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1. 1.Definition

   • 'Diving a market into smaller segments of buyers with distinct needs,, or behaviours that might require separate marketing strategies or mixes" (Kotler and Armstrong, 2012)

2. 2. Steps in the Target Marketing Process

   • 1. Segmentation: Identify and describe market segments. Consider variables (bases) for segmenting tbe market. Examine profile or emerging segments and validate segments which emerge.
     • 2. Targeting: Evaluate segments and decide which to go after. Decide which and how many segments should be targeted.
     • 3. Positioning: Design a product or service that segments needs and requirements. Develop an appropriate marketing mix that will create a competitive advantage. Develop and understanding of customer perceptions, position the products in the minds of the consumer.

3. 3. Types of Segmentation

   • Mass Marketing: Mass production, Mass distribution and Mass promotion.
   • Targeting Marketing: Markets consists of buyers who differ in one or more respects. Sellers can use any of these variables to identify segments in a market. Target marketing is where the seller targets one or more of these segments with products and marketing programmes tailored to each segment

4. 4. Why do we segment markets?

   • Consumer preferences differ
   • Consumers can be grouped into relatively homogeneous subgroups
   • Behaviour patterns for each subgroup can be identified.
   • Marketers can isolate and target meaningful segments

5. 6. Benefits of Segmenting Markets

   • Improved customer anaylsis
   • Improved competitor analysis
   • Improved resource allocation and greater cost efficiency in recruiting customers.
   • Improved market planning
   • Management of complexity and diversity? Database marketing and CRM.
   • Disadvantages of Segmentation
     • 1. No Highly customised product. Only group served not individuals. No link to competitive advantage and lack of suitable process.

6. 7. Consumer Criteria

   • Behavioural
     • Purchase/ Transaction
     • Consumption/ Usage
     • Media Usage
     • Technology usage
   • Psychological
     • Lifestyle
     • Personality
     • Perceptions
     • Attitudes
     • Motives
     • Benefits Sought
   • Profile
     • Demographic
       • Age, Gender, race, family size, lifecycle and generation
         • Wells and Gubar Life cycle
           • "Traditionally marketers have looked to the family life cycle as proposed by wells and guber"
             • " Something more complex than the Wells and Gubar model in needed to reflect properly routes that family lifes can now take"
               • Both quotes: (Brassington and Pettitt, 2007)
     • Socioeconomic
       • Social Class, income levels, employment status.
     • Geographic
       • Postal Code.
         • ACORN.

7. 8. Bases of Segmentation

   • Demographic
   • Geographic
   • Geo-demograhic
   • Socio-economic
   • Psychograhic
   • Lifestyle
   • Behaviouristic
   • Benefit Sought
   • Source = Brassington and Petitt, 2006

8. 9. Variable Segmentation

   • Single Variation: One base is used
   • Multi-Variable Segmentation: More than one is used e.g. Gender and income.

9. 5. Importance of Segmentation

   • People have different wants and needs. Harvard bussiness school suggests that 85% of 30,000 products failed due to poor segmentation.
   • Mass marketing strategy employs mass promotion, production and mass distribution to mass consumers. In the past companies have used it and received great profit. But times have changed and its very hard to create a product that appeals to all consumers.
   • "The purpose of segmenting the market is to ensure, as far as possible, that resources are directed at those individuals or organisations that are likely to yield the best returns" (Blythe, 2014)

10. 10. Which Segmentation Bases (Criteria) to use

    • 1. Distinct: Is each segment clearly different from other segments? If so, a different marketing mix will be necessary.
      • 2. Accessible: Can the segment be easily reached and served? Distribution channels and promotional campaigns for example.
        • 3. Measurable: Is the segment easy to identify and measure?
          • 4. Profitable: Large enough and profitable enough to serve? They should contain similar people who want similar things and are worth going after a tailored marketing mix.
            • Source: Baines et al, 2011

11. 11. Evaluating Market Segments

    • Attractiveness of The segment: (Size, Growth, Profitability)
      • Congruence with companies objectives
        • Company's skills and resources vs what it takes to serve the segment.
          • A company should only enter segments in which it can create a superior customer value and gain advantages over its competitiors.