Retail Marketing Segmentation
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Retail Marketing Segmentation - N. Mohammed Nizar 03/30/09
Nizar
• A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods and services tat can satisfy these needs Marketer
Mass Marketing
03/30/09
Segmentation
Nizar
Market Segmentation • The process of dividing the heterogeneous Total market into small group of customers who share similar set of wants
Ex.
Women Working
Housewife
• Different groups have different promotional strategies and mkg mixes because they have diff. wants and needs 03/30/09
Nizar
Sub-segments Women Working
Housewife Children
No Children
• Segmentation helps the retailer to customize the product and tailor its promotional campaigns
03/30/09
Nizar
Stages in Segmentation
Segmentation
Targeting
Positioning
3. Choose variable for segmentation market 2. State a profile of Segment 3. Verify prospective segment
3. Decide on targeting 4. Identify which segments will be Targeted 3. How many segment should be targeted
3. Understanding the target segment 2. place offering in the mind of the target segment 3. Evolve mkting mix
03/30/09
Nizar
Benefits • • • • • •
Development of Marketing Mix Store location decisions Understand customer behavior Merchandising decision Promotional campaigns Positioning
03/30/09
Nizar
Criteria for effective segmentation • Homogeneous within • Heterogeneous between • Substantial - should be large enough • Actionable • Accessible • Measurable 03/30/09
Nizar
Dimensions for Segmentation • • • •
Geographic Demographic Psychographic Behavioral
03/30/09
Nizar
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Geographic Segmentation Region Southwest, Mountain States, Alaska, Hawaii City Size Major metropolitan areas, small cities, towns Density of area Urban, suburban, exurban, rural Climate Temperate, hot, humid, rainy Demographic Segmentation Age Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+ Sex Male, female Marital status Single, married, divorced, living together, widowed Income Under $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,000, $100,000 and over Education Some high school, high school graduate, some college, college graduate, postgraduate Occupation Professional, blue-collar, white-collar, agricultural, military
03/30/09
Nizar
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Psychological Segmentation Needs-motivation Shelter, safety, security, affection, sense of self-worth Personality Extroverts, novelty seeker, aggressives, low dogmatics Perception Low-risk, moderate-risk, high-risk Learning-involvement Low-involvement, high-involvement Attitudes Positive attitude, negative attitude Psychographic (Lifestyle) Segmentation Economy-minded, couch potatoes outdoors enthusiasts status seekers Sociocultural Segmentation Cultures American, Italian, Chinese, Mexican, French, Pakistani Religion Catholic, Protestant, Jewish, Moslem, other Subcultures (Race/ethnic) African-American, Caucasian, Asian, Hispanic Social class Lower, middle, upper Family life cycle Bachelors, young married, full nesters, empty nesters 03/30/09
Nizar
Values • Refers to belief system ex. Benetton targeted customers who value protection of environment, it encourages recyclable packaging and refill services
• Cultural values
03/30/09
Nizar
VALS • Begins with people instead of products • Classifies people by their unique style of living • It then determines how marketing factors fit into their lives - The self-driven materialists - the independent Explorer - The Passive traditionalist - The enthusiastic experiments - The mature Sensible 03/30/09
Nizar
Behavioral • • • • • • •
Reason/ occasion for purchase Frequency of purchase Quantity of purchase Product usage Loyalty status Buyers readiness stage Source of purchase
03/30/09
Nizar
Market Targeting • Choosing the segment • Measure the attractiveness and its capacity to serve in the segment Factors • Size of the segment • Purchasing power • Growth rate • Presence of competition • profitability 03/30/09
Nizar
Customer Profile Profiles help the retailer in understanding the needs of the target segments and its shopping behavior • • • • • • • •
Customer demographics Family decision making Psychographics Purchsing behavior Motivation for purchase Purchasing process Time utility Space utility
03/30/09
Nizar
Nizar
• A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods and services tat can satisfy these needs Marketer
Mass Marketing
03/30/09
Segmentation
Nizar
Market Segmentation • The process of dividing the heterogeneous Total market into small group of customers who share similar set of wants
Ex.
Women Working
Housewife
• Different groups have different promotional strategies and mkg mixes because they have diff. wants and needs 03/30/09
Nizar
Sub-segments Women Working
Housewife Children
No Children
• Segmentation helps the retailer to customize the product and tailor its promotional campaigns
03/30/09
Nizar
Stages in Segmentation
Segmentation
Targeting
Positioning
3. Choose variable for segmentation market 2. State a profile of Segment 3. Verify prospective segment
3. Decide on targeting 4. Identify which segments will be Targeted 3. How many segment should be targeted
3. Understanding the target segment 2. place offering in the mind of the target segment 3. Evolve mkting mix
03/30/09
Nizar
Benefits • • • • • •
Development of Marketing Mix Store location decisions Understand customer behavior Merchandising decision Promotional campaigns Positioning
03/30/09
Nizar
Criteria for effective segmentation • Homogeneous within • Heterogeneous between • Substantial - should be large enough • Actionable • Accessible • Measurable 03/30/09
Nizar
Dimensions for Segmentation • • • •
Geographic Demographic Psychographic Behavioral
03/30/09
Nizar
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Geographic Segmentation Region Southwest, Mountain States, Alaska, Hawaii City Size Major metropolitan areas, small cities, towns Density of area Urban, suburban, exurban, rural Climate Temperate, hot, humid, rainy Demographic Segmentation Age Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+ Sex Male, female Marital status Single, married, divorced, living together, widowed Income Under $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,000, $100,000 and over Education Some high school, high school graduate, some college, college graduate, postgraduate Occupation Professional, blue-collar, white-collar, agricultural, military
03/30/09
Nizar
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Psychological Segmentation Needs-motivation Shelter, safety, security, affection, sense of self-worth Personality Extroverts, novelty seeker, aggressives, low dogmatics Perception Low-risk, moderate-risk, high-risk Learning-involvement Low-involvement, high-involvement Attitudes Positive attitude, negative attitude Psychographic (Lifestyle) Segmentation Economy-minded, couch potatoes outdoors enthusiasts status seekers Sociocultural Segmentation Cultures American, Italian, Chinese, Mexican, French, Pakistani Religion Catholic, Protestant, Jewish, Moslem, other Subcultures (Race/ethnic) African-American, Caucasian, Asian, Hispanic Social class Lower, middle, upper Family life cycle Bachelors, young married, full nesters, empty nesters 03/30/09
Nizar
Values • Refers to belief system ex. Benetton targeted customers who value protection of environment, it encourages recyclable packaging and refill services
• Cultural values
03/30/09
Nizar
VALS • Begins with people instead of products • Classifies people by their unique style of living • It then determines how marketing factors fit into their lives - The self-driven materialists - the independent Explorer - The Passive traditionalist - The enthusiastic experiments - The mature Sensible 03/30/09
Nizar
Behavioral • • • • • • •
Reason/ occasion for purchase Frequency of purchase Quantity of purchase Product usage Loyalty status Buyers readiness stage Source of purchase
03/30/09
Nizar
Market Targeting • Choosing the segment • Measure the attractiveness and its capacity to serve in the segment Factors • Size of the segment • Purchasing power • Growth rate • Presence of competition • profitability 03/30/09
Nizar
Customer Profile Profiles help the retailer in understanding the needs of the target segments and its shopping behavior • • • • • • • •
Customer demographics Family decision making Psychographics Purchsing behavior Motivation for purchase Purchasing process Time utility Space utility
03/30/09
Nizar
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