Market Segmentation

Chapter 2
Market
segmentation
Schiffman, Bednall, O’Cass, Paladino, Ward & Kanuk:
Consumer Behaviour 4e © 2007 Pearson Education Australia

Chapter Objectives
To define market segmentation
To review the uses of segmentation
To outline the nine main bases of segmentation
To understand the main segmentation approaches
To outline the criteria for effective market segments To distinguish between concentrated and differentiated marketing
Schiffman, Bednall, O’Cass, Paladino, Ward & Kanuk: Consumer Behaviour 4e © 2007 Pearson Education Australia
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What is market segmentation?
Market Segmentation is defined as:
“The process of dividing a market into distinct subsets of consumers with common needs and selecting one or more segments to target with a distinct marketing strategy”
Schiffman, Bednall, O’Cass, Paladino, Ward & Kanuk: Consumer Behaviour 4e © 2007 Pearson Education Australia
3

Progression of market segmentation
Schiffman, Bednall, O’Cass, Paladino, Ward & Kanuk: Consumer Behaviour 4e © 2007 Pearson Education Australia
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Who uses segmentation?
Cars
David Jones
Charities
Equipment
Shoes
Big W
Theatre
Machinery
Shampoo
Kmart
Sports
Tools
Watches
Target
Schiffman, Bednall, O’Cass, Paladino, Ward & Kanuk: Consumer Behaviour 4e © 2007 Pearson Education Australia
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Uses of segmentation
Schiffman, Bednall, O’Cass, Paladino, Ward & Kanuk: Consumer Behaviour 4e © 2007 Pearson Education Australia
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Nine main bases for segmentation Schiffman, Bednall, O’Cass, Paladino, Ward & Kanuk: Consumer Behaviour 4e © 2007 Pearson Education Australia
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Geographic segmentation
Where the market is divided by location
Assumes that people who live in the same area share some similar needs and wants
Geographic markets can be easily reached by local media
Some firms use geographic segmentation to adopt a ‘localised’ strategy, however