Market Segmentation and Segmentation Strategies

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Market Segmentation and Segmentation Strategies
A market segment is a specific group of customers
with unique customer needs, purchase behaviors,
and identifying characteristics
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Selecting and Entering Market Segments
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Selecting and Entering Market Segments (cont)
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Segmentation Strategies
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Perceptual Map
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Forces that Shape Consumer Market Needs
Segmentation is the Process of Dividing a Larger
Market into Smaller Pieces Based on One or More
Characteristics.
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1. Geographic Segmentation

• Demographic (Age, gender, family structure,
  income, social class, race geography)

Region Size of city, country or standard
metropolitan statistical area Population
density Climate
Pacific Mountain West North Central East North
Central East South Central South Atlantic
Middle Atlantic New England Under 5,000
5,000-19,999 20,000-49,999 50,000-99,999
100,000-249,999 250,000-499,999 etc Urban,
suburban, rural Warm, cold
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1. Demographic Segmentation
Under 6 6-12 13-19 20-29 30-39 40-49 50-59
60 Male Female 1-2 3-4 5 persons Under
15,000 15,000-24,999 25,000-34,999
35,000-49,999 Over 50,000 Professional
craftspeople, foremen farmers retired
students homemakers unemployed etc...
Age Gender Family size Income Occupati
on
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PROPENSITY TO CONSUME PRODUCTS BY AGE CATEGORY
Diarrhea Remedies
Frozen Yogurt
Beer, Ale Male Female
Laxatives
Car Wax
Metal Polish
Pizza
18-24 107 141 120 94 110 50 35 99 25-34 115 118 1
17 110 119 76 45 116 35-49 103 104 108 125 135 11
0 74 173 50-64 92 84 87 93 85 126 125 95 gt
65 67 49 60 62 39 114 271 65
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Interests Benefit Segmentation of the Toothpaste
Market
2. Lifestyles (Attitudes, values, activities,
interests)
Sensory Independent Segment Sociables Worriers
Segment
Principal Flavor, Brightness Decay Price Benefit P
roduct of teeth prevention Sought appearance
Demo- Children Teens, Large Men graphic
Young families Strengths people
Brands Colgate, Macleans, Crest Brands Favored St
ripe Plus White, on sale Ultra Brite
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Psychographic Categories
2. Lifestyles
Activities Interests Opinions Demographics
Work Family Themselves Age Hobbies Home Social
issues Education Social events Job Politics Incom
e Vacation Community Business Occupation Enterta
inment Recreation Economics Family size Club
membership Fashion Education Dwelling Community F
ood Products Geography Shopping Media Future City
size Sports Achievements Culture Life cycle
stage
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VALS2
ACTUALIZERS
High Resources
ACHIEVERS
EXPERIENCERS
FULFILLEDS
Principle Oriented
Status Oriented
Action Oriented
MAKERS
BELIEVERS
STRIVERS
STRUGGLERS
Low Resources
SRI Consultings Values and Lifestyle System
(VALSTM)
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VALSTM Segment as Percent of the United States
Population
VALSTM SEGMENT
PERCENT OF POPULATION
Actualizer
Successful, sophisticated, active, high
self-esteem, and abundant resources
11.7
10.5
Fulfilled
Mature, satisfied, comfortable people who value
order, knowledge and responsibility
Believer
17.0
Conservative, conventional people with concrete
beliefs and strong attachments to traditional
institutions
Achiever
14.7
Successful career and work-oriented who control
their lives
11.8
Striver
Seek motivation, self-definition and approval
from the world around them
Experiencer
12.9
Young, vital, enthusiastic, impulsive and
rebellious
Maker
12.0
Practical people who have constructive skills and
value self-sufficiency
Chronically poor, ill-educated, low skilled,
without strong social bonds
Struggler
9.5
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Usage Segmentation
3. Usage (Quantity, time of use, frequency of use)
Media usage Specific media usage Payment
method Loyalty status Usage rate User
status Usage situation
Newspaper magazine TV Internet Sports
Illustrate Life Cosmopolitan Cash Visa
MasterCard American Express check None some
total Light medium heavy Nonuser ex-user
current user potential user Work home
vacation commuting
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Heavy-Half Segmentation
Percentage of Population Volume
Non Light Heavy Non Light Heavy Users Half Half
Users Half Half
Cola 22 39 39 0 10 90 Bourbon
59 20 21 0 11 89 Beer 67 16 17 0 12 8
8 Dog Food 67 16 17 0 13 87 RTE
Cereal 4 48 48 0 13 87 Shampoo 18 41 41
0 19 81
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Male Beer Drinkers
Percentage of Agreement
Non Light Heavy Users Users Users
I like to play poker 18 37 41 I would rather
spend a quiet evening at home than go out to
a party 67 53 44 I smoke too much 29 40 41 I
would like to be a pro football player 10 15 21 I
would do better than average in a fist
fight 17 26 32 I go to church regularly 57 37 31 B
eer is a real mans drink 9 16 44 Playboy is one
of my favorite magazines 11 21 28 I am a girl
watcher 33 47 54 Men are smarter than
women 22 27 31
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Usage Rates
Consumption Product Light Buyers Heavy
Buyers Multiple
Catsup Unmarried or married over Under 50, 3 or
more 7.8 age 50 without children children
Frozen Under 35 or over 65, College
grads, 8.0 Orange not college grads, between 35
and 65 Juice 2 or fewer children
Candy Under 35, no children 35 or over, 3 or
more 21.9 Bars children
Beer Under 25 or over 50, Between 25 50, not
40.0 college educated, college grad, TV more
nonprofessional, TV less than 3.5 hours than 2
hours
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Forces that Shape Business Market Needs

• Firmographic Forces
• Number of employees
• Sales volume
• Number of locations
• Years in business
• Financial situation

• Business Culture
• Business sophistication
• Growth orientation
• Innovativeness
• Technology
• Decision making

• Usage Behaviors
• Application
• Quantity
• Time of purchase
• Frequency of purchase
• Users

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Targeting Evaluating MarketSegments