market segmentation

• what is the definition of market segmentation

  • Market segmentation is breaking down a market into sub-groups which share similar characteristics.
  • Identifying and targeting of groups of people with similar needs and developing products or services for each of them.
• demographic - market segmentation

  Gender – products may be targeted at a specific gender group. Traditionally cosmetics have been targeted at women and DIY at men

  Age – Banks offer different accounts to different age groups
• geographical - market segmentation

  Regions of the country – rural, urban, suburban. Global marketing often requires different products for different countries. Global brands such as McDonalds and Coca Cola require different ingredients in different countries.
• psychographic - market segmentation

  Allows targeting of groups on personality and emotionally based behavior – attitudes, opinions and lifestyles. For example: Differentiating cars by emphasising different features – safety and capacity for the family car.
• personality and lifestyle - market segmentation

  Personality and Lifestyle – people are grouped according the way they lead their lives and the attitudes they share – e.g. young professionals may drive sports cars to project their image.
• benefits of market segmentation?

  • Receive a product that is closer to their expectations
  • Can help them stick to their desired principles
  • Can fit better with their budgets and lifestyle
  • Can be superior to the competition
  • Can make them feel that they are getting value for money
  • Because marketing is targeted – the consumer is aware of new features of products
• What is one benefit of market segmentation for businesses?

  Greater knowledge about customers
• How does market segmentation help businesses vary their products?

  It allows them to suit customer needs
• What is a direct outcome of businesses gaining information about customers?

  They can sell more products
• How can market segmentation help identify requirements of different groups?

  By matching needs more precisely
• What advantage does targeted advertising provide to businesses?

  Maximizes advertising effect
• What is the purpose of developing profiles of different markets?

  To understand market characteristics better
• How does market segmentation increase brand loyalty?

  By meeting customer needs effectively
• What financial benefit can arise from developing premium segments?

  Higher profits from higher prices
• How does market segmentation support niche market development?

  By identifying specific customer needs
• What is a consequence of promoting products to the wrong people?

  Wasted resources and potential losses
• How can businesses adjust products to consumer preferences?

  By maximizing market share potential
• rules of market segmentation ?

  • Segments must be recognisable
  • Must be different enough from other segments to make producing for that segment worthwhile.
  • Segments must have critical mass. This means that they must be big enough or produce enough sales value to make the production of products or services targeted at the segment worthwhile.
  • Segments have to be targetable. Having their own identify means that they can be promoted to, and have marketing directed towards them.