Market segmentation Avi Chemay presents
Feb 24, 2016
Market segmentationAvi Chemay presents
Ultimate aim of market segmentation The aim of market segmentation is
to increase sales, market share and profits
This is done by better understanding and responding to the desires of different target customers
Process of market segmentation Market segmentation involves
dividing the total market into segments
Once the market has been segmented. A segment of the market is chosen to be the target market.
Target market
Segment 1 Segme
nt 2
Segment 3
Ways of segmenting consumer markets Demographic segmentationGeographic segmentation Psychographic segmentationBehavioral segmentation
Demographic segmentation Dividing the total market according
to particular features of a population such as age or gender
It is easy to measure demographics, therefore it is commonly used among marketers
Age and gender are the most common
For example coca cola targets 15-35 year old males while Fanta targets 13-16 year olds
Geographic segmentation Geographic segmentation divides the total
market according to geographic locations A business may divide the market into regions Different geographical locations have different
needs and tastes A city size will impact location, for example a
fast food chain will not open in a city with a population of 25,000
Climate will also impact segmenting markets for a business selling heating or cooling systems
Psychographic segmentation Psychographic segmentation is the process of
dividing the total according to personality Characteristics such as motives, opinions,
socioeconomic groups and lifestyle To segment this market a business would
research preferences such as TV shows, movies and music
Psychographic variables can be combined with other segmentation variables
This segmentation focuses on why people behave the way they do
This method of segmentation is difficult to measure
Behavioral segmentation Behavioral segmentation is the process of
dividing the total market according to customer relationships to the product
This includes the customers knowledge of, attitude and benefits of the product
This type of segmentation identifies what the customers want from the product
By understanding what customers want from the product, marketers can design their product to satisfy the needs of their target market
Common variables of market segmentation
Demographic Geographic Psychographic Behavioral
• Age • Gender • Education• Occupation • Income • Social class• Ethnicity • Religion
• Region• Urban • Suburban • Rural • City size• Climate • Land forms
• Lifestyle • Personality • Motives • Socioeconomic
group• Consumer
opinions and interests
• Purchase occasion
• Befits sought • Loyalty • Usage rate• Price sensitivity
Diagram of market segmentation
Segment 1 Segment 2
Segment 3
Whole Market
Market segmentation case study: Holden shifts gear and goes all girly (Page 205)
Holden is the second largest car manufacturer in Australia They now want to sell cars to young female drivers Using social media Holden is best known for their top selling car the commodore Holden has launched a social media campaign to launch the
Briana Spark This is due to changing consumer preferences Holden wanted to deliver a selection of cars that met with the
changing consumer preferences Holden has began to lean towards digital advertising The spark is priced at 12,490 The digital strategy is a large part of their marketing strategy The campaign allows users to design their car online and
share it on twitter and Facebook
QUESTION TIME!
1. Distinguish the four main ways of segmenting consumer markets.
2. Describe the link between market segmentation and the target market