Download as PPT, PDF, TXT or read online from Scribd
Download as ppt, pdf, or txt
You are on page 1/ 20
Market Segmentation
By-Chaitanya Purohit MBA 3rd sem. Definition Segmenting Consumer Markets The Market Segmentation Process VALS Framework Advantages of market segmentation Disadvantages of market segmentation Market Segmentation:
Dividing a market into distinct
groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes. Divide the market into different group based on : •Region – South India , North , Western Region, East • City – metro cities, cities with population more than 1 million •World •Density •Climate •States
Ex.- Mcdonalds globally, sell burgers aimed at local markets, for example, burgers are made from lamb in India rather then beef because of religious issues. In Mexico more chilli sauce is added and so on. As people age their needs and wants change, some organizations develop specific products aimed at particular age groups for example nappies for babies, toys for children, clothes for teenagers and so on.
Gender segmentation is commonly used
within the cosmetics, clothing and magazine industry.
In the UK we have also seen the introduction
of Maxim, (www.maxim-magazine.co.uk) a male lifestyle magazine covering male fashion, films, cars, sports and technology. •Lifestyle groups
•50's •Retired early from profession. •Time to spare •Adventure Seekers Product-related segmentation: dividing a consumer population into homogeneous groups based on characteristics of their relationships to the product Can take the form of segmenting based on: Benefits that people seek when they buy Usage rates for a product Consumers’ brand loyalty toward a product Segmenting by grouping people according to the amounts of a product that they buy and use.
Markets often divided into heavy-user, moderate-
user, and light-user segments.
Segmenting consumers grouped according to the
strength of brand loyalty felt toward a product Stage I: Identify Segmentation Process
Stage II: Develop Relevant Profile
Stage III: Forecast Market Potential
Stage IV: Forecast Market Share
Stage V: Select Specific Segment
Marketersfollow two methods to determine the bases on which to identify markets: Segments are predefined by managers based on their observation of the behavioral and demographic characteristics of likely users Segments are defined by asking customers which
attributes are important and then clustering the responses Next, marketers seek further understanding of the consumer in each promising segment
Must develop a profile of the typical consumer and each
segment
Helps to accurately match consumer needs with the firm’s
marketing offers Market segmentation and market opportunity analysis combine to produce a forecast of market potential within each segment
Defines a preliminary “go or no-go” decision since the
sales potential in each segment must justify resources devoted to further analysis The next step is to forecast the firm’s probable market share Competitors’ positions in targeted segments must be analyzed
A specific marketing strategy must
be designed to serve the targeted segments
The firm determines the expected
level of resources it must commit to tap the potential demand in each segment The preceding information, analysis, and forecasts allow management to assess the potential for achieving company goals and to justify committing resources in developing one or more segments.
Marketers also weigh more than
monetary costs and benefits at this stage VALS 2 - Network
ACTUALIZERS Abundant Resources
8% Principle Oriented Status Oriented Action Oriented
FULFILLED ACHIEVERS EXPERIENCERS
11% 13% 12%
BELIEVERS STRIVERS MAKERS
16% 13% 13%
STRUGGLERS Minimal Resources
12% 1. The process of breaking up a homogeneous market into heterogeneous segments forces the marketer to analyse and consider both the needs of the market and the company’s ability to competently serve those needs – thereby making the company better informed about its customers.
2. Competitor offerings and marketing positioning must
also be analysed in this context so the company must consider what its competitive advantages and disadvantages are, helping it to clarify its own positioning strategy.
3. Limited resources are used to best advantage, targeted
at those segments that offer the best potential A. Costs more to differentiate packaging, promotion, etc. to more than one market
B. Research and identification is costly
C. Production costs increase when the product is
changed to meet the needs of more than one market
D. Only used when the potential sales will exceed
sales from marketing to one larger group
E. Risk is involved with smaller diversified markets
