Market segmentation

Market segmentation

1. dividing a market into smaller segments with distinct needs, characteristicas, or behavior that mightrequire separate marketing strategies or mixes.

2. companies today

   • market targeting: the process of evaluating each market segments attractiveness and selecting one or more segments to enter.
   • differentiation: differentiating the market offering to create superior customer value.
   • positioning: arranging for a market offering to occupy a clear, distinctive, and desirable place relative to compeeting products in the minds of target consumers

3. segmenting consumer markets

   • geographic segmentation
     • dividing a market into different geographical units, such as nations, states, regions, countries, cities, or even neighborhoods.
     • density:urban, suburban, exurban, rural climate: northern,southern
   • demographic segmentation
     • dividing the market into segments based on variables such as age, gender, family, size, family life cycle, icnome, occupation, education, religion, race, generation, and nationality
     • age and lyfe-cycle segmentation: dividing a market into different age and life-cycle groups examples: under 6, 6-11- 12-19, 20-34, 35-49, 50-64, 65 and over
     • income:dividing a market into a different income segments examples:under $20,000; $20,000-$30,000; etc
   • Psychographic segmentation
     • dividing a market into different segments based on social class, lifestyle, or personality characteristics.
     • gender segmentation: dividing a market into different segments based on gender
   • behavioral segmentation
     • divides buyer into segments based on their knowledge, attitudes, uses, or responses to a product
     • occasions: buyers can be grouped according to occasions when they get the idea to buy, actually make their purchase , or use the purchased.
     • benefits: a powerful form of segmentation is grouping buyers according to the different benefits that they seek from a product
       • user status:marketers can be segmented into nonusers, ex-users, potencial users, first-time users, and regular users of a product. they want to reinforce and retain regular users, attract targeted nonusers, and reinvigorate relationships with ex-users.
       • usage rate: marketers can also be segmented into light, medium, and heavy product users.Heavy users are often a small percentage of the market but account for a high percentage of totalconsuption.
       • Loyalty status: a market can also be segmented by consumer loyalty.consumer can be loyal to brands, stores, and companies.
   • using multiple segmentation bases
     • marketers rarely limit their segmentationanalysis to only one or a few variables only.
     • they often use multiple segmentation bases in an effort to identify smaller, better- defined target groups

4. segmenting business marketers

   • business buyers can be segmented geographically, demographically, or by benefits sought, user status, usage rate, and loyalty status.
   • for example: american express targets businesses in three segments: merchants, corporations, and small businesses.

5. segmenting international markets

   • companies can segment international markets using one or a combination of several variables. they can segment in geographic location, economic factors, political and legal factors and cultural factor

6. requirements for effective segmentation

   • measurable: the size, purchasing power, and profiles of the segments can be measured.
   • accessible: the market segments can be effectively reached and served
   • substantial: the market segments are large or profitable enough to serve.
   • differentiable: the segments are conceptually distinguishable and respond differently to different marketing mix elements and programs.
   • actionable: effective programs can be designed for attractring and serving the segments.

7. Market targeting

   • Evaluating Market Segments
     • In evaluating different market segments, a firm must look at three factors: segment siza and growth, segment structural attractiveness, and company objectives and resources.
       • The company also needs to examine major structural factors that affect long-run segment attractiveness.
   • Selecting Target Market Segments
     • A set of buyers sharing common needs or characteristics that the company decides to serve
     • undifferentiated marketing
       • A market-covarege strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer