Transcript
Chapter # 5 Retail market segmentation
Presented BY:Abdirisak 1411-307029Saeed 1411-307056Hassan 1411-307001Jama 1411-307035Hassan 1411-307055
Learning objectives
To understand the meaning of market segmentation
To understand the be befits of segmenting market
To outline the criteria for market segmentation
Te examine the dimensions on which market can be segmented
To understand how to identify n select target market
To understand how to develop profile of target segment
To examine market segmentation practices followed in India
Introduction
A market is group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods n services that can satisfy the needs.
Market leads to higher sales.Mass marketing saves on costs by the retailersIt is becoming obsolete because of distribution
channels, internet, TV channelsHence retailers need to understand the criteria to
segment markets
Market segmentation
Market segmentation is the process of dividing the
heterogeneous total of market in to small groups of
customer who shares similar set of wants like :-
On the basis of gender
On the basis of culture
On the basis of age
On the basis of religious practices
On the basis of house hold incomes
Benefits of market segmentation
Development of market mix; in terms of product,
service, price, strategy, promotion.
Store location: segmentation helps a retail chain in
deciding a locations for it’s a new store.
Understand customers behavior: The failure or
success in any business is dependable upon the
behavior of the end-user or consumer who finally
uses the product or any services.
Cont…..
Merchandizing decision: merchandising is
essentially the skill that decides which the items
will go on shelves.
Promotional campaigns: a coordinated series
of promotional efforts built around a single theme
and designed to achieve a specific objective.
Positioning: creating an identity in the minds of a
target market
Segmenting, targeting, n positioning.Segmentation: chose variable state profile of segment verify perspective segmentTargeting: decide on targeting which segment be targeted how many segments be there
Positioning: understand target segment decide location evolve market mix
Criteria for effective market segmentation
Homogeneous within; customer should have similar
needs n wants n follow similar buying behavior
Heterogeneous between; customer in different
segments should be as different as possible
Substantial; should be large enough
Atoneable; must be identifiable
Accessible
Measurable ; to understand the size of market
Types of markets
Consumer
Industrial
Re-seller
Consumer
Consumer market individuals and households who
buy goods and services for their own use like:-
Convenience product.
Shopping product.
Specialty product.
Unsought items.
Industrial and Re-seller
A industrial market includes individuals, groups, or
organizations that purchase products or services for
direct use in the producing other products.
Re-seller market includes middle men or
intermediate such as wholesalers and retailers, who
buy finished goods and re-sell them for a profit.
Dimensions for segmentation
Geographic segmentation:
segmentation is based on variables such as: Continent. Country.Region.Urban. Suburban. Rural.
Demography
The market is divided in to groups based on demographic variable such as:-
Age Religion Gender Income level Social classes Occupation Educational level and Marital status
Psychological segmentation
Market based on Psychological characteristics
it divides buyers into different group.
Lifestyle
Personality
Values
Behavior segmentation
This are divided into groups:
Reason/ occasion for buying
Frequency of purchase
Quantity of purchase
Product usage
Loyalty status
Buyer readiness
Source of purchase
Market targeting choosing the segment to focus:
Size of the segment
Purchasing power
Growth rate
Presence of competition
Retailers capacity to serve
Share among customers
Customer profile:
Retailer must develop customer profile in the
identified target segment
Market research may be required to understand
the needs of the customers
Cont…
Customer profile may contain
customer demographics, age, sex, edu,
Family decision making
Psychographics
live style
value
Purchasing behavior of the target population:
Purchase motivation
Purchasing process
Sources of purchase
Time utility
Place utility
Survey of buyers intensions
Frequency of visits to store
Weekday/weekend shopping pattern
Store selection criteria
Spending per visit
Planned v unplanned shopping
Store loyalty
Trail attributes:
Price
Quality
Brand
Variety of merchandise
salesperson
Special offers
Promotional offers
Cont…
Packaging
Location
Guarantee/adjustment
Store deco
Payment terms
Questions1. How retailers create it’s market segmentation?
2. How retailers can benefit for market segmentation ?
3. Do you thing that culture can effect market segmentation ? And how ?
4. Why the marketers need to develop the marketing mix of each segment?
5. Segmentations helps in retailer in merchandising decision , how ?
6. How effective market segmentation influences consumer purchasing decision
making ?
7. why Market researchers may require to understand the needs of the
customers ?
8. Do you think behavioral segmentation is useful for retailers ? And how ?
Cont..
9. Why it’s necessary for the retailers to develop customer profile ?
10. How market segmentation helps the promotional campaigns ?
11. In which way retails can maximize the homogeneity with in segment?
12. How the size of the market influence the segmentation process?
13. How life style ,personality ,and value can participate retailers segmentation ?
14. WHAT RETAIL STORE ATTRIBUTES ARE IMPORTANT TO THE ELDERs ?
15. How can a retailers identify the segments that make up a market?
16. What criteria can a company use to choose the most attractive target market?
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