MARKET SEGMENTATION

Prof Prashant Kumar GuptaJain College Of MBA and MCA

Segmenting Consumer Markets

Major Segmentation Variables

Geographic

Demographic

Psychographic

Behavioral

Dividing markets into geographic units like nation,

cities, region, neighbourhood, etc.

Its important in India because of the variation in preferences and habits across different

regions; rural and urban areas being major segments

Product penetration, infrastructure, income levels etc. make segmentation more important and complex

Geographic Segmentation

Case:-• Arid regions of Rajasthan and Gujrat ,

during summers, coolers are used because the weather is dry• However they may be ineffective in Goa

or Kerela because of humid weather, ACs might be preferred here

Demographic Segmentation

AGE• Wants and Needs change with age and

life cycle• Eg: Hindustan Lever introduced pink

coloured Pears soap for kids

LIFE STAGE• Different requirements at different life

stages• Marketers can meet different concerns

with specific products and services

GENDER• Attitude and behavioral difference• Research has fond out that men need

to be invited to touch the product while women just pick them up• Gender differentiation has long been

applied to clothing, hair style, cosmetics, magazines, etc.

INCOME• Defines ability to participate in

exchange• However not a very preferred segment

as two people with same income can have different lifestyle, attitude and values• However Indian scenario is a bit

different in terms of products like washing powder, cosmetics, etc.

GENERATION• Influenced by time in which he grows• Overall have same cultural, political

and economic conditions

SOCIAL CLASS• Have strong influence on preferences in

cars,, clothing, home, furnishings, etc.• Unique system peculiar to India

Psychographics is the science of using psychology and

demographics to better understand consumers

Segmented on the basis of psychological/personality traits, lifestyle or values

Values and lifestyles significantly affect the product and brand choices

Religion has significant affect

Eg: McDonald’s struck off beef from its offerings in India

Psychographic Segmentation

SRI Consulting Business Intelligence (SRIC-BI)

gave this most popular classification system .

Based on responses to a questionnaire featuring 4 demographics and 35 attitudinal questions

Updated every year with data from 4,000 questionnaires

Psychographic Segmentation

:VALS

Innovators

• Successful• Sophisticate

d• High Self

Esteem• Purchase

upscale and niche-oriented products & services

Thinkers

• Mature• Satisfied• Motivated

by ideals and value, knowledge

• Favour durability, functionality and value in products

Achievers

• Successful and Goal-oriented people

• Focus on career and family

• Favour premium products that demonstrate success to peers

Experiencers

• Young• Enthusiastic• Seek

variety and excitement

• Spend highly on fashion, entertainment and socialising

VALS:Tendencies of groups with higher

resources

VALS:Tendencies of groups with lower

resources

Believers

• Conservative

• Conventional

• Traditional• Favour

familiar products and are loyal to established brands

Strivers

• Trendy• Fun Loving• Are

resource constrained

• Favour stylish products

Makers

• Practical• Down to

Earth• Self

sufficient• Favour

products with practical or functional purpose

Survivors

• Elderly people

• Passive People

• Loyal to favourite brands

Divided into groups based on their knowledge of, attitude towards, use of, or response to a product

Decision Roles: Initiator Influencer

Decider Buyer

User Behavioural Variables: Occasion

BenefitsUser StatusUsage RateLoyalty StageAttitude

Behavioural Segmentations

Behavioural Variables

OCCASIONCan be defined in terms of time of day, week,

etc or events in a consumer’s life

BENEFITS• Classified as per benefits consumers seek• Same product with different benfits like

Clinic All Clear and Sunsilk

USER STATUSClassified as ex-users, potential users, first

time users or regular users

USAGE RATE• Light, medium and heavy product users• Heavy users might be less in number but

have significant share in consumption

LOYALTY STATUS• Hard Core Loyals: One brand all the time

Identify strength• Split Loyals: Loyal to 2-3 brands• Find competitive products• Shifting Loyals: Shift from one brand to

another• Find Weakness• Switchers: Show no loyalty

ATTITUDEEnthusiastic, postive, indifferent and negative

Demographic

Industry: Which Industry to serve? Company Size: What size companies should be served? Location: What geographical areas to serve?

Operating Variables Technology: What customer technology should be

focused? User Status: Heavy, medium, light users or non-users?

Situational Factors Urgency: Serve companies which need sudden/quick

service? Specific Application: Certain or all applications

Segmenting Business Markets

Purchasing Approaches Purchasing-Function Organisation: Centralised or

decentralised purchasing organisations? Power Structure: Engineering dominated, Finance dominated

and so on…. Nature of existing companies: Serve companies with strong

relationship or desirable companies? Purchasing criteria: Companies seeking quality or price or

service? Personal Characteristics

Buyer-Seller Similarity: Serve those with similar values like us?

Attitude towards risk: Risk taking or Risk-avoiding firms? Loyalty: Serve companies which show loyalty to suppliers?

Measurable Substantial Accessible Differentiable Actionable

Effective Segmentation Criteria

Find what is conversion model (Attitude)

Home Work

THANK YOU…!