Market Segmentation

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Summary

Market SegmentsDefinition Market Segmentation? Meaning.

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 (continents, countries, nations, states, regions, counties, or cities).

  2. Demographic Segmentation (age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation, etc). Compare: JICNARS Scale

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

  4. Behavioral Segmentation (consumer knowledge, attitudes, uses, or responses to a product, 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.

Segmentation Requirements



To be useful, market segments must be:

  • Measurable
  • Accessible
  • Substantial
  • Differentiable
  • Actionable

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 more 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 -


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Disadvantages of Segmentation
I kindly request you to please provide with some more limitations or disadvantages of segmantation.Thank you (...)
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Disadvantages of Demographic Segmentation
I need to know the drawbacks of demographic segmentation. Thanks (...)
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Segmentation Examples
I need 2 examples of segmentation process for psychographic and behavioral in retail consumer products goods Thanks. (...)
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Is Segmentation of Taxpayers Possible?
How successfully could segmentation be applied to servicing taxpayers treated as customers of the government. What could (...)
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Forward and Backward Segmentation
When you have selected the data, segments should be deduced. Two types or approaches of segmentation exist: 1. Forward (...)
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🔥 NEW Marketing Implications of Generation Z
Generation Z is an umbrella term used for the people born from 1995 to 2010. They are considered the first digital nativ (...)
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Segmentation and Marketing Mix
How are Segmentation and the Marketing Mix interrelated? (...)
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Industrial Segmentation Variables | B2B Segmentation
Business (industrial, B2B) markets can be segmented with similar variables like those being employed in consumer market (...)
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Behavioral Segmentation
Behavior of people is important from the perspective of both companies and people. Humans interpret other humans ba (...)
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Conditions for a Segment
A group of potential buyers or customers can be called a "segment" if the following four conditions are met: 1. Homogen (...)
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Market Segmenting Process
This article discusses and explains the various steps in the market segmentation process and criteria used in determinin (...)
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Market Segmentation and Target Marketing
The concepts of market segmentation and target marketing, are they the same? (...)
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Ideas for Demand Segmentation based on the Total Need for a Product
Traditionally, marketers have been interested in cracking demand by making more sales using tools like increased sales f (...)
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Target Groups of Puma
I am trying to find out what are the target groups of Puma. Which consumers are buying their shoes, clothes, etc. Who (...)
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Segmentation Requirements
Market segmentation requires accurate and reliable info, and a triangulation of the major environmental factors. (...)
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Trading Market Analysis
I have been asked to put together a presentation with this title: What does a ".Company's Name" Trading Market look like (...)
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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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