Marketer will identify the customer need and want then only. Learn the four types of market segmentation you can use to reach your target customer and create more effective marketing campaigns. Demographic, geographic, geodemographic, psychographic and behavioural segmentation as product markets tend to mature, customer needs often become more specialized. Segmenting the market for amcham finland abstract market of the 21st century, covering countries from all over the world, is enormously big. This is evident from observation and from the proliferation of popular books describing the heterogeneity of local and global markets. This is a presentation which focuses on analysing the market segmentation, targeting and positioning.
Geographic segmentation countries states regions cities 4. Products and services, presented in markets, are of very big variety. Market segmentation is the activity of dividing a broad consumer or business market, normally consisting of existing and potential customers, into subgroups of consumers known as segments based on some type of shared characteristics in dividing or segmenting markets, researchers typically look for common characteristics such as shared needs, common interests, similar lifestyles or even. Market segmentation helps the marketers to devise and implement relevant strategies to. Market segmentation what is it and why is it important. Demographic segmentation age gender education income religion nationality 5. This free study guide has been prepared to meet the information needs of universitylevel marketing students throughout the world. A set of target groups to which future marketing efforts will be focused. Segmenting consumer and business markets bases for segmenting consumer marketsform segments by looking at descriptive characteristics. Consumer behaviour jane priest is a teaching fellow at edinburgh business school and teaches parts of the oncampus marketing course, as well as the consumer behaviour elective by distance learning. Six reasons for market segmentation why use market.
In the section of the market segmentation process the different types of market. This is perhaps the most common form of market segmentation, wherein companies segment the market by attacking a restricted geographic area. The consumer market segments that have high potential to be successful foster or adoptive households. At its most basic level, the term market segmentation refers to subdividing a market along some commonality, similarity, or kinship. For example, goya foods is a us food company that sells ethnic products to grocery stores, depending on the demographic groups the stores servemexican, spanish, or more generally, hispanic. Customer segmentation strategy enables marketing managers to stretch budgets and achieve the desired goals by reaching the most relevant groups to becomes leads. Market segmentation is a process, in which groups of buyers within a market are divided and profiled according to a range of variables, which determine the market characteristics and tendencies. American journal of business education june 2011 volume 4. The purpose of segmentation is the concentration of marketing energy and force on the subdivision or the market. Depending on the level of competition in the product market, segmentation is the natural response of marketers to deal with the situation in market.
Understanding the market segmentation allows marketers to create a more effective and efficient marketing mix generic markets large segments a generic market is comprised of groups of customers who. Demographic segmentations dividing the market into groups based on demographic variables such as age, sex, family size, family lifecycle, income, occupation, education, religion, race and nationality. Then it identifies groups within the market that share common needs. Market segmentation when the term market segmentation is used, most of us immediately think of psychographics, lifestyles, values, behaviors, and multivariate cluster analysis routines. In the following the variables used in segmenting consumer markets will be explained. Approaches to segmenting markets according to dolnicar 2002, there are two main approaches to segmenting markets, the first adopts the view that the market is considered to consist of customers which are essentially the same, so the task is to identify groups which share particular differences. The uses of this technique are discussed, together with the procedures for segmenting markets. It is the consumer who are segmented, not product, nor price it would be useful to provide one important clarification right at the beginning. The market segmentation first identifies everyone with an interest in and need for this type of clothing. Marketer will identify the customer need and want then only decide if it is practical to develop marketing mix to satisfy those wants. Segmenting consumer market geographic demographic behavioral psychographic 3. Explain how companies identify attractive market segments and choose a target marketing strategy.
Pdf customer service represents a significant opportunity for segmenting markets. The four bases for segmenting consumer market are as follows. Steps in market segmentation management study guide. At the heart of successful market definition is the concept of a prospect a.
In 1956 wendell smith pioneered the definition of market segmentation for marketing purposes and since then more than. Certain brands tend to be associated with certain occasions. Before the 1960s, most companies tried to market products to the. Good return is obtained with offerings that are relevant to the existing activities of individuals, made at a general price they find acceptable, made available at outlets they already frequent. Market segmentation is the basis for better targeting different customer groups. Segmenting and targeting free download as powerpoint presentation.
The bases for segmentation of consumer markets may be divided into two broad. That is, the members of a market segment share something in common. Well address the development of market segmentation, how it serves as the foundation of a marketing strategy, the types of segmentation to consider and the process of developing a market segmentation strategy. In marketing, segmenting, targeting and positioning stp is a broad framework that summarizes and simplifies the process of market segmentation. Marketing managers must understand the importance of segmenting a market and the specific criteria for successful segmentation. Niche marketing enables marketers to craft and deliver messages specifically for the target audience.
Or to put it another way, market segmentation is the division of a mass market into identifiable and distinct groups or. Segmenting and targeting market segmentation marketing. Using different types of market segmentation allows you to target customers based on unique characteristics, create more effective marketing campaigns, and find opportunities in your market. Segmenting consumer marketsbusiness markets, market targeting strategy, the positioning process. View test prep chapter 8 segmenting and targeting markets. For example, an individual may buy one brand of beer if he or she were taking a sixpack to a party, and another if it was for a occasion with a friend. Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions, counties, cities, or neighborhoodthe company can. Our focus is on consumer markets rather than business markets, but most of the following concepts also apply to b2b. Target marketing communications businesses need to deliver their marketing message to a relevant customer audience. Cornell university school of hotel administration the. Chapter 5 market segmenting, targeting, and positioning. It had an uptodate retail image with high street shops aimed at the middle market male. These could include groups associated with different sports, levels of athletic activity. But this decision needs support by right strategy and put customers awareness on their mind of products thats provided.
Creating different market target is a good beginning to be done by busineesman to avoid tight competition with competitors. Pdf segmentation of markets based on customer service. Market segmentation is a much broader concept, however, and it pervades the practice of business throughout the world. Steps in market segmentation segmentation refers to the process of creating small segments within a broad market to select the right target market for various brands. Demographic segmentation geographic segmentation psychographic segmentation behavioural segmentation. Segmenting consumer markets from principles of marketing. See how you can leverage market segmentation by learning. The management can respond to meet changing market demand.
Overview into the dynamics of market segmentation market segmentation involve the breaking down of the total market for a product or service into distinct subgroups or segments, where each may conceivably represent a distinct target market to be reached with a distinctive marketing mix with the aim of meeting the customers needs and wants. A target marketing s trategy is focused on the customers needs and wants. By segmenting markets, the target customer can be reached more often and at lower cost. She is a key member of a team exploring how technology can be. Reaching additional customers, differentiating prices and absorbing purchasing power.
Variables for segmenting consumer markets sketchley sketchley is the largest uk dry cleaning operation, with ove 500 retail outlets in the midlands and south east of the country. Segmenting the portfolio properly will ensure that the loss experience is applied appropriately in conjunction with the estimation of the loss reserves. Achieving customer lockin, upselling and crossselling. Develop strong positions in spealized market segment. Segmenting consumer markets geographic segmentation dividing a market into different geographical units such as nations, states, regions, counties, cities, or neighborhoods. If the target market is too broad, there is a strong risk that 1 the key customers are missed and 2 the cost of communicating to customers becomes too high unprofitable. Market segmentation is the process of dividing a target market into smaller, more defined categories.
Consider, for example, the nine nations of north americagarreau, 1982, latitudes and attitudes. Market segmentation is a consumer oriented process and. When reflecting on the nature of markets, consumer behaviour and competitive activities, it is obvious that no product or service appeals to all consumers and even. Markets, sometime, speaks of product segments and price segments and use these expressions as. Many of the same criteria used to segment consumer markets are also used to segment b2b markets.
Similarly, qualitative risk factor adjustments are typically made at the pool level. Business to consumer market segmentation 3 flashcards. Well email you at these times to remind you to study. The primary objective of segmentation is to identify customers with similar attributes, and to find which segments of customers that are attractive from a profit perspective. Market segmentation wharton faculty platform university of. After completing this chapter, student should be able to understand. Abstract excerpt almost any marketing textbook will tell you that the key to successful marketing can be summed up by the stp strategythat is, segmentation, targeting, and positioning.
Market definition, market segmentation and brand positioning. List and discuss the major bases for segmenting consumer and business markets. Global market segmentation defined as the process of identifying whether they be country groups or individual consumer groupsof potential customers with homogeneous attributes who are likely to exhibit similar responses to a companys marketing mix. This study guide is a comprehensive discussion along with many examples of the key aspects of.