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    E - Notes Week 7

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    Ruthie Abel
    Market segmentation involves dividing the market into distinct groups of buyers based on characteristics like gender, age, income, lifestyle, occupation, etc. This allows companies to better tailor their products and marketing to specific segments. There are several types of segmentation including geographic, demographic, psychographic, and behavioral. The key benefits are that it helps companies focus their efforts, produce a wider variety of products, and improve market research. However, it also increases costs related to production, inventory, research, and promotions.

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    E - Notes Week 7

    Uploaded by

    Ruthie Abel
    25 views4 pages
    Market segmentation involves dividing the market into distinct groups of buyers based on characteristics like gender, age, income, lifestyle, occupation, etc. This allows companies to better tailor their products and marketing to specific segments. There are several types of segmentation including geographic, demographic, psychographic, and behavioral. The key benefits are that it helps companies focus their efforts, produce a wider variety of products, and improve market research. However, it also increases costs related to production, inventory, research, and promotions.

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    E- NOTES WEEK 7

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    Market segmentation involves dividing the market into distinct groups of buyers based on characteristics like gender, age, income, lifestyle, occupation, etc. This allows companies to better tailor their products and marketing to specific segments. There are several types of segmentation including geographic, demographic, psychographic, and behavioral. The key benefits are that it helps companies focus their efforts, produce a wider variety of products, and improve market research. However, it also increases costs related to production, inventory, research, and promotions.

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    25 views4 pages

    E - Notes Week 7

    Uploaded by

    Ruthie Abel
    Market segmentation involves dividing the market into distinct groups of buyers based on characteristics like gender, age, income, lifestyle, occupation, etc. This allows companies to better tailor their products and marketing to specific segments. There are several types of segmentation including geographic, demographic, psychographic, and behavioral. The key benefits are that it helps companies focus their efforts, produce a wider variety of products, and improve market research. However, it also increases costs related to production, inventory, research, and promotions.

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    WEEK 6

    TOPIC: MARKET SEGMENTATION (Year 10 Revision week 6)

    Sub-topics: Meaning, basis, types, characteristics, advantages and


    disadvantages

    MEANING

    This is the act of dividing a market into distinct groups of buyers who might
    require separate product and or marketing mixes.

    Market segmentation exist to enable marketers draft better product and


    communication strategies according to the needs of the segment/group

    Basis for market segmentation

    The following are the bases for segmenting market.

    1. Gender: the interest, needs and wants of males and females differs at any
    levels. Eg. Clothing, cosmetics, etc
    2. Age: most products in the market are not universal to be used by all age
    groups.
    3. Income: income decides the purchasing power of the target audience
    (customers) as it decides whether to market the product as a need, want or
    luxury. This bases can be segmented into three (3) income level as; high,
    mid and low income group.
    4. Place: where a target audience lives affects their buying decision. Eg. A
    person living on a mountain would have no need for an air conditioner.
    5. Usage: A user can be labelled as heavy, medium or light user of a product as
    well as their product awareness.
    6. Lifestyle: this include subsets like interest, religions, marital status, hobbies,
    values and other factors which affects individuals buying decisions.
    7. Occupation: People’s occupation do determine their buying pattern.
    Types of market segmentation
    1. Geographic segmentation
    2. Psychographic segmentation
    3. Demographic segmentation
    4. Behavioural segmentation
    5. Socio-economic.
    Geographic segmentation

    This is dividing the area covered by the total market of interest into unit such
    as countries or regions.

    Demographic:

    This divides the market based on variables such as age, sex, income, etc.
    They are the most popular variables used because they are easy to measure.

    But they do not always produce clear-cut segment. Examples are; age for
    products like food and beverages, books, clothing; sex for products like
    clothing and cosmetics; income for products like cars, transport services,
    electronic goods and food.

    Psychographic segmentation

    This involves the division of buyers into several groups based on their social
    class, lifestyle and personality characteristics, social class membership or
    classification exacts defined influence on purchase pattern on such products
    as clothing, home furnishing, choice of school for children, use of leisure
    product/services and cars.

    Behavioural segmentation

    This is the division of buyers on the basis of groups on their action,


    response, or disposition towards the product. This is the most useful group
    of the variables available to the market for segmentation because first, a
    wide variety of basis could be constructed.

    Socio-economic segmentation
    This is the division of the market according to the mixture of income,
    occupation and education.

    Characteristics/features of market segmentation

    The following are features of market segmentation.

    1. Measurable: Consumers who belong to a particular target market and


    segment should be clearly identifiable and quantifiable in terms of
    population, income and age bracket among other factors.

    Accessible: market segmentation should be accessible in terms of geography


    and economy. Appropriate use of marketing strategies is required for each
    segment to enable accessibility of goods and services.

    Profitable: using marketing techniques enables a firm to enjoy economics


    of scale while fulfilling customers’ needs at the same time. Therefore, the
    amount of income the target market is willing to spend should be enough to
    enable the firm earn profit.

    . Market responsiveness: customers in a given segment should be


    responsive to the products meant for them. The success of products
    development/introduction in the markets depends on whether they meet
    consumer’s or organization’s needs.

    Advantages of market segmentation

    1) It helps in distribution of products.


    2) It enables marketers to produce wide varieties of products.
    3) It helps marketer to focus on the different types of consumers in the market
    4) It helps in market research for improvement
    5. It helps marketer to advice producers.

    6. It helps small firms to concentrate and specialize in one or two market segments.

    7. It helps marketer to modify their products, services and marketing appeals


    to suit the target audience.
    Disadvantages of market segmentation

    1. It increases research, development and production cost


    2. It can lead to investment waste when the characteristics or market choices
    already made changes
    3. Large inventory has to be maintained by both manufacturer and distributors.
    4. It increases promotional cost as different advertisement and promotions
    might be needed for different segments
    5. It involves extensive market research by the marketer
    6. It can lead to wrong selection of irrelevant market segments

    EVALUATION QUESTIONS

    1. What is market segmentation?


    2. State any 5 features of market segmentation
    3. Identify any 6 merits
    4. Demerits of market segmentation
    5. Mention five basis for market segmentation

    EXTENTION

    1. Describe how market segment help in business expansion.

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