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BASES FOR MARKET
SEGMENTATION Group 8
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What is Market
Segmentation?Ø
Market segmentation involvesaggregating prospective buyers intogroups that have two key
characteristics.
o have common needs ando respond similarly to a marketing
action.
o It is the Consumer who are Segmented,
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Benefits of
Segmentation
Effective use of resources
Gain a focus
Create Value for a target market
Positioning
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Market SegmentationVariables
MarketSegmentati
onVariables
BehavioralPsychographic
Geographic
Demographic
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Geographic Segmentation• Geographic segmentation divides the market
into different geographical units, be theyneighbourhoods, cities, counties, countries, orworld regions such as Europe or South East
Asia etc.• Geographical segmentation is most commonly
used by multi-national and global businesses,who may alter their marketing mix based onthe differing needs of consumers in each
geographic segment they operate within.
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Marketing for Hospitality and Tourism, 3e
©2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens
Demographic Segmentation
Dividing the market into groupsbased on variables such as:
Age
Gender
Family size or life cycle Income
Occupation
Education
Religion Race
Generation
Nationality
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DemographicSegmentation
o Emami segmented its product in genderWomen’s: Naturally fair
Men: Fair and handsome
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Psychographic Segmentation
Divides Buyers Into Different Groups Basedon:
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Psychographic Segmentation
Example:
Café Coffee Day
They choose lifestyle oriented, urban consumers as targetwith youth.
They make coffee an ‘experience’ and provide a specialexperience to chosen segment. CCD has estimated thatpresently 60% of the footfalls in its 300 outlets belong tostudents between the ages of 15 to 24 years. The CCD are
targeting students and trying to establish a space in theirlives.
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Marketing for Hospitality and Tourism, 3e
©2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens
Behavioral Segmentation
Dividing the market into groups based onvariables such as:
Benefit sought: - Quality / economy / service / look etc.of the product.
Example: Nestle has found a separate segment attanoodles as distinct from the maida noodles.
Usage rate: - Heavy user / moderate user / light user of aproduct.
User status: - Regular / potential / first time user /
irregular /occasional. Loyalty to brand: - Hard core loyal / split loyal / shifting /
switches.
Occasion: - Holidays and occasion stimulate customer topurchase products.
Attitude toward offering: - Enthusiastic / positive
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• Size, purchasing power,profiles
of segments can bemeasured.
• Segments can beeffectively reached and served.
• Segments are large or
profitable enough to serve.
Me
a
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u
r
a
b
le
Ac
ce
ssi
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Subst
antial
Ac
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ab
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• Effective programs can bedesigned to attract and serve
the segments.
Requirements for
effective segmentation