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Retail Marketing Segmentation

- N. Mohammed Nizar

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• A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods and services tat can satisfy these needs

Mass Marketing Segmentation

Marketer

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Market Segmentation

• The process of dividing the heterogeneousTotal market into small group of customers who share similar set of wants

Ex. Women

Working Housewife

• Different groups have different promotional strategies and mkg mixes because they have diff. wants and needs

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Sub-segments

Women

Working Housewife

Children No Children

• Segmentation helps the retailer to customize the product and tailor its promotional campaigns

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Stages in Segmentation

Targeting

1. Decide on targeting2. Identify whichsegments will be Targeted3. How many segment should be targeted

Positioning

1. Understanding the target segment2. place offering in the mind of the target segment3. Evolve mkting mix

Segmentation

1. Choose variable for segmentation market2. State a profile of Segment3. Verify prospective segment

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Benefits

• Development of Marketing Mix

• Store location decisions

• Understand customer behavior

• Merchandising decision

• Promotional campaigns

• Positioning

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Criteria for effective segmentation

• Homogeneous within

• Heterogeneous between

• Substantial

- should be large enough

• Actionable

• Accessible

• Measurable

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Dimensions for Segmentation

• Geographic

• Demographic

• Psychographic

• Behavioral

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SEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESGeographic Segmentation

Climate

Density of area

City Size

Region Southwest, Mountain States, Alaska, Hawaii

Major metropolitan areas, small cities, towns

Urban, suburban, exurban, rural

Temperate, hot, humid, rainy

Demographic Segmentation

Income

Marital statusSexAge Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+

Male, femaleSingle, married, divorced, living together, widowed

Under $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,000, $100,000 and over

Occupation

Education Some high school, high school graduate, some college, college graduate, postgraduate

Professional, blue-collar, white-collar, agricultural, military

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SEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESPsychological Segmentation

Learning-involvement

Perception

Personality

Needs-motivation Shelter, safety, security, affection, sense of self-worth

Extroverts, novelty seeker, aggressives, low dogmatics

Low-risk, moderate-risk, high-risk

Low-involvement, high-involvement

Psychographic

Subcultures (Race/ethnic)

Religion

Cultures

(Lifestyle) Segmentation Economy-minded, couch potatoes outdoors enthusiasts status seekers

American, Italian, Chinese, Mexican, French, Pakistani

Catholic, Protestant, Jewish, Moslem, other

African-American, Caucasian, Asian, Hispanic

Family life cycle

Social class Lower, middle, upper

Bachelors, young married, full nesters, empty nesters

Attitudes Positive attitude, negative attitude

Sociocultural Segmentation

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Values

• Refers to belief systemex. Benetton targeted customers who value protection of

environment, it encourages recyclable packaging and refill services

• Cultural values

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VALS• Begins with people instead of products

• Classifies people by their unique style of living

• It then determines how marketing factors fit into their lives- The self-driven materialists

- the independent Explorer

- The Passive traditionalist

- The enthusiastic experiments

- The mature Sensible

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Behavioral

• Reason/ occasion for purchase

• Frequency of purchase

• Quantity of purchase

• Product usage

• Loyalty status

• Buyers readiness stage

• Source of purchase

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Market Targeting• Choosing the segment• Measure the attractiveness and its capacity to

serve in the segment

Factors• Size of the segment• Purchasing power• Growth rate• Presence of competition• profitability

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Customer ProfileProfiles help the retailer in understanding the needs of the target segments and its shopping behavior

• Customer demographics• Family decision making • Psychographics• Purchsing behavior• Motivation for purchase• Purchasing process• Time utility• Space utility