MARKET SEGMENTATION

BY-AMIT R RAJAK

TOPIC

What is MARKET?

A market is a place which allows the purchaser and the seller to invent and gather information’s and lets them carry out exchangeof various products and services. In other words the Meaning of Market refers to a place where the trading of goods takes place. The place can be a market place or a street market.

Total population

Felt need

Interested

Money to Buy

Willingness to spend

Market

• CONCEPT AND DEFINITION

The concept of market segment is based on the fact that the market of commodities are not homogeneous but they are heterogeneous. Market represent a group of customer having common characteristics but two customer are never common in their nature, habits, hobbies income and purchasing techniques.

According to Philip kotler , “ Market segmentation is sub-dividing a market into distinct and homogeneous subgroups of customers, where any group can conceivably be selected as a target market to be met with distinct marketing mix.”

Market Segmentation is a method of “dividing a market (Large) into smaller groupings of consumers or organisations in which each segment has a common characteristic such as needs or behaviour.”

It is the Consumer who are Segmented, Not Product, nor PriceIt would be useful to provide one important clarification right at the

beginning. Markets, sometime, speaks of product segments and price

segments and use these expressions as synonymous with market

segments. This can leads to a wrong understanding of what market

segments, or for that matter, the process of market segmentation as a

whole, actually connote. We have to be clear that in market

segmentation, it is the consumers who are segmented, not the product,

nor price. Market is about people who consume the product, not about the

product that’s gets consumed. For example, in segmentation of the

passenger car market, it is not the passenger cars (product) that are

segmented, but it is the consumer/buyer of car that is segmented.

Example: Titan WatchesArrives in three broad SegmentsThe RichThe MiddleThe Lower

For the Gold lovers

Titan offered to this segment an all gold watch- the Aurum and Royal lines.

•For the More than One Segments:

Titan made those who wanted more than one watches into a

separate segment ad tempted them by offering a wide range

of models. It offered them matched one’s dress and

occasions.

•For the youth /the outdoor lovers:

Titan viewed them as a lifestyle segment and offered them the fast track.

Market can be segmented using several bases

Market

Segmentation

Geographic

Buying BehaviorPsycho-graphics

A market/ consumer population for a product can be segmented using several

relevant bases. The major ones include:

•Geographic

•Demographics

•Socio-cultural

•Psychographic

Buying BehavioR

Geographic SegmentationSegmentation of consumer based on factors like climate zone, continents/ country, region, state, district, and urban/rural area, constitutes geographic segmentation. Marketer, who operate globally, often segment the market segments the market by continents/country/region in the first instance, and then go for segmentation on other bases. National markets within a country like India, often segment the market by region, state, district and urban/rural area, in the first instance, and then go for segmentation on other bases.

Example: Southern are found of coffee and north Indians like

Tea. . When we sale our product to international market. Products are made according to their need. Rasna international gives instant syrup when dissolves in glass of water, and does not contain a lot of sugar. Complexion creams like fair and lovely sells only in India.

Demographic segmentationSegmentation of consumer based on variables such as race, religion, community, language, age, stage in family cycle, gender, marital status, family size, occupation, economic position/income/purchasing capacity level, and social status ,of the consumer demographic segmentation.

Age: It is essentially a case of age based segmentation of a market.

Example: Amul has segmented his product in different age group

For kids: Amul kool, chocolate milk, Nutramul energy drink. For Youth: Amul cool kafe.

For women’s and older people: Amul calci+, Amul Shakti energy drink

Gender: Gender is another key variable/base under demographic segmentation. There is substantial evidence that men and women differ in buying behavior and it their persuasive messages. Women tend to be slower to make decisions and exhibit greater uncertainty about their decisions. And, they are also more persuadable.Example: Adidas targets women in India

German shoe maker Adidas is trying to develop the women segment in India for its products.

Emami segmented its product in gender

Women’s: Naturally fair

Men: Fair and handsome

Purchasing capacity: In the segmentation context of several elements of demographic, purchasing capacity is perhaps the most significant one. Buyer’s preferred price range is often related to purchasing capacity

MICROMAX

Socio-Cultural FactorsCulture and social class are the two main bases of segmentation here.Culture: Culture influence consumer behavior, deeply. A given culture brings in its own unique pattern of social conduct. A person usually acquires his cultural attributes right at his childhood. Culture includes religious, caste, traditional, language, pattern of social behavior etc.

Social Factor: Social group of varying types exert influenced on the consumer.

Social group include family, peer group, close colleges. They adopt their common life style.The influences of cultural and social factor are on consumer behavior. So products are segmented on the basis of social and cultural factor.

Example: Zee Televisions deals with variety of channels regional channel, sports

channel, movie channel.

McDonald has both veg and non veg burger. McDonald has veg burger for vegetarian and nonveg burger for non vegetarian.

Psychographic segmentation Psychographic Segmentation groups customers according to their life-style and buying psychology. Many businesses offer products based on the attitudes, beliefs and emotions of their target market. The desire for status, enhanced appearance and more money are examples of psychographic variables. They are the factors that influence your customers' purchasing decision. In psychographic segmentation, elements like life style, attitude, self-concept and value system, form the base.

Life style: Just as purchasing capacity forms a major base under

demographic segmentation, life style forms a major base under psychographics segmentation.Example:

Café Coffee Day

They choose lifestyle oriented, urban consumers as target with youth.They make coffee an ‘experience’ and provide a special experience to chosen segment. The CCD are targeting students ages of 15 to 24 years and trying to establish a space in their lives.

Buying Behavior Segmentation

Markets can be segmented on the basis of buyer behavior as well. Since all Segmentation is in a way related to buyer behavior, one might be tempted to ask why buyer behavior-based segmentation should be a separate method. It is because there is some distinction between buyer’s characteristics that are reflected by their geographic, demographic and psychographic profiles, and their buying behavior. Marketers often find practical benefit in using buying behavior as a separate segmentation base in addition to bases like geographic, demographics, a psychographics.The primary idea in buyer behavior segmentation is that different customer groups expect different benefits from the same product and accordingly, they will be different in their motives in owing it and their behavior in buying it. Variables of buyer behavior are:-

Benefit sought: - Quality / economy / service / look etc of the product.

example: Nestle has found a separate segment atta noodles as distinct from the maida noodles. Usage rate: - HeaEvy user / moderate user / light user of a product.User status: - Regular / potential / first time user / irregular /occasional.Loyalty to brand: - Hard core loyal / split loyal / shifting / switches.Occasion: - Holidays and occasion stimulate customer to purchase products.Attitude toward offering: - Enthusiastic / positive attitude / negative attitude / indifferent / hostile.Example: Shampoos, soap and all FMCG products buying behavior segmentation is used.

REFFERENCE1)SLIDE SHARE2)MARKETING MANAGEMENT (13TH

EDITION) BY PHILIP KOTLER

QUESTION ???????

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