Market Segmentation

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Description of Market Segmentation. Explanation.


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Market SegmentsDefinition Market Segmentation. Description.

Market Segmentation is the marketing process of identifying and breaking up the total market into groups of potential customers with similar motivations, needs, characteristics or behavior, who are likely to exhibit homogeneous purchase behavior.

Undertaking this process allows marketing efforts to be targeted at select groups. In determining their segmentation strategy, organizations can choose to pursue the whole market with a single offer (Undifferentiated Marketing), pursue only certain segments with specific offers (Niche Marketing) or pursue individual customers with specific offers designed just for them (Customization).

The process enables a company to develop a suitable Marketing Mix for each of the chosen market segments.

A Market Segment is a (relatively) homogeneous group of customers with similar characteristics, wants, needs or behaviors which is likely to respond similarly to a given marketing mix.

5 Ways or bases of market segmentation

  1. Geographic Segmentation.

  2. Demographic Segmentation (age, gender, income occupation etc). Compare: JICNARS Scale

  3. Psychographics Segmentation (values, attitudes, social class, lifestyle and aspirations). Compare: Values and Lifestyles

  4. Behavioral Segmentation (occasion, benefits sought, loyalty status, user status, buyer readiness).

  5. Product differences.

Steps in segmentation. Process

  1. Identify the total market.

  2. Determine the segmenting dimensions.

  3. Profile each segment.

  4. Assess segment attractiveness.

  5. Select target market.

  6. Determine positioning (marketing mix) for each segment.

Strengths of Segmentation. Benefits

  • Organization get to know its customers better.

  • Provides guidelines for resource allocation.

  • It helps focus the strategy of the organization.

Limitations of Segmentation. Disadvantages

  • Targeting multiple segments increases marketing costs.

  • Segmentation can lead to proliferation of products.

  • Narrowly segmenting a market can hamper the development of broad-brand equity.

Book: Dowling, G. - The art and science of marketing; Marketing for marketing managers -

Book: Kotler, P., Brown, L., Adams, S. & Armstrong, G. - Marketing, 6th edition -

Book: Simpson, P.M. - Marketing segmentation and target markets; Marketing best practices; 2nd edition -

Market Segmentation Forum (14 topics) Help
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Forward and Backward Segmentation

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Conditions for a Segment

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Segmentation Examples

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Segmentation Requirements

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Market Segmenting Process

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Segmentation and Marketing Mix

Segmentation and the Marketing Mix are interrelated because one can know by segmenting targeted customers into individual groups how to come up with a product that best suits the needs of each group, can determine the best pricing strategy based on t...

Disadvantages of Segmentation

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Segmentation and Marketing Mix

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Market Segmentation Special Interest Group

Special Interest Group


Expert Tips - Market Segmentation Premium
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The Importance of Customer Differences in Markets with Network Effects: the Limits of Scale

Network Effect, Network Strategy, First Mover Advantage, Second-mover Strategy, Customer Intimacy, Market Segmentation

Resources - Market Segmentation Premium
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Target Marketing and Market Segmentation

Target Marketing, Market Segmentation, Strategy

Marketing Research: Introduction and Techniques

Marketing Research, Qualitative Marketing Research Methods, Research Experiments

Customer Segmentation by Emotion: The EMO-index

Consumption Behavior

The Importance of Noncustomers

Market Research, Customer Strategy, Innovation Strategy, Customer Survey Pitfalls


Market Segmentation


Market Segmentation


Market Segmentation


Market Segmentation

Compare with: 3 C's (Ohmae)  |  Multi Channel Marketing  |  Target Marketing  |  Positioning  |  Marketing Mix  |  Extended Marketing Mix (7-Ps)  |  4S Web Marketing Mix  |  Competitive Environment  |  Competitive Intelligence  |  Competitive Position  |  Values and Lifestyles  |  Profit Pools  |  SOSTAC

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