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MARKETING

SEGMENTATION
• A market is a group of people or
organizations with wants and needs that can
be satisfied by particular product
categories. A market has the ability to
purchase these products and is willing to
exchange resources for the products.


A market segment is a subgroup of people
or organizations sharing one or more
characteristics that cause them to have
similar product needs.
 
MARKET
SEGMENTATION
• Dividing a market into
distinct groups of buyers
on the basis of need,
characteristics,
or behavior who
might require separate
product or marketing mix.
MASS MARKETING(until
the 1960s)
• mass marketing is the mass production
mass distribution and mass promotion of
the mass product to all customers.
• Thirty years ago marketers were raving
about mass marketing. The rationale
behind mass marketing included the
economies of scale you achieve in both
manufacturing and communication by
reaching a large group of people with the
same product and message
Mass market

Product

Price Distribution

Promotion

Single All Customers


Marketing Mix in the Market
– Companies that adopt mass marketing
assume that all customers in the
product market have similar needs,
and that these needs can be
reasonably satisfied with a single
marketing mix.
– This marketing mix typically consists
of a single product (or, in the case of
retailers, a homogeneous set of
products), one price, one promotional
program, and one distribution system.
Level of marketing
segmentation
• Segment marketing:isolating broad
segment that make up a market and
adapting the market to match the needs of
one or more segments.
• It offer several benefits over mass
marketing.
• Company can create more fine product and
price it appropriately the target audience.
• Choice of distribution and communication
channels.
Segment marketing

Product

Price Distribution

Promotion

Product

Price Distribution

Promotion

Multiple More Than One


Marketing Market Segment
Mixes
NICHE MARKETING
• narrows the market concentration approach even
more and focuses all marketing efforts on one
small, well-defined market segment that has a
unique, specific set of needs
• More narrowly defined group, typically a small
market whose needs are not being well served.
• Niche customers have a distinct and complete set
of needs.
• They will pay a price premium to have their special
needs met.
• The niche is not likely to attract very many
competitors.
• Should have sufficient size, profit, and growth
potential.
Niche Marketing

Product

Price Distribution

Promotion

Focused on a Small
Single
Niche Market Segment
Marketing Mix
• LOCAL MARKETING
• tailoring brand and promotion to the needs and
wants of local customer group—cities,
neighborhood and even specific stores.
• Pronounced regional differences often exist in
communities’ demographics and lifestyles.
• Local marketing can drive up manufacturing &
marketing costs by reducing economies of scale.
• INDIVIDUAL MARKETING:
• Tailoring products and marketing programs to the
needs and preferences of individual customers –
also labeled one- to-one marketing, customized
marketing, and markets-of-one marketing.
• The ultimate level of segmentation. Each
customer is a “segment of one.”
– This approach is common in business-to-business
marketing where unique programs and/or
systems are designed for each and every
customer.
• Such "one-on-one" marketing is more rare in
consumer marketing.
Customized or individual Marketing

Product

Price Distribution

Promotion

Product

Price Distribution

Promotion

Unique Individual
Marketing Customers
Mixes
SELF MARKETING

Form of individual marketing.


Customer takes more responsibility in
determining which products/brands
to buy
Much less reliance upon salespeople
PATTERNS OF MARKETING
SEGMENTATION

• PREFERENCE SEGMENTS:
• Segment the market on preferences
basis.
• Three different patterns emerges.
• HOMOGENEOUS PREFERENCES:
• Market where all consumer have
roughly the same preference.
• DIFFUSED PREFERENCES:
• Consumer preferences
may be scattered through
out the space.if several
brands are in the market
they are likely to position
throughout the space and
show real differences to match consumer
preference difference.
• CLUSTERED PREFERENCES:
• Natural market.
• It has three option.
• Take position in center, hoping to appeal all
group.
• Concentrated marketing.
• Develop several brands each position in a
different segment.
Segmenting consumer market
• Two broad groups of variable are used to
segment consumer market.
• Consumer characteristics
• Geographic
• Demographic
• Psycho graphic

• Consumer response:
• Benefits sought
• Use occasions or brand
GEOGRAPGIC SEGMENTATION


GEOGRAPGIC SEGMENTATION

• Dividing a market into different


Geographic units. Such as
nations, states, region ,countries
, cities or neighborhoods.
• Geographic. Geographic segmentation
usually involves dividing up geographic
markets by using existing political
boundaries, natural climatic zones, or
population boundaries.
Demographic Segmentation
Demographic Segmentation
• Demographic market segments are created
by dividing a market into groups based on
differences in demographic traits such as
• age, occupation
• gender, education
• family size, religion
• family life cycle, race
• income nationality
Age and life –cycle
segmentation
Age and life –cycle
segmentation
• Dividing a market into different ages and
life- cycle groups.
• Markets can be
• segmented based
• on age differences.
Consumer wants
and ability change with age.
• family life cycle is a 'composite
demographic' trait. When segmenting based
on stage of the family life cycle, firms
specifically recognize that individuals
progress through a series of life cycle
stages.  The life cycle begins with
individuals who are young and single.  It
ends with people who are older and
unmarried as a result of the death of a
spouse. Each of the stages in the family life
cycle essentially amounts to a market
segment possessing different wants and
needs.  Marketers can develop products and
tailor their marketing programs to serve
these differences. 
GENDER
• Gender has long been
used for segmenting
markets for clothing,
hair dressing products,
cosmetics and magazines.
This seems natural. 
Men and women have
different preferences for such products.
Marketers take advantage
of differences in tastes
between genders by tailoring
different products and promotional
Income segmentation
• Income segmentation is
employed for products such
as automobiles, boats,
clothing, cosmetics and travel.
For such products, marketers are primarily
interested in identifying and targeting
higher income customer groups because
these consumers often have the greatest
purchasing power.  Moreover, consumers in
these groups are most likely to be attracted
to innovations in these product categories.
GENERATION SEGMENTATION
• Many researchers are now turning to
generation segmentation.
• The idea is that each generation is
profoundly by the milieu in which it grows up.
• The music, movies, politics and events of the
time.
• Some marketers target baby boomer(born
b/w 1946-64)
• Generation X-(born b/w1964-1984)
SOCIAL CLASS
• Social class has a strong
influences on a a person’s
preference on car , clothing , home,
leisure activities, reading habits and so
on.many companies design
product for specific
social class.
Psychographics Segments
• Dividing a market into different groups
based on life style or personality
characteristics.
Life style
• Segmenting markets based
on lifestyle amounts to
creating segments based on
differences in how people
choose to live their lives.
Because life style is highly
predictive of many purchase
behaviors, marketers attempt to characterize
consumers' life style patterns by asking them
questions about their activities, interests, and
opinions. 
1. Lifestyle segmentation groups individuals
according to how they spend their time,
importance of things in their surroundings,
beliefs about themselves and broad issues, and
some demographic characteristics.
2. This variable encompasses numerous
characteristics related to people’s activities,
interests, and opinions.
personality
• Market have used personality
variables to segment
markets.
They endow their product
with brand personalities
that correspond
To consumer personality.
BEHAVIOR SEGMENTATION
Dividing a market into groups based on
 consumer knowledge,
 attitude,
 use or response to a product.
Many marketers believes that behaviors
variables occasion, benefits, user status,
usage rate, loyalty status, buyer-
readiness stage, and attitude
are the best understanding point for building
market segmentation.
OCCASIONS
• Dividing a market into groups according to
occasions when buyers gets the idea to buy,
actually make their purchases or used
purchased item.
• Mother’s day
• Christmas
• Eid
BENEFITS

• Dividing a market into groups buyers


according to different benefits that
consumer seek from the product.
User status
• Marketing can be segmented into groups of
non-user, ex user, potential user, first time
user, and regular user of product.
Marketers try to differentiate between users and
non-users of product categories when consumer
characteristics are tied to the need for the product
itself rather than to the use of different brands. 
Usage rate
• Markets can be segmented in the light of
light, medium, or heavy use of a product.
• Marketers usually attract one heavy user
of the product rather than several light
user.
Loyalty status
• Firms can learn a lot by analyzing the loyalty
patterns of customers in markets.  By
finding the characteristics of loyal and non-
loyal customers for their brand and those of
major competitors, firms can find ways to
keep their customers loyal and attract non-
loyal customers away from competitors. 
Brand loyalty often is defined based solely
on consumers' patterns of repeat purchase
behavior. 
• Buyer can be divide into four groups
according to brand loyalty
• HARD-CORE LOYALS:consumer buy one
brand all the time.
• SPLIT –LOYALS:consumer who are loyal to
two or three brands.
• SBIFTING LOYALS:consumer who shift
from favoring one brand to another.
• SWITCHERS:who show no loyalty to any
brands.
Buyer –readiness stage
A market consist of people in different
stages of readiness to buy a product.
Some are unaware, somr are unaware, some
are informed aome are interested.
MULTI-ATTRIBUTION
SEGMENTATION
• Marketer do not limit their analysis
to only few market
segmentation.they crossing several
variables in an effort to identify
smaller, better defined target
groups.
BASES FOR SEGMENTATION
BUSINESS MARKETS
• Business market can be segmented
with many of the same variable
employed in consumer market. Such
as
• geography
• Benefit sought
• Usage rate etc
• DEMOGRAPHIC:

• INDUSTRY:which industry should we serve?


• COMPANY SIZE:what size companies should
we serve?
• LOCATION: which geographical area should
we serve?
OPERATING VARIABLES
• TECHNOLOGY:what customer’s technology
should we focus on?
• USER-STATUS:should we serve users
medium users, light users, or non user?
• CUSTOMER CAPIBOILITIES:should we
serve Customers needing many or few
services?
Purchasing approaches
• Purchasing-function organization:should
we serve companies with highly centralized
or decentralized purchasing organization?
• POWER STRUCTURED:should we serve
companies that are financial y dominated
,marketing dominated.
• NATURE OF EXISTING
RELATIONSHIPS: should we serve
companies with which we have strong
relationship or simply go after the most
desirable companies?
• PURCHASING CRITERIA: should we
serve companies that are seeking
qualities? Services? Prices?
SITUATIONAL FACTORS

• URGENCY: should we serve companies that


need quick and sudden delivery or services?
• SPECIFIC APPLICATION: should we focus
on certain application of our products
rather than all applications.
• SIZE OF ORDER: should we focus on large
or small orders?
PERSONAL CHARACTERISTICS
• BUYER –SELLER SIMLLARLLY: should we
serve companies whose people and values
are similar to ours?
• ATTITUDES TOWARDS RISKS: should
we serve risk – taking or risk- avoiding
customers?
• LOYALTY: should we serve companies that
show high loyalty to the supplier ?
Four business segments
• Segment 1 : Programmed Buyers. Customers in
the micro segment were small and viewed the product as
a routine purchase item. They had the lowest average
sales of any group and were not particularly price or
service sensitive..
• Segment 2 : Relationship Buyers. Customers in this
micro segment were also relatively small. The product it
self was moderately important in their operations, and
unlike the programmed buyers of segment 1, they were
more knowledge about competitive offerings
• Segment 3 : Transaction Buyers.
Customer in the segment se the product as very
important to their operation.. They received
price discounts averaging about 10% and an
above-average service level;.
• Segment 4 : Bargain Hunters. Customer in
the micro segment were large-volume customers
that received the largest price discount
(averaging 11.3%) as well as the highest level of
services.customer know the alternative supplier
and ready to switch.
Effective segmentation
• The useful market segment must be:
• measurable Segments must be
identifiable and their size measurable :(we
can estimate how many people or
organizations are in the segment. Data about
the population within geographic boundaries,
the number of people in various age
categories, and other social and demographic
characteristics are often easy to get, and
they provide fairly concrete measures of
segment size.
Accessibility:
• The firm must be able to reach members of
targeted segments and served.
Substantiality

• A segment must be large and


profitable enough to serve. This
criterion does not necessarily mean
that a segment must have many
potential customers. develop
marketing programs tailored to each
potential customer’s needs.
differentiable

• The segment are conceptually


distinguishable and respond
differently to different marketing
mix element and programs.

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