Identifying Market

Segments and Targets

Market Segmentation

 Is a marketing strategy which involves dividing a

broad target market into subsets of consumers,
businesses, or countries that have, or are
perceived to have, common needs, interest and
priorities, and then designing and implementing
strategies to target them.
 Levels of Market Segmentation

 Mass Marketing  Seller offers same product

for all the buyers.
 Segment Marketing  Seller engages in mass
production, mass
 Niche Marketing distribution and mass
 Local Marketing promotion of one product
for all buyers
 Individual Marketing
 Levels of Market Segmentation

 Mass Marketing  A marketer divides a

total market into
 Segment Marketing several segment based
 Niche Marketing on consumers’ buying
behavior, purchasing
 Local Marketing power, demographic
 Individual Marketing factors, etc.
 Levels of Market Segmentation

 Mass Marketing  Competing within a

narrowly defined
 Segment Marketing market segment with a
 Niche Marketing specialized offering.
 Has a distinct set of
 Local Marketing needs, willing to pay a
 Individual Marketing premium, is fairly
small, gains economies
through specialization.
 Levels of Market Segmentation

 Mass Marketing  The focus is on local

market. The market
 Segment Marketing program is designed as
 Niche Marketing per the need of local
consumer group, cities,
 Local Marketing neighborhood.
 Individual Marketing
 Levels of Market Segmentation

 Mass Marketing  Focuses on satisfying

the needs and wants of
 Segment Marketing individual prospective
 Niche Marketing consumer.
 Also known as one-to-
 Local Marketing one marketing.
 Individual Marketing
Bases for Segmenting Consumer Markets

Major Segmentation Variables for Consumer Markets

 Geographic region  Occupation  Personality
 City or metro size  Education  Behavioral occasions
 Density  Religion  Benefits
 Climate  Race  User status
 Demographic age  Generation  Usage rate
 Family size  Nationality  Loyalty status
 Family life cycle  Social Class  Readiness stage
 Gender  Psychographic  Attitude toward
 Income lifestyle product
Bases for Segmenting Consumer Markets

 GEOGRAPHIC  Geographic region

 City or metro size
 DEMOGRAPHIC  Density
 Climate
 PSYCHOGRAPHIC
 BEHAVIORAL
Bases for Segmenting Consumer Markets

 GEOGRAPHIC  Age, Gender, Race

 Family size
 DEMOGRAPHIC  Family life cycle
 Income, Occupation
 PSYCHOGRAPHIC  Education
 Religion, Nationality
 BEHAVIORAL
 Generation
 Social Class
Bases for Segmenting Consumer Markets

 GEOGRAPHIC  Lifestyle
 Personality
 DEMOGRAPHIC
 PSYCHOGRAPHIC
 BEHAVIORAL
Bases for Segmenting Consumer Markets

 GEOGRAPHIC  Occasions
 Benefits
 DEMOGRAPHIC  User status
 Usage rate
 PSYCHOGRAPHIC  Loyalty status
 Readiness stage
 BEHAVIORAL
 Attitude toward
product
Segmenting Consumer Markets

 PRIZM (Potential Rating Index by Zip Markets)

 Geoclustering approach developed by Nielsen
Claritas.
 Combines multiple variables to identify a better
defined target groups.
Segmenting Consumer Markets

 The VALS Segmentation System

 VALS means Values and Lifestyles.
 A classification system based on psychographic
measurements
 4 groups with high resources

1. Innovators- Successful, sophisticated,

active, “take-charge” people with
high self-esteem. Purchases often
reflect cultivated tastes for relatively
upscale, niche-oriented products and
services.
2. Thinkers- Mature, satisfied, and
reflective people motivated by
ideals and who value order,
knowledge, and responsibility. They
seek durability, functionality, and
value in products.
 4 groups with high resources

3. Achievers - Successful, goal-oriented

people who focus on career and
family. They favor premium products
that demonstrate success to their
peers.

4. Experiencers - Young, enthusiastic,

impulsive people who seek variety
and excitement. They spend a
comparatively high proportion of
income on fashion, entertainment,
and socializing.
 4 groups with lower resources

1. Believers - Conservative,
conventional, and traditional people
with concrete beliefs. They prefer
familiar, U.S.-made products and are
loyal to established brands.

2. Strivers - Trendy and fun-loving

people who are resource-
constrained. They favor stylish
products that emulate the purchases
of those with greater material
wealth.
 4 groups with lower resources

3. Makers - Practical, down-to-earth,

self-sufficient people who like to
work with their hands. They seek
U.S.-made products with a practical
or functional purpose.

4. Survivors - Elderly, passive people

concerned about change and loyal to
their favorite brands.
THANK YOU