INDEX

Topic Page No
Introduction
Review of Literature
Objective of the study
Methodology
Limitations of study
Introduction
Nokia
Nokia Vision /Mission statement
About the company
History of Nokia
Company Profile
SWOT Analysis
Introduction to Marketing
Market Segmentation
Consideration for market segmentation
Segmentation Basis
Effective segmentation
Market segmentation of Nokia
Segmentation of Nokia
Lifestyle and psychographic basis for Nokia
Conclusion
Recommendation
Bibliography





Introduction
Introduction to Project
This Project deals with Various Market Segmentation done in Mobile Industries. This
Project mainly focuses on Various Market Segmentation done by Nokia Co. Ltd. in the Market.

Nokia is a world leader in mobile communications, driving the growth and sustainability of the
broader mobility industry. Nokia connects people to each other and the information that matters to
them with easy-to-use and innovative products like mobile phones, devices and solutions for
imaging, games, media and businesses. Nokia provides equipment, solutions and services for
network operators and corporations.

Marketing is one of the most important functions in business. It is the discipline required to
understand customers' needs and the benefits they seek. Academics does not have one commonly
agreed upon definition. Even after a better part of a century the debate continues. In a nutshell it
consists of the social and managerial processes by which products (goods or services) and value
are exchanged in order to fulfill the needs and wants of individuals or groups.
Market segmentation is the process of identifying key groups or segments within the general
market that share specific characteristics and consumer habits. Once the market is broken into
segments, companies can develop advertising programs for each segment, focus advertising on
one or two segments or niches, or develop new products to appeal to one or more of the segments.
Companies often favour this method of marketing to the one-size- fits-all mass marketing
approach, because it allows them to target specific groups that might not be reached by mass
marketing programs. The market can be divided into segments by using four "segmentation
basis": Psychographic, behavioristic, geographic, and demographic
basis. The Basic Criteria for segmenting a market is are customer needs. To find the need of the
customers in the market it is important to undergo a market research Psychographic and
behavioristic bases are used to determine preferences and demand for a product and
advertising content, while geographic and demographic criteria are used to determine product
design and regional focus.

Review of Literature
This literature review will analyze the project on Market Segmentation of Nokia and on past and
current research that has been done which relates to the market segmentation. This critical
analysis of literature contains data about marketing and segmentation strategies collected from
various sources.

It is important to understand why people and market needs to be divided into different segments.
A segmented market is seen as an opportunity to effectively focus on particular
customers. This appeals to potential customers and also marketers, as they know that this is what
they will have to do.

This study also shows how Nokia, a mobile giant, segments its market and focuses its products
efficiently towards the customers of a particular segment. This gives a competitive
advantage to the company by serving its customers well.

Objective of the Study
The objectives of the present study are:-
1) To know about Nokia Company.
2) To know about the strengths, weaknesses, opportunities and threats of Nokia.
3) To know about marketing.
4) To know about market segmentation.
5) To know the market segmentation used by Nokia.


Methodology
Research always starts with a question or a problem. Its purpose is to question through the
application of the scientific method. It is a systematic and intensive study directed towards a more
complete knowledge of the subject studied. Marketing research is the function which
links the consumer, customer and public to the marketer through information-
information used to identify and define marketing opportunities and
problems generate, refine, and evaluate marketing actions, monitor marketing actions,
monitor marketing performance and improve understanding of market as a process.
There are two types of data collection method use in my project report.
Primary data
Secondary data.
For my project, I decided on primary data collection method by approaching customers directly
and through references to know their views about the company.
Secondary data collection method was used by referring to various websites, for collecting
information regarding project under study.

Limitations of Study
1) The study is based on secondary data, the information provided 2
nd
hand about Nokia.
2) The present study suffers from all the limitations of case study method.

Introduction
The company I have chosen to analyse in my project is the mobile phone giant Nokia. This
project tells us briefly what Nokia actually is, its company structure and overall view on the size
and sales of the company & also the Various Market segmentation Strategies followed by them.
Since January 2004, Nokia Group has consisted of four different business groups: Mobile Phones,
Multimedia, Enterprise Solutions and Networks. In addition, there are two horizontal groups that
support the mobile device business groups: Customer and Market Operations and
Technology Platforms. In the year 2004 Nokias net sales for mobile phones were 18507
million euro, which went down 12% from 2003. Nokias market areas were
Europe/Africa/Middle East (55% of net sales), Asian Pacific and China (25%) and Americas
(20%). Nokias market share in Europe was 45.8% in 2003, in 2004 it was 34.8% and in the third
quarter of 2005 it was 36%. The average number of personnel for 2004 was 53511. At the end of
2004, Nokia employed 55505 people worldwide. In 2004, Nokia's personnel increased by a total
of 4146 employees. Nokias turnover for the third quarter of 2005 was 8403 million euro
from which mobile phones brought in 62%, multimedia 17%, Enterprise solutions 2% and
Networks 9%. The year 2004 was demanding for Nokia. In response, the company set five top
priorities in the areas of customer relations, product offering, R&D efficiency, demand- supply
management and the companys ability to offer end-to-end solutions. Nokia is making good
progress in these areas, and is now better positioned to meet future challenges.

Nokia Vision/Mission Statement

Our Vision

A world where everyone can be connected.

In 2015, 5 billion people always connected, and 100 fold more network traffic.

Its a world of experiences, shared experiences.

Our Promise

We help people feel close to what matters to them.

One of our basic needs as human beings is the need to communicate and share.

Our promise is to help fulfil this need, to help them feel close to what matters to them.


Our Approach
Consumer understanding drives us.
We observe first, then design. We act on our consumer insights.
We take a very human approach to technology
1. Simple

2. Reliable
3. Intuitive
4. Experiences to fall in love with.
Internet is our quest. Internet innovation, creativity, media and services will be available
anytime, anywhere.
Nokia wants to bring the best of internet to mobile

Our Resolution-Grow, Transform, Build
Grow the number of people using nokia devices.
Transform the devices people use.
Build new businesses
Our business and peoples expectations for mobile devices and services are changing. Nokias
promise is to help people feel close to what matters to them.

About the Company
Nokia- Connecting People !
Nokia Corporation (NYSE: NOK) is one of the world's largest telecommunications
equipment manufacturers. With headquarters in Keilaniemi of Espoo, Finland, this Finnish
telecommunications company is best known today for its leading range of mobile phones.
Nokia also produces mobile phone infrastructure and other telecommunications equipment
for applications such as traditional voice telephony, ISDN, broadband access,
professional mobile radio, voice over IP, wireless LAN and a line of satellite receivers.

Nokia provides mobile communication equipment for every major market and protocol, including
GSM, CDMA, and WCDMA


Nokia was established in 1865 as a wood-pulp mill by Fredrik Idestam on the banks of Nokia
rapids. Finnish Rubber Works established its factories in the beginning of 20th century nearby
and began using Nokia as its brand. Shortly after World War I Finnish Rubber Works acquired
Nokia wood mills as well as Finnish Cable Works, a producer of telephone and telegraph
cables. All three companies were merged as Nokia Corporation in 1967. The name Nokia
originated from the river which flowed through the town of the same name (Nokia).

In the 1970s Nokia became more involved in the telecommunications industry by
developing the Nokia DX 200, a digital switch for telephone exchanges. In the 1980s, Nokia
offered a series of personal computers called MikroMikko. However, these operations were
sold to International Computers, Ltd. (ICL), which was later merged with Fujitsu-Siemens AG.
Nokia also began developing mobile phones for the NMT network; unfortunately, the
company ran afoul of serious financial problems in the 1990s and streamlined its manufacturing
of mobile phones, mobile phone infrastructure, and other telecommunications areas, divesting
itself of other items, such as televisions and personal computers.

In 2004, Nokia resorted to similar streamlining practices with layoffs and organizational
restructuring, although on a significantly smaller scale. This, however, diminished Nokia's
public image in Finland, and produced a number of court cases along with, at least, one
television show critical of Nokia.

Recently, Nokia joined other mobile phone manufacturers to embrace Taiwanese Original
Device Manufacturers. Nokia signed a contract with BenQ, a Taiwanese Original Device
Manufacturer, to develop three high- end mobile phones, which are scheduled to retail by the end
of 2005.


History of Nokia
Nokia's history started in year 1865, when engineer Fredrik Idestam established a
wood-pulp mill in Southern Finland and started manufacturing paper. Due to the European
industrialization and the growing consumption of paper and cardboard Nokia soon became
successful. In 1895 Fredrik Idestam handed over the reins of the company to his son-in-law.
Nokia was Actually founded in 1965 by Fredrik Idestam in Finland as a paper
manufacturing company. In 1920, Finnish Rubber Works became a part of the company, and later
on in 1922, Finnish Cable Works joined them. All the three companies were merged in 1967 to
form the Nokia Group. Nokia created the NMT mobile phone standard in 1981 and launched the
first NMT phone, Mobira Cityman, in 1987. The company delivered the first GSM network to
Radkilinia, a Finnish company in 1991, and in 1992, Nokia 1011 - a precursor for all Nokias
current GSM phones - was introduced. In the 1990s, Nokia provided GSM services to 90
operators across the world. Another significant move of the company during this
period was the divestment of its non-core operations like IT. The company focused on two core
businesses - mobile phones and telecommunications networks. In the 1990s, Nokia provided
GSM services to 90 operators across the world. Another significant move of the company
during this period was the divestment of its non-core operations like IT. The company
focused on two core businesses - mobile phones and telecommunications networks. Nokia's
history contains many achievements that were the first of their kind in the world. Many
milestones have been experienced in the mobile phone business since the 80s. The success
with the NMT and GSM technologies and the products they spawned secured Nokia's position
as the world's leading telecommunications company. The list of Nokia's milestones
provided a good insight in the history of wireless communications. Nokia has been involved in
making the world's first NMT network and the world's first pocket-sized mobile phone. The
world's first device to use the Symbian OS was also produced by Nokia. Nokia was able to offer
advanced products from the beginning of the 90s. Early investments in R&D were thus
handsomely rewarded.
Nokia ensured its continued growth by reforming its production in the middle of the 90s. The
new phone models and standardized technical solutions made it possible to produce an
increasingly extensive product range more effectively. The extensive range of mobile phone
models, covering all user groups, is one of the reasons why Nokia became the market leader.


Company Profile
Nokias first century:1865-1967
The first Nokia century began with Fredrik Idestam's paper mill on the banks of the Nokianvirta
river. Between 1865 and 1967, the company would become a major industrial force; but it took
a merger with a cable company and a rubber firm to set the new Nokia Corporation on
the path to electronics

1865: The birth of Nokia
Fredrik Idestam establishes a paper mill at the Tammerkoski Rapids in south-western Finland,
where the Nokia story begins

1898: Finnish Rubber Works founded
Eduard Poln founds Finnish Rubber Works, which will later become Nokia's rubber
business.

1912: Finnish Cable Works founded
Arvid Wickstrom starts Finnish Cable Works, the foundation of Nokia's cable and electronics
businesses.

1937: Verner Weckman, industry heavyweight
Former Olympic wrestler Verner Weckman becomes President of Finnish Cable Works.

1960: First electronics department
Cable Works establishes its first electronics department , selling and operating
computers.

1962: First in-house electrical device
The Cable Works electronics department produces its first in-house electrical device - a
pulse analyzer for nuclear power plants.

1967: The merger
Nokia Ab, Finnish Rubber Works and Finnish Cable works formally merge to create Nokia
Corporation

The move to mobile:1968-1991
The newly formed Nokia Corporation was ideally positioned for a pioneering role in
the early evolution of mobile communications. As European telecommunications
markets were deregulated and mobile networks became global, Nokia led the way with some
iconic products...

1979: Mobira Oy, early phone maker
Radio telephone company Mobira Oy begins life as a joint venture between Nokia and leading
Finnish television maker Salora.

1981: The mobile era begins
Nordic Mobile Telephone (NMT), the first international mobile phone network is built

1982: Nokia makes its first digital telephone switch
The Nokia DX200, the companys first digital telephone switch, goes into operation.
1984: Mobira Talkman launched
Nokia launches the Mobira Talkman portable phone.

1987: Mobira Cityman birth of a classic
Nokia launches the Mobira Cityman, the first handheld NMT phone

1991: GSM a new mobile standard opens up
Nokia equipment is used to make the worlds first GSM call

Mobile revolution:1992-1999
In 1992, Nokia decided to focus on its telecommunications business. This was probably the most
important strategic decision in its history.

As adoption of the GSM standard grew, new CEO Jorma Ollila put Nokia at the head of the
mobile telephone industrys global boom and made it the world leader before the end of the
decade...

1992: Jorma Ollila becomes President and CEO
Jorma Ollila becomes President and CEO of Nokia, focusing the company on telecommunications

1992: Nokias first GSM handset
Nokia launches its first GSM handset, the Nokia 1011.

1994: Nokia Tune is launched
Nokia launches the 2100, the first phone to feature the Nokia Tune


1994: Worlds first satellite call
The worlds first satellite call is made, using a Nokia GSM handset.

1997: Snake a classic mobile game
The Nokia 6110 is the first phone to feature Nokias Snake game

1998: Nokia leads the world
Nokia becomes the world leader in mobile phones

1999: The Internet goes mobile
Nokia launches the world's first WAP handset, the Nokia 7110.

Nokia now: 2000-today
Nokias story continues with 3G, mobile multiplayer gaming, multimedia devices and a look to
the future...

2002: First 3G phone
Nokia launches its first 3G phone , the Nokia 6650.

2003: Nokia launches the N-Gage
Mobile gaming goes multiplayer with the N-Gage.

2005: The Nokia Nseries is born
Nokia introduces the next generation of multimedia devices, the Nokia Nseries



2005: The billionth Nokia phone is sold
Nokia sells its billionth phone a Nokia 1100 in Nigeria. Global mobile phone subscriptions
pass 2 billion.

2006: A new President and CEO Nokia today
Olli-Pekka Kallasvuo becomes Nokias President and CEO; Jorma Ollila becomes Chairman of
Nokias board. Nokia and Siemens announce plans for Nokia Siemens Networks

2007
Nokia recognized as 5th most valued brand in the world. Nokia Siemens Networks commences
operations. Nokia launches Ovi, its new internet services brand.

2008
Nokia's three mobile device business groups and the supporting horizontal groups are replaced by
an integrated business segment, Devices & Services.


SWOT Analysis
SWOT Analysis, is a Strategic planning tool used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a Project or in a Business venture. It involves
specifying the objective of the business venture or project and identifying the internal and external
factors that are favourable and unfavorable to achieving that objective.

SWOT Analysis of Nokia
Modern SWOT Analysis
A SWOT analysis conducts an external and internal scan of Nokia's business environment, it is
an important part of the strategic planning process. Environmental factors internal to the
firm usually can be classified as strengths (S), or weaknesses (W), and those external to the
firm can be classified as opportunities (O) or threats (T). Such an analysis of the
strategic environment is referred to as a SWOT analysis. The SWOT analysis provides
information that is helpful in matching the firm's resources and capabilities to the competitive
environment in which it operates. As such, it is instrumental in strategy formulation and selection.

Strengths
1. Is a dominant player in the smart phone market via its majority ownership of
Symbian and its proprietary Series 60 user interface which are projected to represent
majority of the 100M smart phones sold in the next 4 years.
2. 33% market share still the largest cell phone vendor by far, with double the market
share of nearest competitor
3. Size should enable Nokia to amortize R&D costs and to get cost advantages
4. Brand position: probably one of the top 20 brands in the world
Weaknesses
1. The N-Gage is considered a flop
2. Being the market leader and its increase role in Symbian is giving Nokia a bad image,
much like Microsoft in the PC industry.
3. Slow to adopt new ways of thinking: a good example are clamshell phones which are
preferred by many customers. Nokia was reluctant to produce a clamshell until this year,
when it launched its first model.
Opportunities
1. Increase their presence in the CDMA market, which they are just entering, as well as
3G and Edge
2. New growth markets where cell phone adoption still has room to go, including India
and other countries.
3. Leverage its infrastructure business to get preference and a stronger position with
carriers

Threats
1. Late in the game in 3G creates a risk to be displaced by leaders like Motorola, LG, NEC
and others.
2. Asian OEMs who are entering the market very aggressively (TCL, nGo Bird)
3. ODMs (HTC and others) enabling carriers to leverage their customer power bypassing the
handset vendor. Operators want to lessen their dependency on handset vendors and the
dominance of Nokia. Orange, O2, and many other operators globally are selling their own
brand of phones.

Production Units

Networks technology

China

Finland

Germany

India

Mobile devices and technology

Brazil

China

Finland

Great Britain

Hungary

India

Mexico

Romania

South Korea



Introduction to Marketing
"Marketing is the process of planning and executing the conception, pricing, promotion, and
distribution of ideas, goods, services, organizations, and events to create and maintain
relationships that will satisfy individual and organizational objectives." The new definition of
marketing, as released by the American Marketing Association is:-
Marketing is an organizational function and a set of processes for creating, communicating and
delivering value to customers and for managing customer relationships in ways that
benefit the organization and its stakeholders.
"Marketing is a social and managerial process by which individuals and groups obtain what they
need and want through creating and exchanging products and value with others." (Kotler &
Armstrong 1987)
The Mission of marketing is satisfying customer needs. That takes place in a social context. In
developed societies marketing is needed in order to satisfy the needs of society's members.
Industry is the tool of society to produce products for the satisfaction of needs.
Marketing is one of the most important functions in business. It is the discipline required to
understand customers' needs and the benefits they seek. Academics do not have one commonly
agreed upon definition. Even after a better part of a century the debate continues. In a nutshell it
consists of the social and managerial processes by which products (goods or services) and value
are exchanged in order to fulfil the needs and wants of individuals or groups. Although many
people seem to think that "Marketing" and "Advertising" are synonymous, they are not.
Advertising is simply one of the many processes that together constitute Marketing.





What is Marketing?
The term marketing has changed and evolved over a period of time, today marketing is based
around providing continual benefits to the customer, these benefits will be provided and a
transactional exchange will take place.
The Chartered Institute of Marketing define marketing as The management process responsible
for identifying , anticipating and satisfying customer requirements profitability If we look at this
definition in more detail Marketing is a management responsibility and should not be solely
left to junior members of staff. Marketing requires co-ordination, planning, implementation of
campaigns and a competent manager(s) with the appropriate skills to ensure success.
Marketing objectives, goals and targets have to be monitored and met, competitor strategies
analysed, anticipated and exceeded. Through effective use of market and marketing research an
organisation should be able to identify the needs and wants of the customer and try to delivers
benefits that will enhance or add to the customers lifestyle, while at the same time
ensuring that the satisfaction of these needs results in a healthy turnover for the organisation.
Philip Kotler defines marketing as satisfying needs and wants through an exchange process
Within this exchange transaction customers will only exchange what they value (money) if they
feel that their needs are being fully satisfied, clearly the greater the benefit provided the
higher transactional value an organisation can charge.
P.Tailor of www.learnmarketing.net suggests that 'Marketing is not about providing products or
services it is essentially about providing changing benefits to the changing needs and demands of
the customer.






Advantages
- Identifies needs and wants of consumers
- Determines demand for product
- Aids in design of products that fulfill consumers needs
- Outlines measures for generating the cash for daily operation, to repay debts and to turn a
profit
- Identifies competitors and analyzes your product's or firm's competitive
advantage
- Identifies new product areas
- Identifies new and/or potential customers
- Allows for test to see if strategies are giving the desired results

Disadvantages
- Identifies weaknesses in your business skills
- Leads to faulty marketing decisions based on improperly analyzed data
- Creates unrealistic financial projections if information is interpreted incorrectly
- Identifies weaknesses in your overall business plan

Levels of Marketing
Strategic Marketing
Strategic Marketing attempts to determine how an organization competes against its competition
in a market place. In particular, it aims at generating a competitive advantage relative to its
competition.




Operational Marketing
Operational Marketing executes marketing functions to attract and keep customers and to
maximize the value derived from them, as well as to satisfy the customer with prompt services
and meeting the customer expectations. Operational Marketing includes the determination of the
marketing mix.

Functions of Marketing
Market research
Advertising and sales promotion
Public Relations
Selling
Servicing
Methods of payment and credit


The Social Function of Marketing
In modern society production and consumption are apart from each other Marketing connects
them. From the societal point of view, marketing is a philosophy, which shows how to create
effective production systems and consequently prosperity.

Business is a subsystem of society, which has both a social and an economic role. Thus, a
company must operate in a way that will make possible the production of benefits for society and,
at the same time, produce profits for the company itself. (Davis, K. et al. 1980) The role of
marketing in society means also responsibilities. In addition to economic and social
responsibility, ecological responsibility is nowadays emphasized. According to some
definitions, environmental responsibility is part of social responsibility. Improvement of
marketing is related to the changing emphases of economic, social and environmental
responsibility. Goodpaster and Matthews (1982) analyzed three patterns of thought, which can
be distinguished for a company's social responsibility: 1. The invisible hand; 2. The hand of
government; and 3. The hand of management.

1. The invisible hand view (promoted by e.g. Milton Friedman) concludes that the only
social responsibilities of business organizations are to make profits and to obey laws. Free
and competitive market-place will ensure the moral behaviour of companies. The
common good is best served when individuals and organizations pursue competitive
advantage.

2. The hand of government view (promoted by e.g. John Kenneth Galbraith) concludes that
companies are to pursue rational and purely economic objectives. It is the regulatory
hand of the law and political process which guides these objectives towards common
good.

The hand of management view (presented by Goodpaster & Matthews) would put the
responsibility of a company's actions into the hands of the company itself. It is concluded
that the moral responsibilities of an individual may be projected into an organization, and
that the concepts of an individual's responsibility and a company's responsibility are
largely parallel. Therefore, organizations should be no less or no more responsible than ordinary
persons.

The Traditional and Integrated Functions of Marketing
Traditionally, marketing has been seen as a link between production and customer. The situation
could be captured better by using the term selling. Selling is associated to the so- called
"Production and Sales Eras of Marketing". Slogans: "Make what you can make" and "Get rid
of what you have made" describe the traditional view of marketing/selling.

The following figure shows the role of traditionally oriented marketing in (traditionally oriented)
management.

Marketing was born out of a need to take better into consideration the demand factors in
production planning. The function of marketing is to channel information of consumer needs to
the production and satisfaction of needs to consumers. The basic power of marketing is the
aspiration to produce and sell only that kind of products which have demand. Marketing
integrates the whole company to serve this demand. Marketing aims at effective production
systems, where information is transmitted effectively between production and consumption.

























Market Segmentation

Market segmentation is one of two general approaches to marketing; the other is mass-
marketing. In the mass-marketing approach, businesses look at the total market as though
all of its parts were the same and market accordingly. In the market-segmentation
approach, the total market is viewed as being made up of several smaller segments, each
different from the other. This approach enables businesses to identify one or more
appealing segments to which they can profitably target their products and marketing efforts.

The Market-Segmentation process involves multiple steps. The first is to define the market in
terms of the product's end users and their needs. The second is to divide the market into
groups on the basis of their characteristics and buying behaviors.

Possible bases for dividing a total market are different for consumer markets than for industrial
markets. The most common elements used to separate consumer markets are demographic
factors, characteristics, geographic location, and perceived product benefits.

Demographic Segmentation involves dividing the market on the basis of statistical differences in
personal characteristics, such as age, gender, race, income, life stage, occupation, and education
level. Clothing manufacturers, for example, segment on the basis of age groups such as teenagers,
young adults, and mature adults. Jewellers use gender to divide markets. Cosmetics and hair care


companies may use race as a factor; home builders, life stage; professional periodicals,
occupation; and so on.
Psychographic Segmentation is based on traits, attitudes, interests, or lifestyles of potential
customer groups. Companies marketing new products, for instance, seek to identify customer
groups that are positively disposed to new ideas. Firms marketing environmentally friendly
products would single out segments with environmental concerns. Some financial institutions
attempt to isolate and tap into groups with a strong interest in supporting their college, favorite
sports team, or professional organization through logged credit cards. Similarly, marketers of
low-fat or low-calorie products try to identify and match their products with portions of the
market that are health-or weight-conscious.
Geographic Segmentation entails dividing the market on the basis of where people live.
Divisions may be in terms of neighborhoods, cities, counties, states, regions, or even countries.
Considerations related to geographic grouping may include the makeup of the areas, that is,
urban, suburban, or rural; size of the area; climate; or population. For example, manufacturers of
snow-removal equipment focus on identifying potential user segments in areas of heavy snow
accumulation. Because many retail chains are dependent on high-volume traffic, they search for,
and will only locate in, areas with a certain number of people per square mile.
Product Benefit Segmentation is based on the perceived value or advantage consumers receive
from a good or service over alternatives. Thus, markets can be partitioned in terms of the quality,
performance, image, service, special features, or other benefits prospective consumers seek. A
wide spectrum of businessesfrom camera to Automobile Marketersrely on this type of
segmentation to match up with customers. Many companies even market similar products of
different grades or different accompanying services to different groups on the basis of product-
benefit preference.
Factors used to segment industrial markets are grouped along different lines than those used for
consumer markets. Some are very different; some are similar. Industrial markets are often
divided on the basis of organizational variables, such as type of business, company size,
geographic location, or technological base. In other instances, they are segmented along
operational lines such as products made or sold, related processes used, volume used, or end-user
applications. In still other instances, differences in purchase practices provide the segmentation
base. These differences include centralized versus decentralized purchasing; policy regarding
number of vendors; buyer-seller relationships; and similarity of quality, service, or availability
needs.
Although demographic, geographic, and organizational differences enable marketers to narrow
their opportunities, they rarely provide enough specific information to make a decision on
dividing the market. Psychographic data, operational lines, and, in particular, perceived
consumer benefits and preferred business practices are better at pinpointing buyer groupings
but they must be considered against the broader background. Thus, the key is to gather
information on and consider all segmentation bases before making a decision.
Once potential market segments are identified, the third step in the process is to reduce the pool
to those that are (1) large enough to be worth pursuing, (2) potentially profitable, (3) reachable,
and (4) likely to be responsive. The fourth step is to zero in on one or more segments that are the
best targets for the company's product(s) or capacity to expand. After the selection is made, the
business can then design a separate marketing mix for each market segment to be targeted.
Adopting a market-segmentation approach can benefit a company in several specific areas. First,
it can give customer-driven direction to the management of current products. Second, it can
result in more efficient use of marketing resources. Third, it can help identify new opportunities
for growth and expansion. At the same time, it can bring a company the broad benefit of a
competitive advantage.
A company cannot serve all customers in a broad market such as computers or soft drinks. The
customers are too numerous and diverse in their buying requirements. A company needs to
identify the market segments it can serve effectively. Here we will examine levels of
segmentation, patterns of segmentation, market segment procedures, bases for segmenting
consumer and business markets, and requirements for effective segmentation. Many companies
are embracing target marketing. Here sellers distinguish the major market segments, target one
or more of these segments, and develop products and marketing programs tailored to each
instead of scattering.
Market segmentation is the process of identifying key groups or segments within the general
market that share specific characteristics and consumer habits. Once the market is broken into
segments, companies can develop advertising programs for each segment, focus advertising on
one or two segments or niches, or develop new products to appeal to one or more of the
segments.
Considerations for Market Segmentation
To identify segments, marketers examine consumers' interests, tastes, preferences, and
socioeconomic characteristics in order to determine their patterns of consumption and how they
will respond to various marketing strategies. The primary information marketers seek is why
consumers purchase specific products or services but not others. Catalog retailers and direct-
marketing firms make up some of the key users of market segmentation, although many other
kinds of companies and organizations use this technique.




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M Ma ar rk ke et t s se eg gm me en nt ta at ti io on n, , h ho ow we ev ve er r, , w wo or rk ks s e ef ff fe ec ct ti iv ve el ly y o on nl ly y f fo or r c ce er rt ta ai in n k ki in nd ds s o of f p pr ro od du uc ct ts s a an nd d
s se er rv vi ic ce es s. .
F Fi ir rs st t, , t to o d de et te er rm mi in ne e w wh he et th he er r t to o s se eg gm me en nt t a a m ma ar rk ke et t, , m ma ar rk ke et te er rs s m mu us st t f fi in nd d o ou ut t i if f t th he e m ma ar rk ke et t c ca an n b be e
i id de en nt ti if fi ie ed d a an nd d m me ea as su ur re ed d, , w wh hi ic ch h e en nt ta ai il ls s d de et te er rm mi in ni in ng g w wh hi ic ch h c co on ns su um me er rs s b be el lo on ng g t to o s sp pe ec ci if fi ic c m ma ar rk ke et t
s se eg gm me en nt ts s. .
S Se ec co on nd d, , m ma ar rk ke et te er rs s m mu us st t d de et te er rm mi in ne e i if f t th he e s se eg gm me en nt ts s a ar re e l la ar rg ge e e en no ou ug gh h t to o b be e p pr ro of fi it ta ab bl le e. . W Wh hi il le e
m ma ar rk ke et te er rs s c ca an n e ea as si il ly y d di iv vi id de e t th he e t to ot ta al l m ma ar rk ke et t i in nt to o s sm ma al ll le er r g gr ro ou up ps s, , t th he es se e g gr ro ou up ps s m mi ig gh ht t b be e s so o s sm ma al ll l
t th ha at t t th he ey y d do o n no ot t j ju us st ti if fy y t th he e e ex xp pe en ns se es s a as ss so oc ci ia at te ed d w wi it th h m ma ar rk ke et t s se eg gm me en nt ta at ti io on n. .
T Th hi ir rd d, , m ma ar rk ke et te er rs s m mu us st t b be e a ab bl le e t to o r re ea ac ch h t th he e s se eg gm me en nt ts s t th hr ro ou ug gh h t th he ei ir r a ad dv ve er rt ti is si in ng g. . I If f t th he e m me em mb be er rs s o of f
a a p pa ar rt ti ic cu ul la ar r s se eg gm me en nt t d do o n no ot t s sh ha ar re e i in nt te er re es st t i in n a a c co om mm mo on n m ma ag ga az zi in ne e o or r t te el le ev vi is si io on n s sh ho ow w, , f fo or r
e ex xa am mp pl le e, , t th he en n m ma ar rk ke et te er rs s h ha av ve e n no o w wa ay y o of f r re ea ac ch hi in ng g t th he e s se eg gm me en nt t a an nd d s so o t th he e s se eg gm me en nt t i is s s su up pe er rf fl lu uo ou us s. .
F Fo ou ur rt th h, , m ma ar rk ke et te er rs s m mu us st t g ga au ug ge e t th he e r re es sp po on ns si iv ve en ne es ss s o of f t th he e s se eg gm me en nt ts s a an nd d f fi in nd d o ou ut t i if f a a p pr ro op po os se ed d
s se eg gm me en nt t w wo ou ul ld d l li ik ke el ly y r re es sp po on nd d t to o a a m ma ar rk ke et ti in ng g c ca am mp pa ai ig gn n. . I If f i it t i is s n no ot t p pr ro ob ba ab bl le e t th ha at t a a s se eg gm me en nt t w wi il ll l
r re ea ac ct t t to o a a p pr ro om mo ot ti io on n, , t th he en n t th he e s se eg gm me en nt t i is s n no ot t u us se ef fu ul l. .
F Fi if ft th h, , m ma ar rk ke et te er rs s m mu us st t d de et te er rm mi in ne e i if f t th he e s se eg gm me en nt ts s w wi il ll l c ch ha an ng ge e i in n t th he e n ne ea ar r f fu ut tu ur re e. . S Si in nc ce e i it t t ta ak ke es s
t ti im me e t to o p pr re ep pa ar re e a a m ma ar rk ke et ti in ng g s st tr ra at te eg gy y f fo or r s sp pe ec ci if fi ic c s se eg gm me en nt t a an nd d s si in nc ce e i it t t ta ak ke es s t ti im me e f fo or r m ma ar rk ke et t
s se eg gm me en nt ta at ti io on n t to o b be e p pr ro of fi it ta ab bl le e, , c cr re ea at ti in ng g s se eg gm me en nt ts s w wh he er re e c co on ns su um me er r n ne ee ed ds s a an nd d w wa an nt ts s a ar re e l li ik ke el ly y t to o
c ch ha an ng ge e w wo ou ul ld d n no ot t b be e p pr ro od du uc ct ti iv ve e. .



R Re ep pr re es se en nt ta at ti io on n o of f M Ma ar rk ke et t S Se eg gm me en nt t
M Ma ar rk ke et t D De em ma an nd d
Aggregate of the demands of all potential customers (market participants) for a specific product
over a specific period in a specific market.
Market segment
Identifiable group of individuals, families, firms, or organizations, sharing one or more
characteristics or needs in an otherwise homogenous market. Market segments generally respond
in a predictable manner to a marketing or promotion offer.
1. Set of potential customers:
W Wh ho o h ha av ve e s si im mi il la ar r n ne ee ed ds s
W Wh ho o r re ef fe er re en nc ce e e ea ac ch h o ot th he er r w wh he en n b bu uy yi in ng g
2 2. . A Ar re e a al li ik ke e i in n t th he e w wa ay y t th he ey y: :
P Pe er rc ce ei iv ve e v va al lu ue e
V Vi ie ew w p pr ro od du uc ct ts s a an nd d s se er rv vi ic ce es s
P Pu ur rc ch ha as se e p pr ro od du uc ct ts s a an nd d s se er rv vi ic ce es s
W Wh hy y D De ef fi in ne e A A M Ma ar rk ke et t S Se eg gm me en nt t? ?
E Ea as si ie er r t to o u un nd de er rs st ta an nd d c cu us st to om me er r n ne ee ed ds s
F Fo oc cu us s w wh ho ol le e s so ol lu ut ti io on n t to o a a n na ar rr ro ow we er r s se et t o of f c cu us st to om me er r n ne ee ed ds s
E Ea as si ie er r t to o b be ec co om me e a a l le ea ad de er r i in n a a s sm ma al ll le er r m ma ar rk ke et t ( (B Bi ig g f fi is sh h i in n s sm ma al ll l p po on nd d) )
M Mo or re e e ef ff fe ec ct ti iv ve e u us se e o of f m ma ar rk ke et ti in ng g d do ol ll la ar rs s
G Ge en ne er ra al ll ly y m mo or re e p pr ro of fi it ta ab bl le e
Why Market Segmentation?
A major key to a companys success is its ability to select the most appropriate market
segmentation because a company cannot target whole market. There are general guidelines
for selection of target markets:

Target market should be compatible with the organization goals and image.
The target market should match the marketing opportunity with the companys
resources.
An organization should consciously seek markets that will generate a sufficient
sales volume at a low cost to result in a profit.
A company should select a market wherein the number of competitors and their
size are small.
The total markets for many products is to varied-too heterogeneous. This variation Is due
to the differences in buying habits ways to use the products motives for buying etc.
Market segmentation takes these difficulties into account.

Benefits of Market Segmentation
Better marketing job and efficient use of marketing resources.
Small firm with limited resources can compete effectively in one or two market
segments.
A company can design products that really match the market demands.
Advertising media can be used more effectively toward each segment of market.

Drawbacks of Market Segmentation upto some extent
It is an expensive proposition in both the production and marketing of products.
Segmentation increases marketing expenses in several ways i.e. Inventory cost goes up,
advertising cost goes up, administrative expense goes up.
S Se eg gm me en nt ta at ti io on n B Ba as si is s
The market can be divided into segments by using four "segmentation basis": Psychographic,
behavioristic, geographic, and demographic basis.
T Th he e b ba as si ic c c cr ri it te er ri ia a f fo or r s se eg gm me en nt ti in ng g a a m ma ar rk ke et t i is s a ar re e c cu us st to om me er r n ne ee ed ds s. . T To o f fi in nd d t th he e n ne ee ed ds s o of f t th he e
c cu us st to om me er rs s i in n t th he e m ma ar rk ke et t i it t i is s i im mp po or rt ta an nt t t to o u un nd de er rg go o a a m ma ar rk ke et t r re es se ea ar rc ch h. .
Psychographic and behavioristic bases are used to determine preferences and demand for a
product and advertising content, while geographic and demographic criteria are used to
determine product design and regional focus.
D Di if ff fe er re en nt t m ma ar rk ke et t v va ar ri ia ab bl le es s
Geographic s se eg gm me en nt ta at ti io on n
Geographic basis focus on preferences contingent on regional factors, such as region (e.g., North
or South), county, population density, urban or rural location, and climate. Collecting and
analyzing information according to the physical location of the customer or other data source.
Geographic segmentation is often used in marketing, since companies selling products and
services would like to know where their products are being sold in order to increase advertising
and sales efforts there.
Geographic segmentation calls for dividing the market into different geographical units such as
nation, states, regions, countries, cities, or neighborhoods . The company can operate in one or a
few geographic areas, or operate in all but pay attention to local variations .
D De em mo og gr ra ap ph hi ic c S Se eg gm me en nt ta at ti io on n
Market segmentation based on differences in demographic factors (which normally match
consumer wants and needs) of different groups of consumers. It is one of the five common
segmentation strategies, and aims to define specific niches that require custom-tailored
promotion.
Demographics include personal characteristics such as gender, age, marital status, social
attributes (such as ethnicity and religion), and income level.
In demographic segmentation , the market is divided into groups on the basis of variables such as
age , family life cycle , gender , income , occupation , education , religion , race , generation ,
nationality , and social class. Demographic variables are the most popular bases for
distinguishing customer groups. One reason is that consumer wants, preferences, and usage rates
are often associated with demographic variables. Another is that demographic variables are
easier to measure.
Age and Life-Cycle Stage
Consumer wants and abilities change with age. Age and life cycle can be tricky variables. For
example, the Ford Motor Company designed its Mustang automobile to appeal to young people
who wanted an inexpensive sports car . But Ford found that many mustangs were purchased by
older buyers. It then realized that its target market was not the chronologically young but the
psychologically young.
Life Stage
Person in the same part of the life cycle may differ in their life stage. Life stage defines a
persons major concern, such as going through a divorce, going into a second marriage, taking
care of older parents, deciding to cohabit with another person, deciding to buy a new home, and
so on.


Gender
Men and women tend to have different attitudinal and behavioral orientations, based partly on
genetic makeup and partly on socialization practices.
Gender differentiation has long been applied in clothing, hairstyling, cosmetics and magazines.
The automobiles industry is beginning to recognize gender segmentation, since there are now
more women car owners, some manufacturers are designing features to appeal to women,
although they stop short of advertising the cars as womens cars.
Income
Income segmentation is long- standing practice in such products and services categories as
automobiles, boats, clothing, cosmetics, and travel. However, income does not always predict the
best customers for a given product.
Generation
Many researchers are now turning to generation segmentation. Each generation is profoundly
influenced by the times in which it grows up- the music, movies, politics, and defining events of
that period. Demographers call these groups cohorts.
Social Class
Social class has a strong influence on preference in cars, clothing, home, furnishings, leisure
activities, reading habits, and retailers. Many companies design products and services for
specific social classes.


P Ps sy yc ch ho og gr ra ap ph hi ic c S Se eg gm me en nt ta at ti io on n
The division of a heterogeneous market into relatively homogeneous groups on the basis of their
attitudes, beliefs, opinions, personalities and lifestyles; sometimes called "State-of-Mind"
Segmentation.
Personality the distinctive character of an individual; used as a basis for the psychographic
segmentation of a market in which individuals of relatively similar personality, with similar
needs or wants, are grouped into one segment.
In psychographic segmentation, buyers are divided into different groups on the basis of lifestyle
or personality or values. People within the same demographic group can exhibit very different
psychographic profiles.
Lifestyle
People exhibit many more lifestyles than are suggested by the seven social classes. People differ
in attitudes, interest, activities, and these affect the goods and services they consume. Companies
making cosmetics and furniture are always seeking opportunities in lifestyles segmentation, but
lifestyle segmentation does not always work.
Personality
Markers have used personality variables to segment markets. They endow their products with a
brand personality that corresponds to a target consumer personality. The company utilizes
product features, services, and image making to transmit the products personality.
Values
Some markers segment by core values. Core values go much deeper than behavior or attitude,
and determine, at a basic level, peoples choices and desires over the long term.
Behavioral S Se eg gm me en nt ta at ti io on n
Market segmentation based on differences in the consumption behavior of different groups of
consumerstheir life-styles, patterns of buying and using, patterns of spending money and time,
etc. One of the five common segmentation strategies, its objective is to define specific niches
that require custom tailored promotion. In behavioral segmentation, buyers are divided into
groups on the basis of their knowledge of, attitude toward, use of, or response to a product. Many
marketers believe that behavioral variables-occasions, benefits, user status, usage rate, loyalty
status, buyer-readiness stage, and attitudeare the best starting points for constructing market
segments.
Occasions
Buyers can be distinguished according to the occasions when they develop a need, purchase a
product, or use a product. Occasions segmentation can help firms expand product usage. For
example in Pakistan tea is usually consumed at breakfast. A company can consider occasions of
critical life events or transitions-marriage, childbirth, illness, relocation, career changeas
giving rise to new needs.
Benefits
Buyers can be classified according to the benefits they seek, people vary considerably in the
benefits they seek from the same product.
1. Road Warriors: premium products and quality service. (16%)
2. Generation F: fast fuel, fast service, and fast food. (27%)
3. True Blues: branded products and reliable service. (16%)
4. Home bodies: convenience. (21%)
5. Price Shoppers: Low price. (20%)

User Status
Markets can be segmented into nonuser, ex-users, potential users, first time users, and regular
users of a product. Market-share leaders tend to focus on attracting potential users because they
have the most to gain. Smaller firms focus on trying to attract current users away from the
market leader.
Usage Rate
Markets can be segmented into light, medium, and heavy product users. Heavy users are often a
small percentage of the market but account for high percentage of total consumption
Loyalty Status
Consumers have varying degrees of loyalty to specific brands, stores, and companies. Buyers can
be divided into four groups according to brand loyalty status:
1. Hard-core loyals: Consumers who are buy one brand all the time.
2. Split loyals: Consumers who are loyal to two or three brands.
3. Shifting loyals: Consumers who shift from one brand to another.
4. Switchers: Consumers who show no loyalty to any brand.
Buyer-readiness stage
A market consists of people in different stages of readiness to buy a product. Some are unaware
of the product, some are aware, some are informed, some are interested, some desire the product,
and some intend to buy. The relative numbers make a big difference in designing the marketing
program.


Attitude
Five attitude groups can be found in a market: enthusiastic, positive, indifferent, negative, and
hostile. Door-to-door workers in political campaign use the voters attitude to determine how
much time to spend with that voter. They thank to enthusiastic voters and remind them to vote;
they reinforce those who are positively disposed; they try to win the votes of indifferent voters;
they spend no time trying to change the attitudes of negative and hostile voters.
U Us sa ag ge e S Se eg gm me en nt ta at ti io on n
There are two ways of carrying out usage segmentation; firstly customers are split according to
their weight of use. - heavy users/buyers being more important targets than light users.
This segmentation can be carried out directly on customer databases and can be extremely
powerful in focusing activity based on the value to the business, not just the number of contacts.
Patterns of Market Segmentation
Market segments can be build up in many ways, one way is to identify preference segments. For
example cookies buyers are asked how much they value sweetness and saltiness in biscuits as
two product attributes. Three different patterns can emerge.
1. Homogeneous Preferences: shows a market where all the consumers have roughly
the same preferences. The market shows no natural segments. We would predict that
existing brands would be similar and cluster around the middle of the scale in both
sweetness & saltiness.
2. Diffused Preferences: At the other extreme, consumer preferences maybe scattered
throughout the space, indicating that customers vary greatly in their preferences. The first
brand to enter the market is likely to position in the center to appeal to the most people.
3. Clustered Preferences: The market might reveal distinct preference clusters, called
natural market segments. The first firm in this market has three options. It might position
in the center, hoping to appeal to all groups. It might position in the largest market
segment (concentrated marketing).It might develop several brands, each positioned in a
different segment. If the first firm developed only one brand, competitors would enter
and introduce brands in the other segments.
T Th he e S Se eg gm me en nt ta at ti io on n P Pr ro oc ce es ss s
Once a company has gathered information from these segmentation bases, it must decide how to
divide the market, bearing in mind that market segmentation seeks to minimize the differences
within a segment and maximize the differences among segments. Consequently, depending on
the product or service to be marketed, simple divisions along age, gender, or geographic lines
alone may yield segments that are too vague to be of use. Instead, marketers may have to
consider several characteristics or clusters of characteristics in order to divide the market into
useful segments.
For example, when considering beer consumption, marketers must look at both age and gender:
the majority of beer drinkers are both young and male.
To begin segmenting the market, marketing managers must select the segmentation bases
they will use to develop the segments, depending on the products or services to be
marketed. Marketers may select a few segmentation bases they believe are the most
relevant at the outset and develop market segments using them. On the other hand, they
may compile a large array of information using all the segmentation bases and use this
information to group consumers in various segments.
Next, marketers conduct any primary market analysis they may need, by preparing
questionnaires and samples and by assessing the response to them. Using this
information, marketers try to determine the most fruitful segmentsthe ones with
greatest similarities within them. Because this process can be labor-intensive and require
advanced knowledge of statistics, companies often rely on outside firms or artificial
intelligence technology to produce meaningful market segments.
Once relevant, stable, reachable, profitable market segments are established, marketers
can target the segments they believe will offer the best opportunities for growth given
their products and resources and the ones they believe that correspond to the products
being marketed the best. Finally, marketers can develop and launch advertising
campaigns that appeal to the various segments.
Companies tend to choose the largest segments, although the segments with the most consumers
are not always the most profitable and usually have the most competition. Consequently,
marketers might benefit from considering targeting smaller segments or segments ignored by
competitors, such as low-income consumers, which is frequently referred to as niche
marketing.
M Me et th ho od d o of f S Se eg gm me en nt ta at ti io on n
A company also may opt to target just one segment of the market, employing the market
segmentation method of concentration. After considering various segmentation bases and
conducting research, a company might find that its competitors are not reaching specific segments
and decide to target this segment or niche exclusively. A computer maker, for instance, could
concentrate solely on the home-user segment of the market and ignore the needs of the other
segments. To do so, the computer maker would have to offer products that meet home-user needs
at prices these consumers could afford. Since concentrated marketing costs less than differentiated
marketing, it may appeal to small businesses in particular.
After choosing a method of market segmentation, marketers must integrate the method into an
overall marketing strategy. The marketing strategy will try to make the target product or service
appeal to the target segment through an advertising campaign developed based on segmentation
information such as age, gender, or location. Marketers also consider what a company's strategic
position in a market ise.g., if it is a computer supplier to home users or businessesand
creates a marketing program that will help a company achieves or maintain this position. If the
segment is properly defined for a specific product or service, then developing promotional
strategies and reaching the target segment should be relatively easy. The information used to
help create the market segments should help marketers choose among promotional techniques
(e.g., direct marketing, advertising, publicity, and sales promotion), pricing strategies, and
distribution strategies. This information also should help marketers choose among various
advertising media.
After collecting a large amount of information about their customers, marketers can plan
promotions and products that will appeal to various segments over a long time by determining
what products a segment wants in the future and offering them at the appropriate time
T Ta ar rg ge et t C Co os st ti in ng g
Is a disciplined process that uses data and information in a logical series of steps to determine
and achieve a target cost for the product. In addition, the price and cost are for specified product
functionality, which is determined from understanding the needs of the customer and the
willingness of the customer to pay for each function.
T Th he e B Ba as si ic c P Pr ro oc ce es ss s: the basic stages in the Target-Costing process:
1. define the product
2. set the target
3. achieve the target
4. maintain competitive cost


The stages are market-driven:
Define the Product answers the fundamental questions of What are you selling? To
whom? What do they want it to do?
Set the Target addresses the issue of What will they pay for it? What should it cost to
produce?
Achieve the Target is concerned with How can we get there? Are we getting there?
Maintain Competitive Cost deals with How can we stay ahead?
E En nt tr re ep pr re en ne eu ur ri ia al l S St tr ra at te eg gy y: :
D De ef fi in ne e m ma ar rk ke et t s se eg gm me en nt t s sm ma al ll l e en no ou ug gh h t to o a al ll lo ow w y yo ou u t to o c ca ap pt tu ur re e 2 25 5% % t to o 3 30 0% % s sh ha ar re e
B Be e a a B Bi ig g f fi is sh h i in n s sm ma al ll l p po on nd d
I Id de ea al l: : B Be e t th he e o on nl ly y s su up pp pl li ie er r i in n a a v ve er ry y n na ar rr ro ow wl ly y d de ef fi in ne ed d m ma ar rk ke et t. .
Effective Segmentation
Not all segmentation is useful. For example, table salt buyers could be divided into blond and
brunette customers, but hair color is not relevant to the purchase of salt. Furthermore, if all salt
buyers buy the same amount of salt each month, believe all salt is the same, and would pay only
one price for salt, this market would be minimally segmentable from a marketing point of view.
To be useful, market segment must be:
Measurable: The size, purchasing power, and characteristics of the segment can be measured.
Substantial: The segments are large and profitable enough to serve. A segment should be the
largest possible homogeneous group worth going after with a tailored marketing program. It
would not pay, for example, for an automobile manufacturer to develop cars for people who are
under four feet tall.
Accessible: The segments can be effectively reached and served.
Differentiable: The segments are conceptually distinguishable and respond differently to
different marketing-mix elements and programs. If married and unmarried women respond
similarly to a sale on perfume, they do not constitute separate segments.
Actionable: Effective programs can be formulated for attracting and serving the segments.
Market Segmentation for Nokia
The decibel levels in the cellular market are increasing with service providers stepping on the
gas. Not to be left behind, handset manufacturers are using precise segmentation to carve up their
share. Divide and rule seems to be working!
According to a report published in May 2001, the all-India cellular subscriber figures stand at
38,71,514. With aggressive marketing by service providers, this figure is expected to increase at
a very rapid rate. If current decibel levels in the market are anything to go by, these expectations
are well on the way to being met. However, amidst this entire melee one cannot ignore the
efforts of the handset manufacturers. Both service providers and handset manufacturers have
been complementing each other well with each fuelling the demand for the other.
Industry observers attribute the success of handset manufacturers to shrewd market
segmentation. The big three of the mobile handset market - Nokia, Ericsson and Motorola, have
studied the market and segmented it precisely.




Segmentation of Nokia
Connecting people!
Nokia, arguably the biggest player in the world, has divided the market into four segments:
Hi-fliers: The biggest segment as far as Nokia is concerned consists of 'Hi-Fliers',
corporate executives who use a mobile phone to increase productivity at work. Aged
between 25-45, the segment looks for data transmission and other business-related
features. In most cases, the company sponsors the handset, hence price is not a major
consideration.
Trendsetters: In any technology adoption cycle, the first segment to adopt an
emerging technology is dubbed as 'the early adopters'. For Nokia, these early adopters are
'Trendsetters' who are most receptive to advanced models. This was the segment at which
WAP-enabled models were aimed.
Social contact: The third segment for Nokia is the upwardly mobile, socially-
conscious segment that uses a mobile to stay in touch. Today's youth and affluent
housewives constitute two major chunks of the segment.
Assured: The fourth and last segment as defined by Nokia comprises of CEOs, high-
profile celebrities, industrialists and other high "net worth" individuals. The fact that the
segment cannot do without a mobile phone makes it the 'assured' segment.
Geographic
World region Asia
Country India
Cities Reach out maximum places
Demographic
Age All age group
Gender Male, Female
Income All income groups
Occupation Every sector
Religion Irrespective of religion
Psychographic
Social class All class of people
Lifestyles Urban, rural, and even far villages
Behavioural
Benefits Quality
Loyalty status Strong



Lifestyle and Psychographic Basis for Nokia
The descriptors of segmentation are:
Activities
Interests
Opinions




Conclusion
From the above project I have come to this conclusion that Nokia has implemented various
segmentation strategies for its products on a large scale & becoming no.1 leader in the world of
mobile phones. Nokia segments its market according to various variables. The main
segmentation is done on the basis of price. As per my opinion Nokia had introduced various
schemes to attract people & gain more goodwill into market. I would like to conclude that Nokia
had been launching various new products & strategies throughout the year but still it is the no.1
brand leader in mobile phones. Many people around the globe are purchasing Nokia phones, as
they are very cheap, good & efficient to operate. Nokia have used better & efficient market
segmentation strategies to market its products according to various segments of customers in the
market. Nokia as such has used all modern & good techniques to tackle problems of customers in
market. Customer care & feedback is also given more importance. Better, efficient & advanced
techniques are used to increase the sales of product. Also Nokia is largest manufacturer of
mobile phones in India & also the no.1 leader in it. Various segmentation strategies are being
enrolled into the market to increase the sales of the products. New models & their strategies are
being well utilized to enhance the product.







Recommendations
I would like to provide certain recommendations towards this Project report. They are as
follows:
I would like to suggest that the Marketing areas for Sales should be increased. They
should try to adopt new strategies to regain whole sales force in the market.

As far as launching of new models is concerned, the Company should try to offer sales of
such products at an affordable Price.

The Company should try to bring more attractive offers & discounts to the customers of
segments to make them more brand loyal towards them.

















Bibliography


Websites visited:

www.nokia.com
http://www.nokia.com/about-nokia/company

www.google.com
http://www.google.co.in/#hl=en&source=hp&q=market+segmentation+of+nokia&meta=&aq=7
&aqi=g10&aql=&oq=market+se&gs_rfai=&fp=fe4cbc854b7cd67d

www.scribd.com
http://www.scribd.com/search?cat=redesign&q=project+on+nokia&sa.x=43&sa.y=15