SEGMENTATION

Chapter Questions
What are the different levels of market segmentation? How can a company divide a market into segments? How should a company choose the most attractive target markets? What are the requirements for effective segmentation?
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Mass Marketing
One product for all buyers. Seller engages mass production, mass distribution & mass promotion. Lowest cost. Eg.

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Fords Model T Followed a Mass Market Approach

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What is a Market Segment?

A market segment consists of a group of customers who share a similar set of needs ad wants.

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Niche Marketing
Narrowly defined group of consumers. They seek distinct mix of benefits Dividing a segment may lead to a niche.

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Niche Marketing
Customers have distinct needs. They will pay a premium for it. Niche is fairly small but has size, profit, & growth. It is unlikely to attract many competitors. Eg.

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The Revolution brand of readymade womens apparel successfully focuses on the niche segment of plus-size clothes.
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Segmenting Consumer Markets

Geographic Demographic Psychographic Behavioral
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Geographical Segmentation
Rural and Urban
Literacy levels, spending power & infrastructure.

Region ( North, South, East, West)

Local Marketing ( food, clothing etc).

City Size
Metros (3D TVs) Mini-metros.
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Demographic Segmentation
Age and Life Cycle
Life Stage Gender Income Generation Social Class
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Dove Targets Women

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Psychographic Segmentation
Psychology and demographics Bases are psychological/personality traits, lifestyle or values. People within same demographics can exhibit very different psychographic profiles.

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Figure 8.1 The VALS Segmentation System

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Behavioral Segmentation
Decision Roles Initiator Influencer Decider Buyer User Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude

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Effective Segmentation Criteria

Measurable Substantial

Accessible
Differentiable Actionable
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