MARKET SEGMENTATION

DEFINITION:- According to Philip Kotler “Market

Segmentation is the subdividing of market into
homogeneous sub-set of customers, where any subset
may conceivably be selected as market target to be
reached with distinct Marketing Mix.

According to William Stanton, “Market Segmentation

consists of taking the total heterogeneous market for a
product and dividing it into several sub-market of
segments, each of which tends to be homogeneous in full
significant aspects.

Thus, Market Segmentation is a process of grouping two

or more customers for a product or services so as to
serve their needs in a better way.

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 IMPORTANCE OF MARKET
SEGMENTATION
1.Allocation of Market budget.

2.Adjustment of the product to the market need.

3. To estimate level of sales in a given market

4. To overcome competition effectively.

5. To develop effective marketing programme.

6. To promote marketing activities.

7. To modify the existing product or to develop new

product to satisfy needs of potential buyers.
8. To have more precise definition of market

9. To contribute towards achieving company goals.

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 IDENTIFYING MARKET SEGMENTS &
SELECTING TARGET MARKETS
LEVELS OF MARKET SEGMENTATION
1.SEGMENT MARKETING:
A Market segments consists of a group of customers who
share a similar set of wants.

2.NICHE MARKETING: A niche is more narrowly defined

group seeking a distinctive mix of benefits

3.LOCAL MARKETING:
Target Marketing is leading to marketing programs
tailored to the needs & wants of local customer groups.

4.INDIVIDUAL CUSTOMER MARKETING:

The ultimate level of segmentation leads to ‘Segment of
One’
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 PATTERNS OF MARKETING SEGMENTATION

1.HOMOGENEOUS PREFERENCES: All the consumer have roughly

the same preferences.

2. DIFFERED PREFERENCES: Consumers Preferences may be

scattered through out the space, indicating that consumers vary
greatly in their preferences

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 3. CLUSTERED PREFERENCES:

The marketing might reveal distinct

preference clusters, called natural
marketing segment.

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 STEPS IN SEGMENTATION
PROCESS
 NEED BASED SEGMENTATION

 SEGMENT IDENTIFICATION

 SEGMENT ATTRACTIVENSS

 SEGMENT PROFITABILITY

 SEGMENT POSITIONING

 SEGMENT ‘ACID TEST’

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 MARKETING-MIX STRAGEGY 6
 BASES FOR SEGMENTING
CONSUMER MARKET

MARKET SEGMENTATION

CONSUMER BEHAVIOURAL OR
CHARACTERISTICS CONSUMER RESP.

BENEFITS
GEOGRAPHIC
USAGE
DEMOGRAPHIC
LOYALTY
SOCIO-ECONOMIC
OCCASIONS
PSYCHOGRAPHIC
STATUS OF USERS

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 BASES FOR SEGMENTING
BUSINESS MARKETS
 DEMOGRAPHIC: Industry, Company size.

 OPERATING VARIABLES: Technology, User

or Non-user status, Customer capabilities.

 PURCHASING APROACHES: Centralized or

Decentralized purchasing etc.,

 SITUATIONAL FACTORS: Urgently, specific

application, size of orders

 PERSONAL CHARACTERISTICS: Buyer-Seller

similarity, attitude towards risks, loyalty.
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 BASICS OF EFFECTIVE
SEGMENTATION

 MEASURABLE

 SUBSTANTIAL

 ACCESSIBLE

 DIFFERENTIABLE

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