Market Segmentation

Market Segmentation Research

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Outline        

Market segmentation Bases for segmentation Effective Market Segmentation Target Marketing Brand Positioning Components of positioning Repositioning Integration of market segmentation & Brand Positioning

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Market segmentation 

The process by which the diverse market for a product is divided into several segments & sub segments.

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Why? 

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Difficulty in catering to the demand of the total market.

Components  Each segment content is homogenous in all aspects.  Each segment is different from one another.  Each segment has a separate demand type/schedule.

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Segmentation variables I. II.

Consumer Market e.g. ITC Business Market e.g. SAP, Infosys

Segmentation variables for Consumer Market a) b) c) d)

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Demographic Segmentation Geographic segmentation Psychographic Segmentation Behaviorist Segmentation

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Demographic segmentation 

Age and life cycle stage

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Gender

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Income

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Generation

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Social class

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Psychographic Segmentation 

Psychology or personality traits

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Lifestyle: Culture oriented, Sports oriented, Outdoor oriented, Time Constrained Customers E.g. Cadbury’s Diary Milk Celebration, Puma, Ford Endeavor, Instant Noodles; Titan Watches

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Personality: Compulsive (Harley Davidson), Gregarious (Mountain Dew), Authoritarian (Reid and Taylor), Ambitious (Citizen Watches, Adidas) VALS Framework classification

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Behavioral segmentation 

Occasions

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Benefits

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User status

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Usage rate

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Loyalty status

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Segmentation Variables for Business Markets 

Demographic:   

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Operating Variables  

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Purchasing-function organization: Centralized or decentralized ? Power domination structure: Engineering, Financial, Software Relationship Purchasing criteria of the Companies: Quality? Price? Service?

Situational factors  

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Technology User or non-user

Purchasing approaches: 

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Industry Company size Location

Urgency: time factor? Size of order: Large or Smalls?

Personal characteristics   

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Attitudes toward risk: Risk Takers or Risk Avoiders? Loyalty: Loyals or Switchers? Buyer-seller similarity: value similar?

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Requirements for Effective Market Segmentation 

Measurable.

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Substantial.

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Accessible.

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Differentiable.

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Actionable.

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Target Marketing 

After identifying market-segment opportunity How many & how to target?

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Three strategies for what to Target:

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Undifferentiated Marketing Concentrated marketing Differentiated marketing;

How to do:    

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Analysis of each segment as a distinct opportunity. Variables such as: resources, product life cycle stage. Concentrated Marketing efforts Positioning

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Brand positioning 

Act of designing the company’s offerings and image to occupy a distinctive place in the mind of the target market.

“It is what you do to the mind of the target to get an entry, to stay there further and to become the most preferred” -Al Rice and Jack Trout

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Four components of positioning 

Market structure

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Consumer segmentation

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Consumer perception: Perceptual mapping

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Benefits vs cost

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Perceptual Mapping

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Repositioning 

Changing the position of a brand.  for Increase relevance to the consumer  Increasing occasions for use  Search for a viable position  Making the brand serious  Making the brand contemporary  Targeting new customers  Differentiating from other brands 

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Thank You

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