Segmentation

MARKET
SEGMENTATION
MARKET SEGMENTATION
"Market segmentation consists
of taking the total
heterogeneous market for a
product & dividing it into
several sub-markets or
segments, each of which tends
to be homogeneous in full
significant aspects.”William J.
MARKET SEGMENTATION
"Whenever a market for a product or
service consists of two or more buyers,
the market is capable of being
segmented, that is divided into
meaningful buyer groups.
The purpose of market segmentation is
to determine difference among buyers
which may be consequential in
choosing among them or marketing to
them." -Philip Kotler
MARKET SEGMENTATION
"The purpose of market segmentation
is to determine the differences among
purchasers which may effect the
choice of market area of marketing
methods. The market is divided into
sectors or segments in such a way
that the purchases in each segment
while not being exactly identical are of
a similar nature & are influenced by
similar buying motives." - Esmond
MARKET SEGMENTATION
"Market segments are
grouping of consumers
according to such
characteristics as income,
age, degree of urbanization,
race, or either classification,
geographic location or
education." - Cundiff & Still
MARKET SEGMENTATION
“Grouping of buyers
or segmenting the
market is described
as market
segmentation." -R.S.
Davar
MARKET SEGMENTATION
a) GEOGRAPHIC
• Region,
• City- Metro Size,
• Density,
• Climate
MARKET SEGMENTATION
b) DEMOGRAPHIC
•Age, •Occupation,
•Family size •Education,
•Family life • Religion
cycle, Race,
•Generation,
•Gender, •Nationality,
•Income, •Social class.
MARKET SEGMENTATION
c)PSYCHOGRAPHIC
• Life style
• Personality
MARKET SEGMENTATION
d) BEHAVIORAL
• Occasion,
• Benefits,
• User Status,
• Usage rate,
• Loyalty status,
• Buyer Readiness Stage,
• Attitude towards product.
ESSENTIALS OF
EFFECTIVE
MARKET
SEGMENTATION
ESSENTIALS OF EFFECTIVE MARKET SEGMENTATION
1. Heterogeneity: The various

consumer groups for the firm's
product must be different.
In other words, potential
customer’s characteristics &
wants must be heterogeneous
i.e., different from each other.
2. Availability of Data: The
information on the consumer
variables must be easily available,
The marketing manager must not
find it difficult to collect the data.
Consumers, dealers and others must
be willing to provide correct data.
Otherwise, marketing segmentation
process maybe of no use.
3. Measurability: The segment variables
must be capable of measuring. It refers to
the measurement of the size of the target
market & also the purchasing power of the
segment market.
The other segment variables such as the
age factors, user rate, etc. must be
capable of measuring. In other words, the
segments can be identified & compared in
terms of relative attractiveness.
4. Substantiality: It refers to the degree to
which the segments are large and/ or
profitable. The market segment must be
sufficient in size so as to design a suitable
mix to the satisfaction of target segment and
at the same to enable the firm to earn
sufficient profits.
There is no sense in concentrating marketing
efforts if the size of the market segment do
not bring in returns in form of profits. There
must be at least one segment large enough
to serve profitably.
5. Approachability: It refers to the

degree to which the segments
can be effectively reached and
served.
The segment market must be
located at a particular place and
is exposed to certain advertising
media, then only it can be
effectively reached and served.
6. Actionability: It refers to the

degree to which effective marketing
programmes can be formulated for
attracting and serving the customers.
There is no sense in identifying
several market segments, if the firm
is not in a position to undertake
marketing programmes to serve and
satisfy the consumers.
7. Responsiveness: It refers to the
degree to which the market segment
responds to the marketing programmes
adopted by the firm.
For instance, the marketing firm may
develop high quality products for quality
conscious people. They should react
favourably towards such products.
Other words, there should be a favourable
response from the segment market.
PROCEDURE (STEPS)
IN MARKET
SEGMENTATION
PROCEDURE (STEPS) IN MARKET SEGMENTATION
The following are the STEPS

or PROCEDURE in
developing segmentation
strategy:
1. Define the Relevant Market: Before
making an attempt to define market
segments, a company should define its
relevant market.
For example, a company that produces a
soft drink is in the soft drink market, and a
company that is selling sports cars is in the
sports car market.
A proper definition of relevant market will
keep the company on the right track.
2. Analyse Characteristics and Wants of
Potential Customers: After defining its relevant
market, the company should collect data that
describe the characteristics and wants of the
potential customers.
This data can be collected
from secondary research (collecting and using
data that is already available in published form).
The data can also be collected from primary
sources by conducting a field survey
3. Identifying Bases for Segmentation:
The company must identify bases for
segmenting the market. The bases includes
geographic, demographic, sociographic,
psychographic and behavioural.
The company may identify all bases or one
or two bases.
Specific segmentation variables, based on
the data collected might include age, sex,
occupation. lifestyle, brand loyalty, etc.
4. Define and Describe Market Segments:
After identifying possible segmentation
variables, the company can proceed to
define the various market segments.
This can be done by developing market
segment profiles which describe the
characteristics and wants of the people
in each market segment.
4. Define and Describe Market Segments:
The people in one segment will be highly similar
to each other in terms of their characteristics and
wants.
However, they will be different from the people in
other segments in terms of their characteristics
and wants. Thus, a company in the soft drink
market can define market segments as - fitness
conscious, fun loving college students,
occasional
5. Analyse Competitors' Positions: After
defining and describing the market segments,
the company proceeds to identify the major
competitors in each of the segments. One
approach is to survey a sample of consumers in
each of the segment and determine as to how
they rate the various brands in terms of
features, price, taste, etc. and find out the
reasons as to why they prefer a particular brand
over others.
6. Evaluate Market Segments: The company
must conduct cost-benefit analysis of serving
particular market segment.
Serving a market segment profitably requires that
the cost of the marketing effort be less than the
sales revenues realised from serving it.
Evaluating the market segments in terms of
generation of sales revenue and the cost of
marketing efforts helps in ranking the segments in
terms of relative attractiveness.
7. Select the Market Segment(s):
After identifying the various
market segments & evaluating
their relative attractiveness, the
company must select the market
segment(s) that it intends to
serve.
While selecting the market segment(s), the
company must consider:
• Overall company's
objectives.
• Resources & capabilities of
the firm.
• The level of competition.
While selecting the market segment(s),
the company must consider:
• The strengths and weaknesses
of competitors.
• The expected competitors'
reaction to the firm's entry into
one or more segments.
8. Finalising the Marketing Mix:
After selecting market segment(s) the
company must then finalise the
marketing mix appropriate for specific
market segment.
In other words, the company has to
make decisions in respect of the
product, price, promotion & distribution
8. Finalising the Marketing Mix:
It is to be noted that each segment needs a
separate marketing mix, because
consumers in each segment are different
from those of other segments.
The process of identifying market
segmentation should be reviewed
periodically as changes occur in various
factors on the basis of which markets are
MARKET
SEGMENTATION &
BRAND
POSITIONING IN
INDIAN PASSENGER
CAR INDUSTRY
CHILD'S
PESTER
POWER
CHILD'S PESTER POWER
Child's Pester Power Children in the age
group of 0-14 years account for a little
over one-third of India's one billion
population.
They are today a key influencer in
consumer purchase decisions.
Given the impact of television and Internet
on a child's awareness and peer pressure,
the child today, plays a key role in brand
selection and even the place from where
to buy.
This influence is not just restricted to
kid’s products only but extends to other
products too, like computers, music
systems, television, cars and
refrigerators.
In the context of food products like
biscuits, burgers & pizzas, fruit juice,
etc., the child makes the final call.
Even, in the context of FMCG products
like tooth paste and soap, the child plays
the role of a decision maker.
% OF KIDS KIDS WHO NFLUENCE WHAT FMCG BRAND THEIR FAMILY\ BUYS
Thank You

Segmentation

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MARKET

1. Heterogeneity: The various

5. Approachability: It refers to the

6. Actionability: It refers to the

The following are the STEPS

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