market segmentation with examples

MARKET

SEGMENTATION

A Market is a place which allows the purchaser and the seller to invent and gather information’s and lets them carry out exchange of various products and services. In other words the Meaning of Market refers to a place where the trading of goods takes place. The place can be a market place or a street market. A market is thus by definition comprises people or business with potential interest, purchasing power and willingness to spend the money to buy a product or service that satisfies need.

What is Market?

MEANING OF SEGMENTATION:

• The process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.

• It is a process in which companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently & effectively with products & services that match their unique needs.

WHY SEGMENT THE MARKET?

• Facilitates Right Choice of Target Market.• Facilitates Effective Tapping of the Chosen Market.• Makes the Marketing Effort More Efficient and Economic.• Helps Identify Less Satisfied Segments and

Concentrate on Them.

BENEFITS OF SEGMENTATION

•Increases Sales.•Satisfy customer needs more successfully.•Customer feedback more easily obtained.•Reduced costs as money is not wasted on ineffective advertising & promotion.

Market can be segmented using several basesA market/ consumer population for a product can be segmented using several relevant bases. The major ones include:

1.Geographic2.Demographic3.Behavioral4.Psychographic

• Geographic - Region, City, Rural and Semi-Rural areas

• Demographic - Age, Gender, Income, Occupation, Education, Family size

• Psychographic - Social class, Lifestyle, Personality

• Behavioural or Buying Behaviour - Occasions, Benefits, User status, Loyalty status, Readiness stage, Attitude towards product

• Geographic - RegionSouth India, Western Region, North, East -CityCities, Metro Cities, Cities with a population of 0.5 million to 1 million, Cities with a population of over 1 million. - Rural & semi-urban areasRural villages with a population over 10,000; Semi-urban areas; small town with a population between 20,000 & 50,000

• Demographic -AgeKids, Teenagers, Youth, Working age group, senior Citizens. -GenderMale, Female -IncomeLow (up to 40,000 p.a.), lower middle (40,001 -80,000p.a.), Middle (80,001-12,000 p.a.),Upper middle (12,001 -1,60,000p.a.), High (above 1,60,000 p.a.) -OccupationUnskilled worker, Skilled worker, Petty traders, Shop owners, Businessman/Industrialist, Self employed(Professionals, Supervisory level, Sales executive) -EducationIlliterate, School up to 4 years, School between 5 – 9, SSC/HSC, Graduate/Postgraduate.

•Psychographic

-Socioeconomic classification (SEC)A1, A2, B1, B2, C, D, E1,E2. (Purchase potential)

-LifestyleCulture Oriented, Sports Oriented, Outdoor oriented.

-PersonalityCompulsive, Gregarious, Ambitious

•Behavioural or Buying Behaviour

OccasionsRegular, Special

BenefitsQuality, Service, Economy, Speed

User statusNonuser, Ex-user, Potential user, First time user, Regular user

Loyalty statusNone, Medium, Strong, Absolute

Readiness stageUnaware, Aware, Informed, Interested, Desirous, Intending to buy

Attitude towards productEnthusiastic, Positive, Indifferent, Negative, Hostile

Niche Marketing

Meaning

A Niche is more narrowly defined customer group seeking a distinctive mix of benefits. Marketers usually identify niches by dividing a segment into sub segments.