Oct 30, 2014
MARKET SEGMENTATIONMarket segmentation is based on fact that
markets are heterogeneous & not homogeneous.Homogeneous market refer to a market situation
where the prospective buyers of any product are found to be uniform in their needs, habits, choices, nature, etc.
Heterogeneous market refer to a market situation where the prospective buyers of any product are not found homogeneous in their needs, habits, choices, nature, etc.
Cont’d…Market segmentation refers to dividing the
heterogeneous markets into smaller customer groups having certain homogeneous characteristics. Such as income, age, sex, etc.
They may differ on the basis of income, gender, age, education, profession, religion, social class, family life, style, culture etc.
DEFINITIONAcc to William J. Stanton“ Market Segmentation consist of taking the
total heterogeneous market for a product & dividing it into several sub markets or segments each of which tends to be homogeneous in all significant aspects.
Acc to Philip Kotler Market segmentation is the sub-dividing of a
market into homogeneous subset of consumers , where any subset may conceivably be selected as a market target to be reached with a distinct marketing mix.
OBJECTIVES OF M.STo make grouping of customers on the basis of
their homogeneous characteristics.To identify the needs, tastes, buying-motives of
target customers.To determine marketing strategies, targets &
goals of the firm.To make the activities of the firm consumer
oriented.To identify the areas where the customers may be
created and market area can be expanded.
The main aim of market segmentation is to prepare separate marketing programmes or strategies for each segment so that maximum satisfaction to consumers of different segments may be provided.
Reasons for the development of M.SCustomer-Orientation
Technological Advancement
Use of cost reducing techniques
Increase in purchasing power
Increase in competition
Requirement/ Criteria For Effective Segmentation Identifiable
Measureable
Accessible
Responsive
Significant
Substantial
APPROACHES OF M.SThe marketeers adopt several app. To segment a
market.
App. To market segmentation
Mass Marketing
Product Differentiation
Marketing
Target Marketing
MASS MARKETING In this total market is considered as one segment. Under mass marketing only one product is
produced & sold in the market for all customers with help of common marketing programme.
It assumes that there is no significant difference amongst Consumers in terms of their need & wants
e.g. coca-cola
PRODUCT DIFFERENTIATION MARKETING
In this marketing, marketeers uses product differentiation app.
Once marketeers learnt that consumers would not accept one quality product, the marketeers try to provide different size, colours, shapes, features & qualities in his product as per the needs & wants of the customer of different segments.
It provide different product to different segmentE.g. maruti udyog ltd.
TARGET MARKETING
It defined as a set of actual potential buyers of a product, service or idea .
Target marketing help the marketeer to correctly identify the market- the groups of consumers for whom the product is designed.
It has 3 steps :-
1. Market segmentation
2. Market targeting
3. Product positioning
Segmentation Process
Analyse the characteristics of customers
Disaggregate the customers into suitable segments
Formulate different marketing mix for different segments
Feedback of various segments
Select the higher potential segments
Analyse the needs of Customers
BASIS OR CRITERIA OF M.S
The step towards developing a segmentation strategy is to locate the bases or basis for segmenting the market.
There are two simple division of product market.
I. Consumer market
II.Industrial market
On the basis of consumer market
1. Geographical basis
2. Demographic basis
3. Psychological basis
4. Behavioral basis
5. Marketing basis
1) GEOGRAPHICAL BASISIt is the most simple, convenient, popular,
and usual base for mkt segmentation.It includes :
AreaRegionCity sizeDensityClimateUrbanization
2) DEMOGRAPHIC BASISUnder this basis, a market tries to differentiate
between groups of customers on the basis of demographic variables.
It includes:-Gender AgeIncomeEducationReligionNationality
Cont’d…OccupationMarital StatusFamily sizeFamily life-cycle
3) PSYCHOGRAPHIC SEGMENTATION It describe the human characteristics of
consumers. It segment the market on the basis that how people act.
These include:-Personality Life-style Social classCultureValuesBeliefsAttitude
4) BEHAVIORAL SEGMENTATIONConsumer behavior may also form the basis of
market segmentation. It includes:-
OccasionsBenefits
QualityServiceEconomySpecially
Cont’d…Users status
Non-userPotential userFirst time userRegular userEx-user
Buyer-Readiness Stage Unaware Aware Informed
Cont’d… Interested Desired Intended to buy
User RateLoyalty status
Hard core loyal Soft core loyal Switchers
5) MARKETING BASISMarketing conditions also form an important
basis for market segmentation.There are latest variables used by modern
marketeers.This include:-Degree of competitionChannels of distributionBuyer with price consciousness
ON THE BASIS OF INDUSTRIAL PRODUCT
1. Type of business activities basis
2. Geographical location basis
3. Usual purchasing procedure basis
4. Size of user
IMPORTANCE OF MS Knowledge of marketing opportunities Knowledge of customer needs Adopting effective marketing programme Proper allocation of resources Adjustment in products Increasing sales volume Better assessment of the competition Effective advertising appeals Enhances marketing efficiency Benefits to consumers