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WHAT IS A MARKET SEGMENT?

A market segment consists of a group


of customers who share a similar set of
needs and wants.
DEFINITION: SEGMENTATION
Segmentation means to divide the marketplace
into parts, or segments, which are definable,
accessible, actionable, and profitable and
have a growth potential. In other words, a
company would find it impossible to target the
entire market, because of time, cost and effort
restrictions.
DEFINE TARGETING
The selection of potential customers to whom a business wishes
to sell products or services. The targeting strategy involves
segmenting the market, choosing which segments of the
market are appropriate, and determining the products that will
be offered in each segment. A business offering multiple
products can determine if the various segments should receive
one generic product (such as in mass marketing), or if each
segment should receive a customized product (multi-
segment), based upon the market's diversity, maturity, the level
of competition and the volume of sales expected.
LEVELS OF MARKET SEGMENTATION
1. Mass Marketing
2. Segment marketing
3. Niche Marketing
4. Micro Marketing
4.1 Local Marketing
4.2 Individual Marketing
PATTERNS OF MARKET SEGMENTATION
1. Homogeneous preferences: It means consumers have roughly
same preferences.
2. Diffused preferences: It means consumer preference is scattered
throughout the market
3. Clustered preferences: Clustered preferences refer to a market
scenario wherein buyers have both homogeneous and diffused
preferences. Put simply, a certain market section tends to buy
the same kind of products; and the other section has more
varied likes and dislikes.
BASES FOR SEGMENTING CONSUMER MARKETS
Region: North, West, South East, Center.

Geographic City/metro size: Under 10000, 10001 50000, 50001 100000


Density: Urban, Suburban, Rural
Climate: Northern, Southern

Age, Family Life Cycle, Gender, Income, Race, Nationality


Demographic Family Size, Occupation, Education, Religion, Generation,
Social class

Occasions, Benefits: Quality service speed, User status: Non user ex-
user potential user first time regular, Usage Rate: light medium heavy,
Behavioral Loyalty status
Readiness stage: unaware aware informed interested intending to
buy, Attitude towards product: positive negative hostile indifferent

Lifestyle: Culture-oriented, sports oriented outdoor


oriented.
Psychographic Personality: Compulsive, ambitious, authoritarian
BASIS OF SEGMENTING BUSINESS MARKET

1. Demographic
2. Operating Variables
3. Purchasing approaches
4. Situational factors
5. Personal Characteristics
DEMOGRAPHIC
A. Industry: Which Industry should we serve?
B. Company Size: What size company should
we serve?
C. Location: What geographical areas should
we serve?
OPERATING VARIABLES
A. Technology: What customer technologies
should we focus on?
B. User or Non User Status: Should we serve
heavy, light or medium and/or non users?
C. Customer capabilities: Should we serve
customers needing many or few services?
PURCHASING APPROACHES
A. Purchasing-function organization: Should we serve companies with
centralized or decentralized purchasing organization?
B. Power structure: Should we serve companies that are engineering
dominated, financially dominated & so on?
C. Nature of existing relationship: Should we serve companies that we
have strong relationship or go after most desirable companies?
D. General Purchase policies: Should we serve companies that prefer
leasing? Service contract? Systems purchase? Sealed bidding?
E. Purchasing criteria: Should we serve companies that are seeking
quality, service price?
SITUATIONAL FACTORS
A. Urgency: Quick & sudden delivery service?
B. Specific application Should we serve with
specific application rather than all
products
C. Size of the order: large or small orders?
PERSONAL CHARACTERISTICS
A.Buyer seller similarity: Should we serve to
companies who's people & values are similar to
ours?
B. Attitude towards risk: risk taking or risk avoiding
customers?
C. Loyalty: high loyalty to their customers?
MARKET TARGETING
Types of Market Segments:
1. Single market segment
2. Selective specialization
3. Product specialization
4. Market specialization
5. Full market coverage.

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