper Middle ClassMiddle ClassLower Middle Class
Toyota • Lexus for high end • Camry for the middle of the roaders • Corolla for low end HUL soaps - Dove for high end, Hamam
Psychographic Segmentation
“The use of psychological attributes, lifestyles and attitudes in determining the behavioral profiles of different customers”
Psychographic Segmentation
Psychographic profiles on a target market segment are obtained by doing a lot of questionnaires and surveys to ask people if they agree/disagree with certain statements made about particular activities, interests or opinions
AIO - activities, interests, and opinions
Behavioural Segmentation
On the basis of occasions, product usage, benefits sought, brand loyalty
Occasions • Y2K Cruises • Hallmark Cards • a greeting card for every occasion - Valentine’s Day Card, Deepavali card
Thank you