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By Ms. Sidrah Farooq
Market Segmentation is the process of dividing the total heterogeneous market into relatively distinct homogenous sub-groups of consumers with common needs or characteristics & selecting one or more segments to target with distinct marketing program A Market Segment is a portion of a large market in which the individuals, groups or organizations share one or more characteristic which cause them to use relatively same products
Why do Market Segmentation? Segmentation studies are used to uncover needs & wants of specific groups for whom the marketer develops specially suitable products & services to satisfy their needs. This helps identify the right Marketing Mix, what product to offer, which media is best to promote, where will the target group seek the product etc.
Significance of Market Segmentation
According to Michael Porter “ The competitive advantage of a firm lies in being everything to a select few. To be everything to everyone is a sure recipe for a strategic failure”
Bases for Segmentation
Geographic units may be the nations, states, regions, areas of certain climatic conditions, urban, rural divides. This assumes that people in the same geographic area will have same preferences & consumption pattern. For example: In West Bengal people have preference for seafood habit.
Geographic Segmentation Example:
Different clothing preferences in different geographic reasons, such as western country boutiques are more likely to have jackets and uppers whereas in Pakistan we mostly have lawn or thing cotton dresses.
It includes factors such as age, gender, education, income, marital status, family size & social class etc. Products such as Men’s cosmetics are based on the demographic variable of gender, men.
Car manufacturers produce a varied line of automobiles according to the income group of potential buyers
An engineer & a clerk belong to different social class hence they will opt for different clothing stores
When segmentation is based on lifestyle or personality characteristics, it is called Psychographic Segmentation.
Consumers have different self-image and this describes their personality. People are ambitious, talkative, cautious, introverts, egotists, conservative, confident, aggressive, modern.
Marketers learn about consumer personality traits and offer products catering the relevant psychological needs or they study which consumers want to adopt a characteristics. For example: motorcycle manufacturers often cater the psychographics of a “Macho Man”.
It’s an indicator of how people live and spend their time & money. What people do in their free time is often a good indicator of their lifestyle. This analysis provides a broad view of consumers because it segments the markets on the basis of their ;
Activities (how they spend their time)
Interests ( the importance of things in their surroundings)
Opinions (their beliefs on broad issues & themselves)
Lifestyles of dual career couples and working women demand convenience & time saving. Frozen ready to eat/cook products are designed consumers having such lifestyle.
Contrary to this housewives are more price-sensitive and prefer cooking meals at home.
A highly practical and knowledge seeking individual will prefer joining some professional associations and buying passes for seminars & networking conferences.
The VALS (Values & Lifestyles):
VALS has two dimensions;
Self Orientation: It determines the type of goals & behaviors that individuals will pursue & refers to pattern of attitudes & activities which help individual, sustain or modify their self-image.
Resources: It determines the ability of individual to pursue their dominant self-orientation that includes self-confidence, interpersonal skills, inventiveness, intelligence, eagerness to buy, money, positions, social status, education etc.
There are three basic kinds of self-orientations; Principle oriented individuals are guided in their choices by their beliefs and principles & not by feelings, desires & events. Status-oriented individuals are heavily influenced by actions, approval & opinion of others Action-Oriented individuals desire physical & social activity & risk taking.
It divides the market on the basis of such variables as use occasion, benefits sought, user status, usage rate, loyalty status, buyer readiness stage & attitude.
Marketers often divide consumers as light, medium & heavy users of a product
It divides the market on the basis of consumers who are looking for specific benefits. For example an automobile buyer may seek fuel efficiency or social status or driving safety.
Positioning: is making a market offering to the minds of the target buyers as delivering some central benefits. Products Positioning is an attempt to achieve a defined brand image relative to competition within a market segment.
Significance: Each Brand is noticed only when it occupies a distinct position in the mind of an individual.
Automotive Positioning examples
Volvo is positioned to be the safest car
Lexus is positioned to be the best Luxury car
BMW is an ultimate driving machine
Toyota is a reliable car
Porche is a Sports car
Mercedez is a car with Prestige
Core Concepts Marketing
Let’s explore the Packaged Milk Category with the positioning of each Brand. All brand in the category offer the same product but position it differently in the mind of target audience.
Now, after all above examples being discussed, can you tell what’s the positioning of CloseUp after watching this TVC?
he income group of potential buyers
Resources: It determines the ability of individual to pursue th