MARKET SEGMENTATION

PARIDHI BHANDARI

Key points :- market segmentation, types, need

Market Segmentation

An organisation cannot satisfy the needs and wants of all consumers. To do so may result in a massive drain in company resources. Segmentation is simply the process of dividing a particular market into sections, which display similar characteristics or behaviour. There are a number of segmentation variables that allow an organisation to divide their market into homogenous groups.

Demographic Segmentation

Demographics originates from the word 'demography' which means a 'study of population'. The population can be divided into age, gender, income, and family lifecycle amongst other variables.As people age their needs and wants change, some organisations develop specific products aimed at particular age groups for example nappies for babies, toys for children, clothes for teenagers and so on. Gender segmentation is commonly used within the cosmetics, clothing and magazine industry.

Income segmentation is another strategy used by many organisations. In today's globally competitive environment brands are specifically developed and positioned within particular income segments inorder to maximise turnover.

Products and services are also aimed at different lifecycle segments. Holidays are developed for families, the 18-30's singles, and for those in their 50's.

Geographic Segmentation

Geographical segmentation divides markets into different geographical areas. Marketers use geographic segmentation because consumers in different areas may display certain characteristics and behaviours in that particular region, for example, if we see Mumbai and certain parts of the bastar we will find particular products sold in these regions based on their affluence and they will be totally different. An area can be divided by the town, the region or the country. If you are an organisation working on a global scale you may divide by global regions such as Europe, North America, South America, Asia and Africa. Mcdonalds globally, sell burgers aimed at local markets, for example, burgers are made from lamb in India rather then beef because of religious issues.

Pyschographics Segmentation

Although demographic segmentation is useful, marketers can use alternative segmentation variables which aim to develop more accurate profiles of their target segments. Pyschrographics segmentation can be broken down into lifestyle, social class, and personality characteristics.

Lifestyles segmentation

The Oxford English dictionary defines a lifestyle 'as a way of life' and lifestyle segmentation aims to examine the way people live.

Our lifestyle, our every days activities, our interest, opinions and beliefs on certain issues dictates who we are. Marketers refer to these as AIO's (Activities, Interest and Opinions), and our AIO's dictate our everyday behaviour from where we shop to what we buy. Marketers develop and aim products/services at particular lifestyle groups and develop lifestyle profiles on their target market. If we understand the lifestyle of a particular group we can sell them a product/services on the basis that it will enhance their lifestyle. A lifestyle group is a particular segment defined by the organisation that is marketing a product or service. This lifestyle segment is labeled because individual within it display similar characteristics.

Personality Characteristics

Products and brands can also be aimed at particular personalities. Pigaio motorcycles are aimed at young 18-25 outgoing, independent persons. Often marketers try to develop personalities for their brands and products that mimic that of their target market. Ask yourself if Nike or Levi's was a person, what type of person would they be?

Social Class Segmentation

Divides society into 6 distinct groups based solely on occupation.

A Professional staff

B Middle management

C1 Junior management

C2 Skilled manual

D Semi-skilled and unskilled workers.

E Those dependent on the state.

Social class segmentation works on the assumption that the higher your profession the more you will earn. Thus the more affluent lifestyle you will lead. Marketers use this type of information to sell products and services based on lifestyle behaviour, and your profession does have an impact on the way you behave.

Behavioural Segmentation

Refers to why people purchase a product or service. Behavioural segmentation can be broken down into the benefit a consumer seeks from purchasing a product. How will the product enhance their overall lifestyle. When purchasing a computer the benefit sought maybe of 'ease of use' to the 'need for speed'. Occasion is another variable. When should a product be purchased? The demand for turkeys increases during Christmas, flowers and chocolates on mothers day and so on. Occasion segmentation aims to increase the 'reason to buy factor' and thus increase sales. Usage rate divides customers into light,

medium and heavy users. Heavy users obviously contribute more to turnover then light or medium users, the objective of an organisation should be to attract heavy users who will make a greater contribution to company sales.

Requirements of segmentation.

Before an organisation can target a specific segment accurately it must ask itself a number of questions. It is important to evaluate the effectiveness of a targeting strategy and the viability of the segment, if this is not done then money will be wasted.

The market which is segmented must meet the following criteria:

Measurability of segment: Can you measure the size and growth of the segment. Is the segment growing? In the UK the DVD market is growing at an extremely fast pace. From January 2002 - June 2002 900,000 DVD's were sold. The fast growth rate is attracting many players within the market.

Accessibility of segment: Is it easy for you to target and reach your segment? Can they be reached with basic communication tools such as radio and TV advertising? If you cannot target your segment effectively with marketing communication then it is not viable.

Suitability of segment: Is there enough spending power within the segment for the company to sustain itself.? Will spending within the DVD marketing continue?

Actionability of segment: Does the organisation have enough resources to reach their segments?. It is no point in targeting segments you do not have the resources to cater for. If you were a car manufacturer the organisation would not concentrate on the affluent and price sensitive market if they did not have the resources to do so.

Conclusion: Market segmentation is an important part of any company. this gives us basis of development.this also gives satisfaction to the cunsumers.

Bibliography:

1. www.wikipedia.org

2. www.businessplans.org

3. www.marketsegmentation.com

4. www.businessdictionary.com

5. Kumar, Ramesh; Application Exercises in Management, Vikas Publishing House

6. Varshney & Gupta; Marketing Management, Sultan Chand & Sons

7. Kotler & Armstrong; Principles of Marketing Management

ASSISTANT PROFESSOR COMMERCE

GDRCST (RUNGTA GROUP OF COLLEGE