Market Segment Analysis

Presented by: Tayyaba Latif

Market Segmentation
Market segmentation is actually is a process in which
target market divided into smaller approachable
groups
Target market divided into smaller groups on the
basis of
 Demographics
 Common interest
 Behaviors
Example
When any company going to launch new product. They
are following setup for market segment analysis
 Examine overall market
 Who are their target buyers
 Break larger market into smaller segments
 Specific segment consumer needs
Market Segment Analysis
 Marketer always uses criteria to market segment
analysis. This process includes following steps
Steps
1. Societal market orientation
2. Understanding customers, competition and financial implications (market
segments)
3. Planning
4. Implementing
5. Connecting with customers
6. Identify market segments and develop a profile of each segment
7. Develop a forecast of market potential of each segment
8. Analyze competitive forces in each segment
9. Analyze sales, costs, profitability and return on investment for each
segment
10. Select targeting market segments and develop positioning and marketing
mixes of each groups
1. Societal market orientation

Societal market orientation in which company take

good marketing decision on the basis of
 Consumers’ wants
 Company requirements
 Society long term interest
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Societal market orientation call for business by these
concerns
 Human welfare
 Consumers needs
 Profit
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Societal market orientation in any organization can be
applied at three levels:
 Corporate level
 Strategic business unit level
 Product market level
Example
 AVON is multinational beauty and Cosmetics
Company. This company raised funds by sale of pink-
ribbon and their independent sales representatives
have raised millions of dollars for National Breast
cancer foundation.
2. Understanding customers, competition and
financial implication (Market segments)
Understanding customers through following types of
segmentation
 On the basis of demographic
 On the basis of geographic
 On the basis of behavioral
 On the basis of psychographic
 On the basis of customers journey
Understanding customers
Any business can more focus on understanding
customers by
 From the size of their purchases
 Learn what they like and dislike
 Do the detailed feedback from them
Understanding competition
Businesses can understand competition through following
 Selecting a list of competitors
 Technical analysis of competitors
 SWOT analysis
 Highlight overall competitive analysis
3. Planning

Planning can be at three levels

 Corporate-level planning
 Strategic-business-unit-level planning
 Product-market-level planning
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In planning phase, customers division into groups on
the basis of following aspect:
 Psychographic
 Decision makers
 Behavioral
 Geographic
 Distribution
 Demographic
4. Implementing

Companies follow implementing skills

 Allocating skills
 Monitoring skills
 Organizing skills
 Interacting skills
5. Connecting with customers

Companies connected with customers through

following ways:
 By sophisticated data-driven marketing like email
marketing, targeted campaigns.
 By personalization targeted offers can truly relevant
to the individual customer. 
 Through new offers on the basis of past experience of
customers
Identify market segments and develop a
profile of each segment
There are three steps to comply with when identifying
marketplace:
 Identify why a customer would want to buy product
or service
 Segment the overall market
 Research the market
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Companies design promotional strategy to target the
specific age group buyers. After that making the
profile of this segment on the basis of geographic
 demographic
 psychographic
 and behaviorist
7. Develop a forecast of market potential of
each segment
Companies use some of the methods for forecasting
 Survey and Judgment Forecasting Techniques like
customer survey, sale force composite and expert
opinion
 Time Series Forecasting Techniques like market tests
and correlation techniques
8. Analyze competitive forces in each segment

The best way to analyze and understand the

competitive forces comprehend the Porter's five
forces model. These five forces are following:
 Competitive rivalry
 The bargaining power of suppliers
 The bargaining power of customers
 The threat of new entrants
 The threat of substitute products or services
Analyze sales, costs, profitability and return
on investment for each segment
Companies use numerous ways to measure the
organization's profits. They are following:
 By seeing margin or profitability ratios
 By seeing Break-even analysis
 By analyzing Return on assets and on investment
Select targeting market segments and develop positioning and marketing
mixes of each groups

Companies thinks about

 Ideal product for the target segment
 Best ways to get targeted segment attention
 Range of prices which customers willing to pay for
the targeted segment
 List of places, best way to get the products easily
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Companies choose best positioning strategy from the
following strategies
 Unique selling proposition
 Value proposition
Thank you