Market Segmentation

What is market segmentation is exactly

Market Segmentation is dividing the market into different categories on the basis of different groups .

Advantages of Segmentation
1. The process of breaking up a homogeneous market into heterogeneous segments forces the marketer to analyse and consider both the needs of the market and the companys ability to competently serve those needs thereby making the company better informed about its customers 2. Competitor offerings and marketing positioning must also be analysed in this context so the company must consider what its competitive advantages and disadvantages are, helping it to clarify its own positioning strategy 3. Limited resources are used to best advantage, targeted at those segments that offer the best potential

Requirements for Effective Segmentation

Measurable

Size, purchasing power, profiles of segments can be measured. Segments can be effectively reached and served.

Accessible

Substantial

Segments are large or profitable enough to serve.

Differential

Segments must respond differently to different marketing mix elements & programs.

Actionable

Effective programs can be designed to attract and serve the segments.

Step 1. Market Segmentation

Levels of Market Segmentation
Mass Marketing
Same product to all consumers (no segmentation)

Segment Marketing
Different products to one or more segments (some segmentation)

Niche Marketing
Different products to subgroups within segments (more segmentation)

Micromarketing
Products to suit the tastes of individuals and locations (complete segmentation)
Local Marketing
Tailoring brands/ promotions to local customer groups

Individual Marketing
Tailoring products/ programs to individual customers

Step 1. Market Segmentation

Bases for Segmenting Consumer Markets
Geographic
Nations, states, regions or cities

Demographic
Age, gender, family size and life cycle, or income

Psychographic
Social class, lifestyle, or personality

Behavioural
Occasions, benefits sought, user status, usage rate, loyalty

Step 1. Market Segmentation

Bases for Segmenting Business Markets
Personal Characteristics

Demographics

Situational Factors

Bases for Segmenting Business Markets

Operating Characteristics

Purchasing Approaches

Segmenting Business Markets

Segmentation by customer size or geographic location
Four segments of business customers
Programmed buyers Relationship buyers Transaction buyers

Bargain hunters

Step 1. Market Segmentation

Bases for Segmenting International Markets

Industrial Markets

Geographic

Economic

Political/ Legal

Cultural

Intermarket

Case Study

Nestle

WAYS OF MARKET SEGMENTATION

WITH AN ALREADY EXISTING PRODUCT .

WITH NEW PRODUCT DEVELOPMENT.

DEMOGRAPHICS VS PSYCHOGRAPHICS
DIVIDES THE GROUP ON THE BASIS OF Age Family Size Gender Income Education Occupation Social Class DIVIDES THE GROUP ON THE BASIS OF

LifeStyle Personality

DEMOGRAPHICS IS QUANTITATIVE WHEREAS PSYCHOGRAPHICS IS QUALITATIVE.

Other factors affecting Mkt. Segmentation

Size Of The market.

Potential Of The Market.

Number Of Competitors.

Entry Barriers

Nestle Products Market Segmentation Strategies

Maggie MILO
Kitkat / Munch

Maggie
Launched in 1982

Entirely new concept of making noodles

Targeted towards teenagers through mothers
Demographics Age groups 8 to 14 years Social Class Working House Holds Size Of Family - Nuclear Psychographics Life Style Fast Movers Personality Ready To Experiment

Health beverages
Malted beverages can be segmented as: - White beverages (65%) - Brown beverages (35%) Initial focus on children as the target segment Gradually the positioning extended to health drinks for the entire family. Targeted different consumer segments such as - Junior brands for infants - Separate formulations for expecting mothers Complan -extra nutrients Horlicks-extra calcium

MILO
Introduced in 1996-97 . Has about 3.3 per cent of the Indian HFD market
Demographics Psychographics

Targeted at children, primarily boys in the 5-12 age bracket

Centered around the winning moment Health conscious Sportsmen as role model

Baichung Bhutia / Leander Paes are the brand ambassadors.

Kit Kat / Munch

Both were launched around mid-nineties. Munch, a chocolate wafer product like KitKat , has been launched to create a further segmentation in the 16,000-tonne per annum chocolates market .

Munch forges a whole new segment around a wafer.

Kit Kat / Munch

Demographics

Psychographics

Initially targeted to premium segment gradually moved to low price segment

Consumer's desire for a good value for money Light Low dietary value

RE-POSITIONING Milkmaid

Earlier positioned as milk powder.

Gradually shifted to condensed milk for desserts.

Thank You