Retail market

segmentation
Made By:
Manas Gupta
Kanishk Surana
Nitesh Kundlia
Aman Sethi
Jagrat Agarwal
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Market Segmentation and Target

Marketing in Todays Economy
Market segmentation is the process by
which a market is divided into distinct
subsets of customers with similar needs
and characteristics.
Target marketing requires evaluating the
relative attractiveness of various
segments.

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Market Segmentation and Target

Marketing in Todays Economy
Brand positioning entails designing
product offerings and marketing programs
that can establish an enduring competitive
advantage in the target market by creating
a unique brand image, or position.
These three decision processes are
closely linked and have strong
interdependence.
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Market Segmentation and Target

Marketing in Todays Economy
Most markets are heterogeneous
Markets are complex entities that can be
defined in a variety of ways.
Critical issue: Finding an appropriate
segmentation scheme that will facilitate target
marketing, positioning, and the formulation of
successful marketing strategies and
programs.

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How are Market Segments Best

Defined?

Steps in market segmentation:

Identify a homogeneous segment that

differs from other segments.
Specify criteria that define the segment.
Determine segment size and potential.

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How are Market Segments Best

Defined?

Segmentation decisions are best made

based on:
Who the customers are,
Where they are, or
How they behave relevant to the market in
question.

The three approaches apply in both

consumer and organizational markets.
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How are Market Segments Best

Defined?

Segmenting demographically

Demographic attributes used to segment

consumer markets are age; sex; income;
occupation; education; race and ethnic
origin.
Industrial markets are segmented in two
stages:

Macrosegmentation
Microsegmentation

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How are Market Segments Best

Defined?

Segmenting geographically
Particularly important in retailing and many
services businesses.
One way to segment retail markets is by
distance or driving time from a particular
location.
The area included within such a
geographically defined region is called a
trade area.
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How are Market Segments Best

Defined?

Behavioral segmentation
Behavioral descriptors are based not on who
the target consumers are or where they live,
but based on what they do.
Behavioral attributes can take many forms.

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How are Market Segments Best

Defined?

Consumer needs:

Customer needs are expressed in benefits

sought from a particular product or service.
Consumers evaluate brand alternatives on the
basis of choice criteria.
In organizational markets, customers consider
relevant benefits that include product
performance in different use situations.

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Steps in Constructing a Market-Attractiveness/CompetitivePosition Matrix for Evaluating Potential Target Markets

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Choosing Attractive Market Segments:

A Five-Step Process

Step 1: Select market-attractiveness and

competitive-position factors
Market-attractiveness factors
Competitive-position factors

Step 2: Weight each factor

A numerical weight is assigned to each
factor to indicate its relative importance in
the overall assessment

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Choosing Attractive Market Segments:

A Five-Step Process

Step 3: Rate segments on each factor,

plot results on matrices
This step requires that evidence be collected
to objectively assess each of the criteria
identified in Step 1.
Once assessments have been made, the
weighted results can be plotted on a marketattractiveness/competitive-position matrix

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Choosing Attractive Market Segments:

A Five-Step Process

Step 4: Project future position for each

segment

Determine how the markets attractiveness

is likely to change over the next three to five
years.
For this assessment, start by considering:

Possible shifts in customer needs and behavior.

The entry or exit of competitors and changes in
their strategies.

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Choosing Attractive Market Segments:

A Five-Step Process

Step 5: Choose segments to target,

Allocate resources
Managers should consider a market
segment to be a desirable target only if it is
strongly positive on at least one of the two
dimensions of market attractiveness and
potential competitive position and at least
moderately positive on the other.

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