Marketing
segmentation
Marketing
segmentation deals with market segments. Market segment is a group of
people or organizations who share one or
more characteristics that cause them to have similar product
needs. The best market segment meets all of the
marketing criteria.
Marketing
segmentation is the process that a firm
divides the market into different groups who
have various needs, wants, behavior or who might want
different products & services
Customer -based market segmentation can be performed on a specific
product in order to provide a close match
between specific products and individuals.
The process of segmentation is different from
targeting and positioning (designing an appropriate
marketing mix for each segment). This is because of
identifying groups of similar customers and potential
customers; to prioritize the groups to address; to understand their
behavior; and to respond with appropriate
marketing strategies that satisfy the different preferences of each
chosen segment. Revenues are thus improved.
Improved segmentation can lead to
significantly improved marketing
effectiveness. According to Michael Porter
Distinct segments can have different industry structures and thus have
higher or lower attractiveness. With the
right segmentation, the right lists can be purchased, advertising
results can be improved and customer satisfaction
can be increased which leads to a better
reputation.
Successful
segmentation requires the following
-homogeneity within the segment
-heterogeneity between segments
-segments are measurable and substantial
-segments are differentiable
-segments are accessible and actionable
-target segment is large enough to be profitable
Variables Used for Segmentation
Geographic
variables ,region of the world or country,
East, West, South, North, Central, coastal, hilly, etc.
country size/country size
: Metropolitan Cities, small cities, towns. ,Density of
Area Urban, Semi-urban, Rural.
climate Hot, Cold, Humid,
Rainy. ,Demographic variables ,age ,gender Male and
Female ,family size
family life cycle
,education Primary, High School, Secondary, College,
Universities. ,income
occupation ,socioeconomic
status ,religion ,nationality/race (ethnic marketing)
,language ,Psycho graphic variables ,personality ,life style ,value
,attitude ,Behavioral variables ,benefit sought
,product usage rate ,
brand loyalty ,product
end use ,readiness-to-buy stage ,decision making unit
,profitability, income status
Ethnographic variables
,motivations ,usage patterns ,attitudes about
technology
fundamental values
,lifestyle perspective ,standard of living ,profit is there in
business from the existing clients
When numerous variables are combined to give an in-depth
understanding of a segment, this is referred to as depth
segmentation. When enough information is combined to create a clear
picture of a typical member of a segment, this
is referred to as a buyer profile. When the profile is limited to
demographic variables it is called a demographic
profile (typically shortened to "a demographic"). A statistical
technique commonly used in determining a profile is
cluster analysis. Other techniques used to identify segments are
algorithms such as CHAID and regression-based CHAID
and discriminant analysis. Alternatively, segments can be modeled
directly from consumer preferences via discrete
choice methodologies such as choice-based conjoint and maximum
difference scaling.
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