Market segmentation

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Market segmentation
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• A market is a group of potential customers
  with similar needs who are willing to exchange
  something of value with sellers offering various
  goods and services that can satisfy these needs.
  The marketer has the option of either approaching
  the entire set of customers with a uniform
  marketing approach or adopting a differentiated
  approach for different sets of customers. While
  the former refers to mass marketing the latter
  refers to the strategy of market segmentation

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• Market segmentation is the process of dividing
  the heterogeneous total market into small groups
  of customers who share a similar set of wants.
  Each of these smaller groups posses somewhat
  homogeneous characteristics.

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• At its most basic level, the term market
  segmentation refers to subdividing a market
  along some commonality, similarity. That is, the
  members of a market segment share something in
  common. The purpose of segmentation is the
  concentration of marketing energy and force on
  the subdivision (or the market segment) to gain a
  competitive advantage within the segment.
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Customers in a Segment Must Have

• similar needs
• They all must seek similar benefits
• They should all be satisfied by a similar retail
  offering
• The needs of this customer group should be
  different from the needs of customers in other
  segments.

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Definition

• A 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 stimuli

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The Fundamental Criteria for Evaluating a Retail
Market Segment

• Identifiability is important because it permits
  the retailers to determine (1) the segments size
  and (2) with whom the retailer should communicate
  when promoting its retail offering.
• Actionability means that the definition of a
  segment must clearly indicate what the retailer
  should do to satisfy its needs.
• Accessibility The target market segment must be
  reachable so as to serve them effectively.

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Measurable
Accessible
Substantial

• Size, purchasing power, profiles
• of segments can be measured.

Differential

• Segments must be effectively
• reached and served.

• Segments must be large or profitable
  enough to serve.

Actionable

• Segments must respond differently
  to different marketing mix elements actions.

• Must be able to attract and serve
  the segments.

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Purpose

• Increase 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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Approaches for Segmenting Markets

• Geographic Segmentation This is perhaps the most
  common form of market segmentation, wherein
  companies segment the market by attacking a
  restricted geographic area. For example
  corporations may choose to market their brands in
  certain countries, but not in others.
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• Price Segmentation Price segmentation is common
  and widely practiced. Variation
• in household incomes creates an opportunity for
  segmenting some markets along a price dimension.
  If personal incomes range from low to high, then
  a company should offer some cheap products, some
  medium-priced ones, and some expensive ones.

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Demographic Criteria

• Demographic variables
• age
• gender
• education
• income
• occupation
• education
• socioeconomic status
• religion
• culture

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• Demographic Segmentation- Gender, age, and
  education level are common demographic variables.
  Some brands are targeted only to women, others
  only to men. Music downloads tend to be targeted
  to the young, while hearing aids are targeted to
  the elderly.

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• Peter England
• Van Heusan
• Louis Philp
• Allen Solly
• The collective
• Park avenue
• Zap for kids
• Ginni jony