Segmentation notes
Segmentation
Why segmentation?
External factors
- globalization
- clutter
- knowledgable customers
- competition
- technology
Internal factors
- allocation of resources
- effective marketing programmes
- opportunies For NPD or/and market development
Breaking down the market
Potential market (everyone out there)
Available market ( those who could buy the product)
Target market (those we address)
Penetrated market (those who actually buy the products)
From segmentation to positioning
SEGEMENTATION (Identify customer needs. Develop profiles of segment)
TARGET MARKET (Evaluate attractiveness of each. Select target market)
POSITIONING (identify differential advantage for each)
Segmentation
A market segment consists of a group of customers who share a similar set of needs and wants
Worth remembering
- descriptive method
- assumes homogeneity
Example. If we have a pie, segmentation is about splitting the pie into smaller pieces. If the internet web users are the market. Then the splitting of the market could be; magazine reader, critic, customer ……
Segmenting consumer markets
- Geographic (glocal, local branding. Splitting up continents and regions very narrowly; Northern Europe. RURAL VS URBAN, do our customers live in the country or in the city?)
- Demographic ( Age and life cycle, life stages, gender, income, generation, social class. Who is the decision maker? The man or the woman? The generation segmentation is based on the time of the customers’ birth. Look at the timeline in the pp. life stages, look at the lifecycle in the pp. know more about your current family life stage.
- Physiological (these four factors affect the consumer behavior – motivation, attidtudes, perception (how you actually seek things, how does the brain actually work?) learning (how do we learn?), attitudes (what are the attitudes? Example; attidtudes concerning politics, green energy, animal welfare)
See
Why segmentation?
External factors
- globalization
- clutter
- knowledgable customers
- competition
- technology
Internal factors
- allocation of resources
- effective marketing programmes
- opportunies For NPD or/and market development
Breaking down the market
Potential market (everyone out there)
Available market ( those who could buy the product)
Target market (those we address)
Penetrated market (those who actually buy the products)
From segmentation to positioning
SEGEMENTATION (Identify customer needs. Develop profiles of segment)
TARGET MARKET (Evaluate attractiveness of each. Select target market)
POSITIONING (identify differential advantage for each)
Segmentation
A market segment consists of a group of customers who share a similar set of needs and wants
Worth remembering
- descriptive method
- assumes homogeneity
Example. If we have a pie, segmentation is about splitting the pie into smaller pieces. If the internet web users are the market. Then the splitting of the market could be; magazine reader, critic, customer ……
Segmenting consumer markets
- Geographic (glocal, local branding. Splitting up continents and regions very narrowly; Northern Europe. RURAL VS URBAN, do our customers live in the country or in the city?)
- Demographic ( Age and life cycle, life stages, gender, income, generation, social class. Who is the decision maker? The man or the woman? The generation segmentation is based on the time of the customers’ birth. Look at the timeline in the pp. life stages, look at the lifecycle in the pp. know more about your current family life stage.
- Physiological (these four factors affect the consumer behavior – motivation, attidtudes, perception (how you actually seek things, how does the brain actually work?) learning (how do we learn?), attitudes (what are the attitudes? Example; attidtudes concerning politics, green energy, animal welfare)
See
References: Segments needs to be distinct for each other. Targeting criteria Identifiable (relevant segmentation criteria) Sufficient (adequate size) Stable/growing Accessible