Marketing Segmentation
Marketing segmentation is nothing but dividing the market into parts or into different groups. Consumers
behave in a group. Each such group has its own model of behaviour identifying
such group of consumers is known as marketing segmentation. It is marketing
strategy to produce & market producers that suits the need of a particular
group of consumer.
Importance of Market/Marketing Segmentation
Market
segmentation is built around the consumers. In other words, the company
analyses the needs of the consumers, & the group of those consumers who
have similar needs. It tries to satisfy those needs by having common marketing
program, without such segmentation, market program becomes haphazard & they
lead the company nowhere. A small company with limited resources can select a
particular group of consumers & market its products efficiently by
selecting the marketing mix suitable to that group.
Basis of Marketing Segmentation
The following factors
are considered before dividing the market:
1) Geographical Factors: On the basis of geographical
factors, market may be classified as
state-wise, region-wise & nation-wise. Many companies operate only in a particular area because
people behave differently in different areas due to various reasons such as climate,
culture, etc.
2) Demographic Factors: This is the most widely
used basis for market segmentation. Market is classified on
the basis of population, using ages, income, sex, etc as indicators.
- Age: It is known fact that people of different ages like different products, need different things, & behave differently. Almost all companies use this factor to reach the target market. On the basis of age, market in our country is divided into children’s market, teenager’s market, adult’s market, & the market for old people. Companies use the census data to prepare marketing strategies on the basis of age.
- Sex: There is a variation of consumption behavior between males & females. This factor is used as a basis for segmentation for products like watches, clothes, cosmetics, leather goods, magazines, motor vehicle, etc.
- Family Life Cycle: This is another important factor, which influences the consumer’s behavior. E.g.: Before making purchases, a bachelor may consult his friends, a boy may ask his parents & a married man asks his wife. The study of family life cycle helps a company to prepare an effective promotional strategy.
3) Psychological factors:
- Personality: Most consumers are influenced by personality traits. This is particularly true in the case of urban consumers. On the basis of personality, consumers may be divided in to introverts (reserve people), talkative, status, conscious, suspicious & so on.
4) Economic Factors: On the basis of economic
factors, markets have been classified in the westerns countries
as follows:
a. Upper
Class b. Upper-upper
class c. Lower-upper class
d. Middle
class e. Upper-middle
class f. Lower-middle class
g. Lower
class h. Upper-lower
class i. Lower-lower class
In our country, it is
classified as upper class (rich), middle class, & the lower class. Another classification
based on income in our country is as follows:
- Very Rich
- The Rich class
- The Aspiration Class
- The Destitute
5) Behaviour Factors:
- Occasions: Sellers can easily find out certain occasions when people buy a particular product. E.g.: Demand for clothes, greeting cards, etc increases during the festival season. Demand for transportation, hotels etc increases during the holiday seasons.
- Benefits: Each consumers expects to fulfill certain desire or to derive some benefits from the product he purchases. E.g A person may purchase clothes to save money & another to impress others. Based upon this, markets may be classified as markets for cheap price products & market for quality products etc.
- Attitude: On the basis of attitude of consumers, markets may be classified as enthusiastic market, indifferent market, positive market, & negative market.
 |
Market Segmentation |
Benefits of Market Segmentation
The
purpose of segmentation is to determine the differences among the purchases
which may affect the choice of the market area & marketing strategies.
Following are some of the benefits of marketing segmentation.
- It helps to formulate marketing programs.
- It helps to understand the complex behavior of consumers
- Tastes & Preferences of consumers may be easily determined.
- It helps in locating the new markets
- It helps marketing programs beneficial to consumers as products are produced & sold according to their needs
Levels of Marketing Segmentation
Buyers have different and unique needs and wants. Every buyer is
potentially a separate market. Ideally, then a seller might design a separate
marketing program for each buyer. Some companies serve buyers individually,
many others face larger number of smaller buyers and do not find complete
segmentation. Thus market segmentation can be dividing into:
1. Mass Marketing - In simple words seller offer same product for all the
buyers with different needs and seller engages in the mass production, mass
distribution, and mass promotion of one product for all buyers.
2. Niche Marketing - A niche is a more closely defined group, it is dividing the
segment in to sub segment and it can be divided by identifying the distinct
trait of consumer which might need special combination of benefits this sub
segments are made for those consumers whose needs and wants are not satisfied.
3. Local Marketing - Local marketing focus on brands and promotion to the needs and
wants of local consumer and design marketing program according to the need of
local consumer groups cities, neighborhoods and even specific stores.
4. Individual Marketing - Individual marketing focus on satisfying the needs and wants of
individual customer it’s also know as one-to-one marketing and customized
marketing it’s the segmentation level where seller offer customized product to
the consumer in other words a product according to the needs and preference of
consumer.