Segmentation:

The STP Process:

•Market segmentation: Creating clusters in the
market of buyers with similar needs and preferences.
•Market targeting: Selecting one or more market
segments to enter.
•Market positioning: Establishing and
communicating the key distinctive benefit(s) of the
company’s market offering to each target.
 Segmentation and its
levels:

 Mass marketing is loosing its

popularity.
 Micromarketing can be undertaken
at four levels:
 Segment marketing
 Niche marketing
 Local marketing
 Individual marketing-
Mass customization
 Preferences:
 Three patterns of preference segments are typically
identified:
 Homogeneous preferences- max people prefer one
thing only
 Diffused preferences- no specific choice
 Clustered preferences- each choice is preferred by
equal no. of people.

Market-Segmentation Procedure:
•Survey
•Analysis
•Profiling
 Segmenting Consumer
Markets:
 Geographical segmentation:
 Region, Country, City, Density, Climate,
etc.
 Demographic segmentation:
 Age, Gender, Income, Family size, etc.
 Psychographic segmentation:
 Lifestyle, Personality, Values.
 Behavioral segmentation
 Behavioral
Segmentation
Variables
 Occasions-mothers
day
 Benefits
 User Status

 Usage Rates
 Loyalty Status –
 Hardcore Loyals, Split loyals, Shifting Loyals, Switchers.
 Readiness Stage- farmers

 Attitude Toward the Product- enthusiastic, positive,

indifferent, negative & hostile.
Segmenting Business Markets

Demographic segmentation
Industry, company size,
location variables
Operating
Technology, customer
capabilities
Purchasing approaches
Structure, Negotiation, Relationship
Policies.
Segmenting Business Markets

Situational factors
Urgency, specific application,
size of order
Personal characteristics
Buyer-seller similarity, attitudes
toward risk, loyalty
 Requirements for
Effective Segmentation

Measurable
 Size, purchasing power, and
profile of segment

Accessible
Can be reached and served
 Requirements for
Effective Segmentation
Substantial
Large and profitable enough to
serve
Differentiable
Respond


differently
Actionable
Effective programs can be developed
Evaluating Market Segments
 Segment size and growth
 Segment structural

attractiveness
 Level of competition
 Substitute products
 Power of buyers
 Powerful suppliers
 Company objectives and
resources
Single-Segment Concentration:

Product
Category

Market Segment
Selective Specialization:

Product
Category

Market Segment
Product Specialization:

Product
Category

Market Segment
Market Specialization:

Product
Category

Market Segment
Full Market Coverage:

Product
Category

Market Segment