Maximizing Market Segmentation Strategies for Business Growth

1. Chapter Three MARKET SEGMENTATION

2. What is the market segmentation? Market segmentation can be defined as the process of dividing a market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix. Before the widespread acceptance of market segmentation, the prevailing way of doing business with consumers was through mass marketing-that is, offering the same product and marketing mix to all consumers. The essence of this strategy was summed up by the entrepreneur Henry Ford, who offered the Model T automobile to the public "in any color they wanted, as long as it was black." Who uses market segmentation? Because the strategy of market segmentation benefits both the consumer and the marketer, marketers of consumer goods are eager practitioners. How does market segmentation operate? Segmentation studies are designed to discover the needs and wants of specific groups of consumers, so that specialized goods and services can be developed and promoted to satisfy each group's needs. Many new products have been developed to fill gaps in the marketplace revealed by segmentation research.

3. MARKET SEGMENTATION CATEGORIES AND SELECTED VARIABLES

4. MARKET SEGMENTATION CATEGORIES AND SELECTED VARIABLES/Cont…..

5. MARKET SEGMENTATION CATEGORIES AND SELECTED VARIABLES/Cont…….

6. MALE AND FEMALE SEGMENTS OF INTERNET USERS

7. BASES OF SEGMENTATION Psychological segmentation: Psychological characteristics refer to the inner or intrinsic qualities of the individual consumer. Consumer segmentation strategies are often based on specific psychological variables. For instance, consumers may be segmented in terms of their motivations, personality, perceptions, learning, and attitudes. Psychographic segmentation: Marketing practitioners have heartily embraced psychographic research, which is closely aligned with psychological research, especially personality and attitude measurement. This form of applied consumer research (commonly referred to as lifestyle analysis) has proven to be a valuable marketing tool that helps identify promising consumer segments that are likely to be responsive to specific marketing messages. Socio-cultural segmentation: Sociological (group) and anthropological (cultural) variables-that is, socio-cultural variables-provide further bases for market segmentation.

8. BASES OF SEGMENTATION/Cont…. Family life cycle: Family life-cycle segmentation is based on the premise that many families pass through similar phases in their formation, growth, and final dissolution. At each phase, the family unit needs different products and services. Young single people, for example, need basic furniture for their first apartment, whereas their parents, finally free of child rearing, often refurnish their homes with more elaborate pieces. Family life cycle is a composite variable based explicitly on marital and family status but implicitly reflects relative age, income, and employment status. Social class: Social class (or relative status in the community) can be used as a base for market segmentation and is usually measured by a weighted index of several demographic variables, such as education, occupation, and income. The concept of social class implies a hierarchy in which individuals in the same class generally have the same degree of status, whereas members of other classes have either higher or lower status. Studies have shown that consumers in different social classes vary in terms of values.

9. BASES OF SEGMENTATION/Cont…. Culture and subculture: Marketers who use cultural segmentation stress specific, widely held cultural values with which they hope consumers will identify (e.g., for American consumers, youthfulness and fitness and health). Cultural segmentation is particularly successful in international marketing, but it is important for the marketer to understand fully the target country's beliefs, values, and customs (the cross-cultural context). Cross-cultural or global marketing segmentation: As the world has gotten smaller and smaller, a true global marketplace has developed. For example, as you read this you may be sitting on an IKEA chair or sofa (Sweden), drinking Earl Grey tea (England), wearing a Swatch watch (Switzerland), Nike sneakers (China), a Polo golf shirt (Mexico), and Dockers pants (Dominican Republic).

10. THINKERS ACHIEVERS EXPERIENCERS STRIVERS MAKERS BELIEVERS INNOVATORS High Resources High Innovation Primary Motivation Self-Expression Ideals Achievement SUMMARY DIAGRAM OF SRI VALSTM SEGMENTS Low Resources Low Innovation SURVIVORS

11. A BRIEF DESCRIPTION OF THE EIGHT VALSTM NEW EDITION SEGMENTS INNOVATORS Innovators are successful, sophisticated, take-charge people with high self-esteem. Because they have such abundant resources, they exhibit all three primary motivations in varying degrees. They are change leaders and are the most receptive to new ideas and technologies. Their purchases reflect cultivated tastes for upscale, niche products and services. THINKERS: Motivated by ideals; high resources Thinkers are mature, satisfied, comfortable, and reflective. They tend to be well educated and actively seek out information in the decision-making process. They favor durability, functionality, and value in products. BELIEVERS: Motivated by ideals; low resources Believers are strongly traditional and respect rules and authority. Because they are fundamentally conservative, they are slow to change and technology averse. They choose familiar products and established brands. ACHIEVERS: Motivated by achievement; high resources Achievers have goal-oriented lifestyles that center on family and career. They avoid situations that encourage a high degree of stimulation or change. They prefer premium products that demonstrate success to their peers.

12. A BRIEF DESCRIPTION OF THE EIGHT VALSTM NEW EDITION SEGMENTS/Cont…….. STRIVERS Motivated by achievement; low resources Strivers are trendy and fun loving. They have little discretionary income and tend to have narrow interests. They favor stylish products that emulate the purchases of people with greater material wealth. EXPERIENCERS Motivated by self-expression; high resources Experiencers appreciate the unconventional. They are active and impulsive, seeking stimulation from the new, offbeat, and risky. They spend a comparatively high proportion of their income on fashion, socializing, and entertainment. MAKERS Motivated by self-expression; low resources Makers value practicality and self-sufficiency. They choose hands-on constructive activities and spend leisure time with family and close friends. Because they prefer value to luxury, they buy basic products. SURVIVORS Survivors lead narrowly focused lives. Because they have the fewest resources, they do not exhibit a primary motivation and often feel powerless. They are primarily concerned about safety and security, so they tend to be brand loyal and buy discounted merchandise.