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Consumer Behavior - Prof. Rajesh SatpathyMarket Segmentation:

Market segmentation is the process of dividing the total market into relatively distinct homogeneous sub-groups of consumers with similar needs or characteristics that lead them to respond in similar ways to a particular marketing programme.

A market segment is a portion of a larger market in which the individuals, groups, or organizations share one or more characteristics that cause them to have relatively similar product needs.Requirements for Effective SegmentationFive conditions must exist for segmentation to be meaningful:

A marketer must determine whether the market is heterogeneous. If the consumers product needs are homogeneous, then it is senseless to segment the market.

2.There must be some logical basis to identify and divide the population into relatively distinct homogeneous groups, having common needs or characteristics and which will respond to a marketing programme. Differences in one market segment should be small compared to differences across various segments.Video: Pulsar - A Decade of Dominance

Requirements for Effective Segmentation3. The total market should be divided in such a manner that comparison of estimated sales potential, costs, and profits of each segment can be done.

4. One or more segments must have enough profit potential that would justify developing and maintaining a marketing programme.

5. It must be possible to reach the target segment effectively. For instance, in some rural areas in India, there are no media that can be used to reach the targeted groups.How Segmentation HelpsSegmentation studies are used to uncover needs and wants of specific groups of consumers for whom the marketer develops especially suitable products and services to satisfy their needs.Bases for SegmentationA segmentation variable is a characteristic of individuals, groups or organisations that marketers use to divide and create segments of the total market. Segmentation descriptors fall under four major categories and include geographic variables, demographic variables, psychographic variables, and behaviouristic variables. Geographic variables focus on where the customers are located. Demographic variables identify who the target customers are. Psychographic variables refer to lifestyle and values. Behaviouristic variables identify benefits customers seek, and product usage rates. Segmentation VariablesRegion Nation

Urban, Rural State City size ClimateTerrain Market DensityGeographic variables Gender Family size Age Occupation Race Family life cycleReligion IncomeSocial class EducationDemographic variables Personality attributes

Motives

Lifestyle

Psychographic variables Usage volume, OccasionEnd useBenefits soughtBrand loyaltyPrice sensitivity Behaviouristic variables Geographic SegmentationGeographic segmentation focuses on dividing markets into different geographic units, such as regions, nations, states, urban, rural, etc.Demographic SegmentationDemographic characteristics are commonly used to segment the market. Factors such as age, sex, education, income, marital status, household life cycle, family size, social class, etc., are used singly, or in a combination, to segment a market.

Age factor: PEPSODENTPsychographics SegmentationWhen segmentation is based on personality or lifestyle characteristics, it is called psychographic segmentation.Behaviouristic SegmentationDividing the market on the basis of such variables as use occasion, benefits sought, user status, usage rate, loyalty status, buyer readiness stage and attitude is termed as behaviouristic segmentation. Life Style: Mitsubishi Pajero

Life Style: Jaguar F-Type Desire

Segmentation Variables for Organisational MarketsMain approaches to segment organisational markets can be grouped under four heads: Geographic Location Customer Size Product Use Type of Organisation Buying Behaviour and SituationDemographic-Psychographics SegmentationDemographic and psychographic profiles work best when combined together because combined characteristics reveal very important information about target markets.Targeting Market SegmentsInstead of aiming a single product and marketing programme at the mass market, most companies identify relatively homogeneous segments and accordingly develop suitable products and marketing programmes matching the wants and preferences of each segment.Segment Attractiveness and Business Strength FactorsThe attractiveness of a market segment can be evaluated based on the companys current business strength and market potential assessment.Thank You!