1. What is Market Segmentation?
Market segmentation can be defined as the process of dividing a market into distinct subsets of consumers with common needs or characteristics, so as to select one or more segments to target with a distinct marketing mix.

2. Bases of Segmenting Consumer Market
Geographic
Segmentation
Psychological
Use-Related
Demographic
Psychographic
Use-Situation
Socio cultural
Benefit
Hybrid

3. Geographic Segmentation
Region: North, West, East, South
City Size
Density: Urban, Sub-urban, rural
Climate: Rainy, Dry, Cool

4. Demographic Segmentation
Demography refers to the vital and measurable statistics of a population.
Demographics help to locate a target market, whereas psychological and socio-cultural characteristics help to describe how its members think and how they feel.

5. Life Development Stages Pepsi Youngistan target young generation
Product needs and interests often vary with consumer’s age.
So marketer target their product to a specific age group
Life Development Stages
Pepsi Youngistan target young generation

6. 2. Gender
Gender is quite frequently a distinguishing segmentation variable.
But now a days, sex roles have blurred, and gender is no longer an accurate way to distinguish consumers, as now they are more involved in purchase for opposite sex.
Earlier cosmetics were used by females only, but now men have become significant user of cosmetics.
Targeted on Females
Targeted on Males

7. 3. Marital Status
Marketers are interested in the number and kinds of households that buy certain products.
They also are interested in determining the demographic and media profile of household decision makers to develop marketing strategies.
Singles, divorced, single parents have different buying patterns in comparison to married couple with a family.
Targeted on Singles
Targeted on Family

8. 4. Income Income is the ability to pay for a product.
Marketers launch products for different income categories.
Upper Income segment
Lower Income segment

9. 5. Education & Occupation
Some products are for specific profession. In that case marketers segment the market according to the occupation.
Best media for illiterate & less educated
Software for pathologists
Best media for highly educated
Software for Architects

10. 6. Family Life Cycle
This segmentation is based on premise that at each phase of life cycle, the family need different products and services.
Each stage reflect age, marital status, employment, income etc. (composite variables)

11. 6. Family Life Cycle
Financial services industry segments customer in terms of family life cycle stages because it has been found that families financial needs tend to shift as they progress through the various stages of life.
Education Plan

12. For Lower Middle Social Class
This segmentation is based on premise that at each phase of life cycle, the family need different products and services.
Each stage reflect age, marital status, employment, income etc. (composite variables)
For Lower Middle Social Class
For Upper Social Class

13. 8. Culture and Sub Culture
Members of same culture tend to share the same values, beliefs and customs.
Marketers who use cultural segmentation stress specific, widely held cultural values with which they hope consumers will identify.

14. Psychographic Segmentation
Buyers are divided into different groups on the basis of lifestyle or personality and values.

15. Personality
Ford buyers were identified as independent, impulsive, masculine, alert to change, and self confident.
Chevrolet owners were conservative, thrifty, prestige conscious, less masculine, and seeking to avoid extremes.

16. Lifestyle Psychographic refers to lifestyle analysis.
There various instruments to measure lifestyle.
AIO Inventory (Activities, Interest and Opinions)
VALS System (Value and Lifestyle)

17. Behavioral Segmentation
Buyers are divided into groups on the basis of occasion, benefits, user status, usage rate, loyalty status, buyer readiness stage and attitude.

18. Valentine Celebration
Occasion
Rakhi Celebration
Diwali Celebration
Valentine Celebration
From Cadbury

19. 2-in-1: Whitening + Mouth Freshener
Benefit Segmentation
24-Hour Protection
2-in-1: Whitening + Mouth Freshener

20. Targeted on Heavy SMS and Web Users
Usage Rate
Light
Medium
Heavy
Targeted on Heavy SMS and Web Users
User Status
Nonuser
Ex-user
Potential user
First time user
Regular user

21. Readiness Stage & Loyalty
Membership Card for Loyal Customers
Campbell seeks to create Awareness and Interest

22. Readiness Stage Loyalty Status Attitude Unaware Enthusiastic Positive
Informed
Interested
Desire
Intend to buy
Loyalty Status
Hard core loyal
Split loyal
Shifting loyal
Switchers
Attitude
Enthusiastic
Positive
Indifferent
Negative
Hostile

23. Multi Attribute Segmentation (Geoclustering)
Marketers are increasingly combining several variables of segmentation in an effort to identify smaller, better defined target groups.
It is known as Multi-attribute segmentation or Hybrid Segmentation or Geoclustering.
E.g. PRIZM (Potential Rating Index by Zip Marketers) is one of such hybrid segmentation based on five factors:
Education and affluence
Family life cycle
Urbanization
Race and ethnicity
Mobility

24. Summary
Segmentation is dividing the market into segments, so that one segment consist of similar type of customers.
Segmentation can be done on the basis of four major classes of consumer characteristics.
These include geographic, demographic, psychographic and behavioral segmentation.
On the basis of type of product, type of potential customer, basis for segmentation is decided.
Some companies use hybrid segmentation (geoclustering), where they segment on the basis of two or more criteria rather on single variable.
Product, price, promotion and distribution decision all depend upon the segment chosen.

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