Segmentation & Target Marketing

Soma Giri

Disclaimer: - Some of the images and content have been taken from different online sources and this presentation is intended only for knowledge sharing but not for any profitable reasons

– Summarise the relationship between market segmentation, targeting and positioning

– Identify and describe the major variables for consumer segmentation

– Outline how companies select target markets and implement segmentation strategies

– Show how market segmentation and the marketing mix are interlinked in the positioning strategy

• Segmentation Variables

– Geographic

– Demographic

– Psychographic

– Behavioral

– Other (anything!)

• No single best way to segment a market.

• Often best to combine variables and identify smaller, better-defined target groups.

• Use Differences in:– age, gender, family size, family life cycle, income, occupation, education, race,

and religion

– Most frequently used segmentation variable• Ease of measurement and high availability

– Usually the worst variable to use.

Demographic

Psychographic segmentation divides a market into different groups based on social class, lifestyle, or personality characteristics.

People in the same demographic classification often have very different lifestyles and personalities.

Psychographic

• Occasion– Special promotions & labels for

holidays.– Special products for special occasions.

• Benefits Sought– Different segments desire different

benefits from the same products

Behavioral

Loyalty Status H

Split loyals

Shifting loyals

Switchers

• Loyalty StatusNonusers, ex-users, potential users, first-time users, regular users

• Usage Rate Light, medium, heavy.

User & Loyalty Status

Target Market

Unaware Aware

Not Tried

Negative Option Neutral Favorable

option

Tried

Rejector Not yet repeated Repeated

Loyal to other brand Switcher Loyal to

brand

Light User Regular User Heavy User

Effective Segmentation

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

Accessible• Segments can be effectively reached and served

Substantial• Segments are large or profitable enough to serve

Differentiable• Segments must respond differently to different marketing mix

elements & programs

Actionable• Effective programs can be designed to attract and serve the

segments

Targeting Segments

Undifferentiated Marketing

•Mass Marketing

Differentiated Marketing

•Segmented

Concentrated Marketing

•Niche Marketing

Micromarketing

•Local or individual Marketing

Target Narrowly Target Broadly

Targeting Market Selection

Product x Market Matrices

Classic