Levels of Market Segmentation

JohnV. Balanquit

Mass Marketing

• Mass production, mass distribution, and mass promotion to create largest potential market, thus reducing cost resulting to lower prices or higher profits.

Micromarketing

• Adopting strategies that will reach segments, niches, local areas or individuals

Segment Marketing

• Addressing to the needs of a group of customers who share similar needs and wants

Segment Marketing

• Flexible market offering– A process which contains

two parts, a naked solution containing the product and service element that all segment members value and a discretionary option that some segment members value

• Homogeneous preferences– All members roughly

have the same preference

Segment Marketing

• Diffused preferences– Members have varied

preferences

• Clustered preferences– Natural market

segments emerge from groups of customers with shared preferences

Niche Marketing

• Addressing to needs of a narrowly defined customer group seeking distinctive mix of benefits. This is done by dividing segments into subsegments

Local Marketing

• Preparing marketing programs tailored to the needs and wants of local customer groups in trading areas, neighborhoods, or individual stores

Individual Marketing

• Also termed “segments of one”, “customized marketing”, or “one-to-one marketing”

Individual Marketing

• Customerization– Empowering customers to design the product and

service offering of their choice

Bases for Segmenting Customer Markets

• Geographical Segmentation– Dividing the market into different geographical

units such as nations, regions, countries, cities, or neighborhoods

• Demographic Segmentation– Dividing the market into groups based on variables

such as age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality, and social class

Bases for Segmenting Customer Markets

• Psychographic Segmentation–Dividing the market into different groups on

the basis of personality traits, lifestyle, or values. This method uses data from demographics and psychology–VALS• This system classifies people into 8 groups:

innovators, thinkers, achievers, experiencers, believers, strivers, makers, survivors

Bases for Segmenting Customer Markets

• Behavioral Segmentation–Buyers are groups according to their

knowledge of, attitude towards, use of, or response to a product. This method is affected by two factors, the decision role and the behavioral variables

• Decision roles- initiator, influencer, decider, buyer, user.

• Behavioral Variables- occasions, benefits, user status, usage rate, buyer-readiness stage, loyalty status, and attitude

• The Conversion Model– It measures the strength of consumers’

psychological commitment to brands and their opened to change. Users are grouped as convertible, shallow, average and entrenched. Non-users are grouped as strongly unavailable, weakly unavailable, ambivalent, and available.

Bases of Segmenting Business Markets

• Demographic– Industry– Company size– Location

• Operating Variables– Technology– User or Non-user status– Customer capabilities

Bases of Segmenting Business Markets

• Purchasing Approaches– Purchasing- function organization– Power structure– Nature of existing relationship– General purchasing policies– Purchasing criteria

Bases of Segmenting Business Markets

• Situational Factors– Urgency– Specific application– Size or order

• Personal Characteristics– Buyer-seller similarity– Attitude toward risk– Loyalty

Market Targeting

• This process is the selection of a particular market after identifying segment opportunities.

Steps in Needs-based Market Segmentation Approach by Roger Best

Market Targeting

• Effective Segmentation Criteria– Measurable– Substantial– Accessible– Differentiable– Actionable

Market Targeting

• Evaluating and Selecting the Market Segment

Market Targeting

Market Targeting

Additional Consideration

• Segment by Segment Invasion Plan

Additional Consideration

• Megamarketing–The strategic coordination of

economic, psychological, political, and public relations skills, to gain the cooperation of a number of parties in order to enter or operate in a given market.

Additional Consideration

• Ethical Choice of Market Targets