MARKET SEGMENTATION:

WHAT IS SEGMENTATION?SSegmentationegmentation is the division is the division

of a whole into parts. of a whole into parts. Putting things in order helps Putting things in order helps arrange them so that we can arrange them so that we can make sense of them.make sense of them.

Segmentation is the first step toward understanding consumer groups, determining target markets, determining marketing mix and positioning strategies.

Segmentation is the delineation of a consumer group or groups with homogeneous wants that the organization might successfully satisfy.

According to Philip Kotler, segmentation is dividing a market into “distinct groups of buyer who might require separate products and /or marketing mixes”

WHAT IS MARKET SEGMENTATION?

The process of breaking of buyers into groups that are different from each other but internally similar.

WHAT IS SPORT MARKET SEGMENTATION ?

The division of a consumer market The division of a consumer market into relatively into relatively homogeneous homogeneous segments segments .. Segmentation of the consumer Segmentation of the consumer market allows sport businesses to market allows sport businesses to understand and target specific understand and target specific groups that share characteristics groups that share characteristics and behaviors.and behaviors.

WHAT IS SPORTS INDUSTRY SEGMENTATION?

The division of the sport The division of the sport industry into relatively industry into relatively homogeneous segments homogeneous segments ..

WHY SEGMENT?

Starts from the premise that all buyers are not the same: profit/volume potential, motivations, product uses, needs and desires, etc. The sport marketer should recognize totally different consumption patterns among consumers and provide different products to satisfy these difference.

Segmentation allows you to chose which buyers to target and provides important insights as to how to appeal to them.

Significant competitive advantage. The market is normally followed by targeting a segment in which the firm would like to position its product to maximize its return

Important Criteria

whether to segment a market

Identifiability

Substantiality

Accessibility

Responsiveness

IMPORTANT CRITERIA WHETHER TO SEGMENT A MARKET Identifiability: Identifiability: segments must be segments must be

identifiable and measurable in terms of size identifiable and measurable in terms of size and purchasing power.and purchasing power.

Substantiality: Substantiality: segments must be of a size segments must be of a size large enough to justify marketing mix large enough to justify marketing mix attention.attention.

Accessibility: Accessibility: segments must be reachable segments must be reachable with the customized marketing mix.with the customized marketing mix.

Responsiveness: Responsiveness: segments must respond segments must respond to a marketing mix customized to that to a marketing mix customized to that segment.segment.

MARKET SEGMENTATION

Characteristics age gender geographic location income spending patterns cultural background demographics marital status education language mobility

State- of- Being Segmentation

FOUR BASES OF SEGMENTATION

MARKET SEGMENTATION

geographic location - based upon where people live (historically a popular way of dividing markets)

*the closer the person lives to a sport facility, the more likely he/she is to become involved with activities there.

State - of - being Segmentation

Geographic Segmentation

The reason why we study geographic segmentation is because WHERE people live has a big effect on their consumption patterns.

Additionally, WHERE people live in a city is also a reflection of their income level and we can make certain assumptions about their ABILITY TO SPEND.

This helps people plan store locations and the location of other services.

Demographic Segmentation

Demographic Segmentation is the most common approach to Market Segmentation

Variables are:

• age

• gender (male/female)

• income

• occupation

• education

• household (family - style) size

Gender (male/female)Gender (male/female)

•gender is an obvious way to divide the market into segments since so many products are gender-specific

• clothing

• medical products

• sports products/services

• entertainment

Age

• age is another obvious way to divide the market into segments since so many products are based upon “time of life”

* toys for children

*entertainment for “over 18”

Household (family - style) size

• Segmenting by the “stages in the family life cycle

• There are different buying characteristics of people in each stage of the family

•household (family - style) size

BUYING PATTERNS

• 0-5 young children

• 6-19 school children

• 20-34 young adults

• 35-49 younger middle-aged

• 50-64 older middle-aged

• 65+ seniors

• 80+ SUPER seniors

Income Segmenting markets on the basis of income and expenditure patterns. Income is possibly the most common basis for segmentation

Upper High ClassHigh ClassUper Middle ClassMiddle ClassLower Middle Class

Toyota • Lexus for high end • Camry for the middle of the roaders • Corolla for low end HUL soaps - Dove for high end, Hamam

Psychographic Segmentation

“The use of psychological attributes, opinion ,lifestyles and attitudes in determining the behavioral profiles of different customers”

State of the Mind Segmentation

Psychographic Segmentation

Psychographic profiles on a target market segment are obtained by doing a lot of questionnaires and surveys to ask people if they agree/disagree with certain statements made about particular activities, interests or opinions

AIO - activities, interests, and opinions

Values and Life Style ( VALS ) Typology

Live under the direction of Live under the direction of what other thinkwhat other think

Seek to satisfy their inner needs Seek to satisfy their inner needs rather than others’ expectationsrather than others’ expectations

Driven by more basic needs Driven by more basic needs and yet little satisfaction out of and yet little satisfaction out of work or non-work activitieswork or non-work activities

Behavioural Segmentation

On the basis of occasions, product usage, benefits sought, brand loyalty

Occasions • Y2K Cruises • Hallmark Cards • a greeting card for every occasion - Valentine’s Day Card, Deepavali card

BENEFIT SEGMENTATION

benefits - based on the different expectation that customers have about what a product/service can do for them.

ex.the competitive logs 60 miles per week seeks from a running shoe the product benefits of support ,shock reducduction and long wear .

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