Marketing Management

1. Ayu Amrina Rosada C1L010011 2. Bima C. Pratama C1L010045 3. Fania Anisa Hapsari C1L010049

International Accounting 2010

Segmentation is essentially the identification of subsets of buyers within a market that share similar needs and demonstrate similar buyer behavior. A market segment is a classification of potential private or corporate customers by one or more characteristics, in order to identify groups of customers, which have similar needs and demand similar products and/or services concerning the recognized qualities of these products, e.g. functionality, price, design, etc.

An ideal market segment meets all of the following criteria: It is internally homogeneous (potential customers in the same segment prefer the same product qualities). It is externally heterogeneous (potential customers from different segments have basically different quality preferences). It responds similarly to a market stimulus. It can be cost-efficiently reached by market intervention.

A customer is allocated to one market segment by the customers individual characteristics. Often cluster analysis and other statistical methods are used to figure out those characteristics, which lead to internally homogeneous and externally heterogeneous market segments.
Examples of characteristics used for segmentation: ~Gender ~Religion ~Price ~Income ~Interests ~Size of Household ~Location

Mass Marketing

All customers are treated the same

Customer needs are not met Cheaper to implement

One-to-one Marketing

Each customer serves as own segment

More expensive to implement Customer needs are better met

Marketing Segmentation

Customers are broken into more homogeneous groups

Groups are small enough that customer needs are met Very possibly to profitable because large

Niche marketing

A niche is a more narrowly defined customer group who seek a distinct set of benefits. dentified by dividing a segment into subsegments, distinct and unique set of needs, requires speciallization, and is not likely to attract too many competitors.

Marketers segment markets by identifying variables(s) that help them determine whether or not customers will like their product Segmentation bases

Factors that are utilized to group customers

Geographic segmentation
The market is segmented according to geographic criteria- nations, states, regions, counties, cities, neighborhoods, or zip codes. Geo-cluster approach combines demographic data with geographic data to create a more accurate profile of specific.

Demographic Segmentation
Segmentation by Age, gender, Income, social class, etc.

Psychographic Segmentation
Psychographics is the science of using psychology and demographics to better understand consumers. Psychographic segmentation: consumer are divided according to their lifestyle, personality, values. People within the same demographic group can exhibit very different psychographic profiles.

Behavioral Segmentation
In behavioral segmentation, consumers are divided into groups according to their knowledge of, attitude towards, use of or response to a product.

Occasions
segmentation according to occasions.we segment the market according to the occasions.

Benefits
segmentations according to benefits sought by the consumer.

Users status
nonusers, ex-users, first time users, etc.

A decision to use a market segmentation strategy should rest on consideration of four important criteria that affect its profitability. In order for segmentation to be viable the market must be: (1) Identifiable and measurable (2) Accessible (3) Substantial (4) Responsive.

Segments must be identifiable so that the marketer can determine which consumers belong to a segment and which do not. However, there may be a problem with the segments measurability (that is, the amount of information available on specific buyer characteristics) because numerous variables (e.g. psychological factors) are difficult, if not impossible, to measure at the present time. For example, if the marketer discovered that consumers who perspire profusely favored a particular brand, very little could be done with this information since such a group would be difficult to measure and identify for segmentation purposes.

This criterion refers to the ease of effectively and economically reaching chosen segments with marketing efforts. Some desired segments may be inaccessible because of legal reasons; for example, liquor manufacturers are unable to market directly to young teenagers, In fact, there is a vigorous debate dealing with the constitutionality of segmenting and targeting certain groups. Cigarette companies that aimed recent new brands at 18 24 year old black women with a high school education or less have been criticized, and legislation to protect these targeted groups from such advertising has been proposed. The Association of National Advertisers defends the practice and claims such proposals amount to censorship and a violation of First Amendment rights.

This collection refers to the degree to which a chosen segment is large enough to support profitably a separate marketing program. As was noted preciously a strategy of market segmentation is costly. Thus, one must carefully consider not only the number of customers available in a segment but also the amount of their purchasing power.

There is little to justify the development of a separate and unique marketing program for a target segment unless it responds uniquely to these efforts. Therefore, the problem is to identify market segments that will respond favorably to marketing programs designed specifically for them.