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Prof. Raghavendran Venugopal
Market Segmentation
DefinitionA market segment is a subgroup of
people or organizations sharing one or more characteristics that cause them to have similar product needs. it is distinct from other segments
(heterogeneity across segments)it is homogeneous within the segment
(exhibits common attributes)it responds similarly to a market stimuliit can be reached by a market intervention
2 Prof. Raghavendran Venugopal, AIET, Mijar
PurposeIncrease marketing
efficiency by focusing marketing efforts to a particular group
Maximize scarce marketing resources
Find a market with limited competition
Select the most profitable segment
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Bases for Market SegmentationProduct oriented ApproachPeople oriented Approach
Prof. Raghavendran Venugopal, AIET, Mijar4
• Size, purchasing power, profiles of segments can be measured.
• Segments must be effectively reached and served.
• Segments must be large or profitable enough to serve.
Measurable Measurable
AccessibleAccessible
SubstantialSubstantial
DifferentialDifferential
ActionableActionable
• Segments must respond differently to different marketing mix elements & actions.
• Must be able to attract and serve the segments.
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Segmentation Success Criteria
Geographic
DemographicAge, gender, family size and life cycle, or income
PsychographicSocial class, lifestyle, or personality
BehavioralOccasions, benefits, uses, or responses
Nations, states, regions or cities
Segmentation Criteria
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Segmentation CriteriaGeographic variables
region of the world or country, East, West, South, North, Central, coastal, hilly, etc.
country size/country size : Metropolitan Cities, small cities, towns.
Density of Area Urban, Semi-urban, Rural. climate Hot, Cold, Humid, Rainy.
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Demographic Criteria Demographic variables
age gender sexual orientation family size family life cycle education income occupation education socioeconomic status religion nationality/race language
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Psychographic Criteria
Psychographic personality life style value attitude
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Behavioral CriteriaBehavioral variables
benefit sought product usage rate brand loyalty product end use readiness-to-buy stage decision making unit profitability income status
10Prof. Raghavendran Venugopal, AIET, Mijar
Market Segmentation Process1. Determine the characteristics of
segments in the target market & separate these segments in the market based on these characteristics.
2. Verify the market segments size if adequate enough to support the organization's product.
3. Develop a marketing strategy to target this market.
11 Prof. Raghavendran Venugopal, AIET, Mijar
Selecting the Market Segment or Target Market
Single Segment
M1 M2 M3
P1
P2
P3
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Selective Segment
M1 M2 M3
P1
P2
P3
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Product Specializatio
n
M1 M2 M3
P1
P2
P3
Market Specializatio
n
M1 M2 M3
P1
P2
P3Full
CoverageM1 M2 M3
P1
P2
P3
PositioningDefinition: manipulating the 4 P’s so that
the product offers a distinct place in the minds of the customer
How the target market perceives/views your product. Your image in the target market’s mind
1. Identify Basesfor Segmenting the Market
2. Develop Profilesof Resulting Segments
3. Develop Measuresof Segment Attractiveness
4. Select TargetSegment(s)
5. Develop Positioningfor Each Target Segment
6. Develop MarketingMix for Each Target Segment Market
Positioning
MarketTargeting
Market Segmentation
Market Segmentation Process
15 Prof. Raghavendran Venugopal, AIET, Mijar
Mass MarketingSame product to all consumers
(no segmentation)
Mass MarketingSame product to all consumers
(no segmentation)
Segment MarketingDifferent products to one or more segments
(some segmentation)
Segment MarketingDifferent products to one or more segments
(some segmentation)
MicromarketingProducts to suit the tastes of individuals or locations
(complete segmentation)
MicromarketingProducts to suit the tastes of individuals or locations
(complete segmentation)
Niche MarketingDifferent products to subgroups within segments
( more segmentation)
Niche MarketingDifferent products to subgroups within segments
( more segmentation)
Levels of Segmentation
16 Prof. Raghavendran Venugopal, AIET, Mijar
By. Prof. Raghavendran Venugopal
End of the Module 3
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