MARKET SEGMENTATION AND

STRATEGIC TARGETING

WHAT IS MARKET SEGMENTATION?

Segmentation

MARKET SEGMENTATION
Market Segmentation is a method of dividing a market (Large) into smaller groupings of consumers or organizations in which each segment has a common characteristic such as needs or behavior. Marketers assume that consumers within segments should respond similarly to particular marketing actions. Consumer response should be different between different segments.

Why segment the market?

WHY SEGMENT THE MARKET?

Customers

have diverse needs, wants and buying behaviors which differ from other customers.

One

firm cannot satisfy everyones needs.

Organizations

have different strengths and competitive advantages in different areas. should focus on what they do best.

Marketers It

can create better marketing opportunities for organizations may be more profitable for organizations.

It

CONSUMER MARKET SEGMENTATION VARIABLES

Consumer market can be segmented through the following variables;

Geographic segmentation Demographic segmentation Psychographic segmentation Behavioral segmentation

GEOGRAPHICAL SEGMENTATION
Dividing

a market into different geographical units such as nation, province, regions, countries, cities and climate etc.

GEOGRAPHIC SEGMENTATION VARIABLES

Continents or World Regions-Africa, Asia, Europe Countries-Afghanistan US, Pakistan Province- kabul, Jalalabad, Herat City or Metro Size- under 5000 people, 5000-19,999 Climate- Tropical, Temperate, Cold.

DEMOGRAPHIC SEGMENTATION
Dividing

the market into groups based on demographic variables such as age, gender, etc.

DEMOGRAPHIC SEGMENTATION VARIABLES

Age Gender Family size Family life cycle Income Occupation Education Religion Race Generation Nationality

DEMOGRAPHIC SEGMENTATION

Age- Under 6 years old, 6-12, 13-19, 20-29,30-39,40-49,50+

Gender- Dividing a market into different groups based on gender (male/female).

For example- NIKE has recently capture the women sports shoes market.

Family life cycle- Single, Young married, Married with children

Income- Dividing a market into different income groups. (high, medium and low income groups)

For example Honda presenting Motor cycle for low income and car for high income groups.

Age(dominant factor):-Segmentation is done on the basis of age of person. Example Titan has segmented its product according to different age group of person. Titans product segmentation on the bases of age: Titan created a sub brand, Fastrack. These watches are specifically for young, vibrant, and cool outgoing young generation. While for older person and professional it has created the steel series watches and also the famous, Sonata.

Titan Fastrack ( for the younger segment)

Income (dominant factor):-Segmentation is done on the basis of income level of a person. Example of Titan watches can be citied such as Titan offered Aurum and Royale in the gold/ jewellery watch range with price ranges between Rs. 20000 to Rs.1 lakh.

TITAN NEBULA (LUXURY SEGMENT WATCH)

DEMOGRAPHIC SEGMENTATION

Occupation- employed, unemployed, self employed. Education- Grade school or less, high school, graduated from high school, post graduate from university, Doctorate. Religion- Muslims, Christens, Jewish, Buddhist.

Family Size- 1-2 persons, 3-4 persons, more than 4 persons

Nationality- Afghani, Pakistani, French, British, Canadian, Japanese.

PSYCHOGRAPHIC SEGMENTATION
Dividing

a market into different groups based on social class, lifestyle and personality characteristics etc.

PSYCHOGRAPHIC SEGMENTATION VARIABLES

Lifestyle- It may be different on the basis of income, community, religion etc. Different customers adopt different lifestyles.

Personality- There may be different personalities of customers like Calm, Dynamic, Aggressive

Social class- There are 3 major social classes i.e. Upper, Middle and lower class.

For middle segment, Titan offered Exacta range in stainless steel, aimed at withstanding the rigours of daily life. There were 100 models in the range. Price ranges within Rs500-700.

For the third segment, Titan offered the Sonata range. The price range was between Rs.350 to 500.

BEHAVIORAL SEGMENTATION
Dividing

a market into groups based on consumer use, knowledge, attitude or response to a product.

BEHAVIORAL SEGMENTATION VARIABLES

Occasions Benefits Attitude Toward the Product User Rates Loyalty Status Readiness Stage

BEHAVIORAL SEGMENTATION

Usage rate- Markets can also be segmented into light, medium and heavy usage of products.

Attitude Toward the ProductFor some companies or products customers show favorable attitude and for some products, they show unfavorable attitudes.

BEHAVIORAL SEGMENTATION

Occasion-When the buyers get the idea to buy. (occasional buyers) Benefit- Dividing a market into groups according to the different benefits that consumers seek from the product. For example- free bag with a laptop. Or discount on software or free delivery. User Loyalty status- A market can also be segmented by consumer loyalty. For Example-Consumer can be loyal to brand (Nokia), stores (Imperial Store) and companies (Toyota).