TOPIC 10

IDENTIFYING AND SELECTING MARKET SEGMENT

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Designing a Customer-Driven Marketing Strategy

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MARKET SEGMENTATION
Market
People or organizations with needs or wants and the ability and willingness to buy A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. The process of dividing a market into meaningful, relatively similar, identifiable segments or groups.
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Market Segment

Market Segmentation

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LEVELS OF MARKET SEGMENTATION

Same product to all consumers

Mass Marketing

(no segmentation, i.e Yakult)

Segment Marketing
Different products to one or more segments

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LEVELS OF SEGMENTATION
Niche Marketing
Focus on one market segment

(i.e. Oshkosh BGosh produces products for children)

Individual Marketing Tailoring products and programs to the needs of individual customers, i.e. Dell

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MARKET SEGMENTATION
Segmenting Consumer Markets

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SEGMENTING CONSUMER MARKETS

GEOGRAPHIC SEGMENTATION

Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, or cities
Different brand for different countries

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SEGMENTING CONSUMER MARKETS

DEMOGRAPHIC SEGMENTATION
Dividing the market into groups based on variables such as:

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Age Gender Family size or life cycle Income Occupation Education Religion Race

SEGMENTING CONSUMER MARKETS

PSYCHOGRAPHIC SEGMENTATION

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SEGMENTING CONSUMER MARKETS

BEHAVIORAL SEGMENTATION
Occasion Readiness stage Benefits

BEHAVIORAL SEGMENTATION
Loyalty status Usage rate User status

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BEHAVIORAL SEGMENTATION
Occasion segmentation:
Special promotions and labels for holidays and festival.
(E.g. serve Ribena on Hari Raya

Special products for special occasions.

(E.g. Haji Prepaid Sim card by Maxis)

Benefits sought:

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BEHAVIORAL SEGMENTATION
User status:
Nonusers, ex-users, potential users, first-time users, regular users ASTRO

Usage rate:
Light, medium, heavy

Loyalty status:
Brands, stores, companies

Buyer readiness stage

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SEGMENTATION BASE FOR ORGANISATIONAL MARKETS 1. Geographical area 2. Business type 3. Company size

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REQUIREMENTS FOR EFFECTIVE SEGMENTATION

Measurable Accessible Substantial Differential Actionable
profiles of segments can be measured.
Segments can be effectively Size, purchasing power,

reached and served.

Segments are large or

profitable enough to serve.

differently to different marketing mix elements & programs.

Effective programs can be

Segments must respond

designed to attract and serve the segments. 14

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MARKET TARGETING
Target market consists of a set of buyers who share common needs or characteristics that the company decides to serve

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MARKET TARGETING
Single Segment Concentration Focus on one segment E.g. Porsche Full Market Coverage Provide product on all consumer segment in the market Selective Specialisation Product different product for different market segment

FIVE MARKET FOCAL PATTERNS

Market Specialisation focus on one type of market

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Product Specialisation Focus on the production and distribution of one product

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