Market segmentation

1. Market
Segmentation

2. MARKET SEGMENTATION
Market 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.

3. 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.

4. DEFINITION
Acc 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.

5. OBJECTIVES OF M.S
To 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.

6. Reasons for the development of
M.S
Customer-Orientation
Technological Advancement
Use of cost reducing techniques
Increase in purchasing power
Increase in competition

7. Requirement/ Criteria For
Effective Segmentation
Identifiable
Measureable
Accessible
Responsive
Significant
Substantial

8. APPROACHES OF M.S
The marketeers adopt several app. To segment a
market.
App. To market segmentation
Mass
Marketing
Product
Differentiation
Marketing
Target
Marketing

9. 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

10. 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 segment
E.g. maruti udyog ltd.

11. 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

12. 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

13. 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

14. On the basis of consumer market
1. Geographical basis
2. Demographic basis
3. Psychological basis
4. Behavioral basis
5. Marketing basis

15. 1) GEOGRAPHICAL BASIS
It is the most simple, convenient, popular,
and usual base for mkt segmentation.
It includes :
Area
Region
City size
Density
Climate
Urbanization

16. 2) DEMOGRAPHIC BASIS
Under this basis, a market tries to differentiate
between groups of customers on the basis of
demographic variables.
It includes:-
Gender
Age
Income
Education
Religion
Nationality

17. Cont’d…
Occupation
Marital Status
Family size
Family life-cycle

18. 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 class
Culture
Values
Beliefs
Attitude

19. 4) BEHAVIORAL
SEGMENTATION
Consumer behavior may also form the basis of
market segmentation.
It includes:-
Occasions
Benefits
Quality
Service
Economy
Specially

20. Cont’d…
Users status
Non-user
Potential user
First time user
Regular user
Ex-user
Buyer-Readiness Stage
 Unaware
 Aware
 Informed

21. Cont’d…
 Interested
 Desired
 Intended to buy
User Rate
Loyalty status
 Hard core loyal
 Soft core loyal
 Switchers

22. 5) MARKETING BASIS
Marketing conditions also form an important
basis for market segmentation.
There are latest variables used by modern
marketeers.
This include:-
Degree of competition
Channels of distribution
Buyer with price consciousness

23. 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

24. 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