itft- marketing

Market Segmentation

What is Segmentation ?

• process of bifurcating or dividing a large unit into various small units

• which have more or less similar or related characteristics.

Market Segmentation

• divides the complete market set up

into smaller subsets comprising of consumers with a similar taste, demand and preference.

• a small unit within a large market comprising of like minded individuals.

• One market segment is totally distinct from the other segment.

• comprises of individuals who think on the same lines and have similar interests.

• individuals from the same segment respond in a similar way to the fluctuations in the market.

Need of market segmentation:

• helps the marketers to devise appropriate marketing strategies and promotional schemes according to the tastes of the individuals of a particular market segment.

• helps the marketers to understand the needs of the target audience and adopt specific marketing plans accordingly.

• gives the customers a clear view of what to buy and what not to buy.

• helps the organizations to target the right product to the right customers at the right time.

• Segmentation helps the organizations to know and understand their customers better

Basis of Market Segmentation

• A) Gender

• B) Age Group

• C) Income

• D) Marital Status

• E) Occupation

Types of Market Segmentation

• 1) Psychographic segmentation

The individual’s attitude, interest, value help the marketers to classify them into small groups.

• 2) Behaviouralistic Segmentation

The loyalties of the customers towards a particular brand help the marketers to classify them into smaller groups

• 3) Geographic Segmentation

A marketer can’t have similar strategies for individuals living at different places.

Segmentation strategies

• Types of segmentation

• Demographic segmentation

• Psycho-demographic segmentation

• Two programmes used to segment consumers are the VALs 1 and VALs 2

• While the first programme just divided consumers based on their values and lifestyles, the second version is also based on relatively stable psychological characteristics

• VALs 2 system

This type of segmentation is advantageous because it:

• provides rich data concerning the psychological make-up of consumers.

• enables marketers to better understand the reasons behind consumers' purchases

• can be used to develop customer profiles that will guide promotional efforts and ultimately strengthen a brand.

• This segmentation strategy divides markets into consumer groups based on their uses, responses, knowledge and attitudes towards products and services.

• Occasions: Segmenting a market according to the occasions when consumers use a product or service can provide rich insight to expand market possibilities.

• Benefits sought: Grouping consumers based on the benefits they seek from a product or service