TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75

Affiliated to Institution of G.G.S.IP.U, Delhi

MARKET SEGMENTATION

MAHTAB ALAM Assistant Professor

TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75

MARKET SEGMENTATION

“Market Segmentation consist of taking the total heterogeneous market for a product & dividing it into several sub-market or segments, each of which tends to be homogeneous in full significant aspects.”

-----WILLIAM .J. STANTON-----

TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75

Levels of Segmentation

1.Segment marketing:A Segment consist group of customers having similar purchasing power, geographical location or buying habits etc. Their common factor make them belong to a particular group is called as segment marketing

Mobile Customers may look for various factors e.g:Mobile Buyers :- Low Price phone (Segment 1) Business Phone(Segment 2) Music Phone(Segment 3) 2. Niche Marketing: A Niche is a more narrowly defined greoup which consist

few no of customers but their needs are satisfied with highly focused strategy. This group always looks for highly qualitative products and is not worried about the price structure.

e.g: Ferrari & BMW etc 3. Local/Neighborhood Marketing: Here all Marketing plans &programmes

being tailored according to the needs & wants of local group like neighborhood, trading areas etc.

e.g General stores etc.

TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75

4. Customization/Individual Marketing: It means segment of one ore we can

say one to one marketing. Here products & services developed as per the requirement of individual customer.

e.g: Software development

TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75

BASIS OF SEGMENTATION

Customer Based Segmentaton

• Geographical

• Demographical

• Psychographical

• Buyer Readiness

Product Based Segmentation

• Product Use Situation

• Benefit Segmentation

• Quantity Consumption

Competition Based Segmentation

• Hard Core Loyal

• Soft Core Loyal

• Switchers

TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75

Basis of Market Segmentation

Market can be divided on the basis of several factors. Some of the factors are as given below:

(1)Customer Based Segmentation:It covers those factors which are related to customer and segregate the mass into small segments.. It includes

(a)Geographical Location: In ths approach marketers divide the market on the basis of geographical location of customer like

– Hilly area (Shimla&Mussorieetc) – Sea/Beach area(Mumbai &Bangloreetc) – Sand area( Rajasthan)

(b)Demographical Factors: Marketers can also divide the market on the basis of demographical factors which includes

– Age – Gender – Literacy Level – Income – Population etc.

TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75

(c)Psychographic Variables:Psychographical variables are also very significant factor for segmenting the market because customers of same age, income and other similar factors reacts differently regarding new product, innovation & risk factors which differentiate each customer. so we can segment the market by grouping all customers belong to common psychographic variable.

(d) Buyer-Readiness Stages: Another variable for segmenting

the market is buyer readiness or mentally preparedness of customer to buy certain product. At any given frame of time all the buyers would be at different stages of readiness. They are

– Unaware buyers – Aware but not Interested buyers – Interested buyers

TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75

(2)Product based Segmentation: These factors are related to the product and its features which helps marketers to segment the entire market into small groups.

(a) Product use situation: This approach focus on the factor that various

customers may use the same product in different use situation. e.g:Use of Rasna differently

• Some uses it as Party drink. • Some uses it for unexpected guests. • Some uses it as refreshing drink after tiring working day.

(b)Benefit Segmentation: Here marketer identifies that a customer looks for which attribute while taking purchase decision. Their purchase decision may get influenced by various factors like

e.g: In Refrigerator Purchase decision customers look for • Durability • Electricity Saving (Star rating) • Space for storage

TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75

(c)Quantity consumed: We can segregate the customers on the basis of their usage/consumption in terms of quantity like

– Heavy Users

– Moderate Users

– Light Users

(3)Competition based Segmentation: In this point focus is on the loyalty of consumers . How a competitive brand perform in the market to attract & sustain their customers for long term.

(a)Hard Core Loyal: Hard core loyal customers are those customers who continue to buy the single Brand over the period of time and do not look for any other alternative or substitute brand.

e.g Newspaper Readers,Cigarette Smokers etc.

TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75

(b)Soft Core Loyal:This segment consist those customers who are loyal to 2 to 3 brands in a product group and prefer consumption depending upon availability and other convenience options but restrict their choice to few limited brands only.

e.g: Soft core loyal of a Toothpaste consumer may have following brands choice

• Colgate Gel • Pepsodent Gel • CloseupGel

(c)Switchers: These category of customers never remain stick to a single brand. They keep on changing their brand preferences depending upon situational benefits like

• Price off • Quantity Discounts • Free Gift items • Contest • Schemes etc.

• e.g: Flight ticket customers, Food Restaurant customers, Cinema Theatre customers etc.

TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75

Market Segmentation Procedure/How to Segment the Market

Marketers has to go through some stages while segmenting the market. At these stages all the functions needed to be performed for effective market segmentation. These stages are:

(1) Survey Stage: This is the first stage where marketers need to collect the

data by questionnaire or any other method of data collection to know about the characteristics of customers which includes their taste & preference, purchasing power, buying motives, geographical location etc.

(2)Analysis Stage: After collection of sufficient data of customers we can identify the factors which differentiate customer groups. These differentiation reflect group & sub group of similar customers.

(3)Profiling Stage: This is the final stage where we segregate some customers in one and some in another group on the basis of their differentiating features. In other words we can say this is the final segmentation of group and profiling the group.

TRINITY INSTITUTE OF PROFESSIONAL STUDIES Sector – 9, Dwarka Institutional Area, New Delhi-75