Market segmentaion
Market segmentation, targeting and positioning
MARKET SEGMENTATION
Definition:
This is the process of dividing the total market for a good or service into several smaller, internally similar (or homogeneous) groups. All members in a group have similar factors that influence their demand for the particular product.
4-2
BASES FOR SEGMENTATION
Geographic — The city size, urban/ suburban/ rural population distribution and climate.
Demographic — The distribution of a population s age, sex, income, stage in family cycle and ethnic background.
Psychographic — Personalities, lifestyles, social class including activities, interests and opinions (AIO).
Behaviour towards products.
Benefits desired or sought.
Product usage rate.
4-3
BENEFITS OF SEGMENTATION
Segmentation enables marketers to:
Identify and satisfy specific benefits sought by particular groups.
Divide the market into segments by separating marketing programs.
Select target market.
Action the market segmentation plan.
4-4
LIMITATIONS OF SEGMENTATION
Segmentation limits:
Mass production, which offers economies of scale.
Standardisation of service, which increases delivery speed and efficiency.
Segmentation increases:
Expense through production and marketing of products to only specific groups of the market. Promotion, administrative and inventory costs. 4-5
MARKET SEGMENTATION PROCESS
The process involves:
Identifying the needs and wants of customers.
Identifying the different characteristics between market segments.
Estimating the market potential.
4-6
IDENTIFY THE NEEDS AND WANTS
OF CUSTOMERS
The objective is to identify needs not currently satisfied. For example:
• Airlines might consider offering business travel although research shows that preferred departure and arrival times vary from those being offered.
4-7
IDENTIFY DIFFERENT MARKET
SEGMENTS
MARKET SEGMENTATION
Definition:
This is the process of dividing the total market for a good or service into several smaller, internally similar (or homogeneous) groups. All members in a group have similar factors that influence their demand for the particular product.
4-2
BASES FOR SEGMENTATION
Geographic — The city size, urban/ suburban/ rural population distribution and climate.
Demographic — The distribution of a population s age, sex, income, stage in family cycle and ethnic background.
Psychographic — Personalities, lifestyles, social class including activities, interests and opinions (AIO).
Behaviour towards products.
Benefits desired or sought.
Product usage rate.
4-3
BENEFITS OF SEGMENTATION
Segmentation enables marketers to:
Identify and satisfy specific benefits sought by particular groups.
Divide the market into segments by separating marketing programs.
Select target market.
Action the market segmentation plan.
4-4
LIMITATIONS OF SEGMENTATION
Segmentation limits:
Mass production, which offers economies of scale.
Standardisation of service, which increases delivery speed and efficiency.
Segmentation increases:
Expense through production and marketing of products to only specific groups of the market. Promotion, administrative and inventory costs. 4-5
MARKET SEGMENTATION PROCESS
The process involves:
Identifying the needs and wants of customers.
Identifying the different characteristics between market segments.
Estimating the market potential.
4-6
IDENTIFY THE NEEDS AND WANTS
OF CUSTOMERS
The objective is to identify needs not currently satisfied. For example:
• Airlines might consider offering business travel although research shows that preferred departure and arrival times vary from those being offered.
4-7
IDENTIFY DIFFERENT MARKET
SEGMENTS