Segmenting consumer markets Divide the market to understand its structure is not possible only in single way. Some times a single varia...
Segmenting consumer markets
Divide the market to understand its structure is not possible only in single way. Some times a single variable is enough to divide the market. But usually to serve this purpose marketers have to use different variables in combination
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| Segmentation |
Geographic Segmentation
Division of market based on location structure. These geographical locations may include nations, states, regions, counties, cities, or even neighborhoods. The strategy behind this division is to localizing the products, advertising, promotion, and sales efforts to fit the needs of individual regions, cities, and even neighborhoods
Demographic segmentation
Demographic segmentation divides the market into segments based on the characteristics of targeted population. The variables may include age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality.
Mostly it primarily provides the basis for any type of segmentation. Marketers may define segments using other bases, such as benefits sought or behavior but they must know a segment’s demographic characteristics to assess the size of the target market and reach it efficiently.
The popularity of demographic segmentation
The one of the two reasons reasons of the popularity of this type of segmentation is that consumer needs, wants, and usage rates often vary closely with demographic variables. The second is that demographic variables are easier to measure than most other types of variables.Age and Life-Cycle Stage.
The philosophy behind this type of division is that consumer needs and wants change with age.
This type of segmentation may lead the marketer towards stereotypes. A stereotype is a thought that may be adopted about specific types of individuals or certain ways of doing things, but that belief may or may not accurately reflect reality .Like some 40-year-old couples are sending their children off to college, others are just beginning new families.
Gender.
Gender segmentation has long been used in clothing, cosmetics, toiletries, and magazines.
Income.
The marketers of products and services such as automobiles, clothing, cosmetics, financial services, grocery stores and travel have long used income segmentation.
The recent troubled economy has provided challenges for marketers targeting all income groups. Consumers at all income levels—including affluent (Having a great deal of money) consumers—are cutting back on their spending and seeking greater value from their purchases. In many cases, luxury marketers targeting high-income consumers have been hardest hit. Even consumers who can still afford to buy luxuries appear to be pushing the pause button. “It’s conspicuous non consumption,” says one economist. “The wealthy still have the wealth, [but] it’s the image you project in a bad economy of driving a nice car when your friends or colleagues may be losing their businesses.”
Psychographic segmentation
Psychographic segmentation is the segmentation based on the living standards of an individual. The most important variables to be used in this type of segmentation are social class, life style and personality traits. It should not be confused with demographic segmentation as people from same age group can have different psychographic segment.
Behavioral segmentation
Behavioral segmentation is to divide the buyers into segments based on their responses to a product. The responses of the customers are based on their knowledge and attitude. It is believed to be the best starting point for building market segments.
Occasions
Buyers can be grouped according to occasions when they get the idea to buy, actually make their purchase, or use the purchased item. Occasion segmentation can help firms build up product usage. For example, some holidays, such as Mother’s Day and Father’s Day, were originally promoted partly to increase the sale of candy, flowers, cards, and other gifts. And many marketers prepare special offers and ads for holiday occasions.
Benefits Sought.
It is to group buyers according to the different benefits that they seek from a product.
For example athletic wear buyers may be divided into the following segments according to the benefits seek by different customers “Fit and Polish” consumers seek a balance between function and style—they exercise for results but want to look good doing it. “Serious Sports Competitors” exercise heavily and live in and love their active wear—they seek performance and function. By contrast, “Value-Seeking Moms” have low sports interest and low active wear involvement—they buy for the family and seek durability and value. Thus, each segment seeks a different mix of benefits. Champion must target the benefit segment or segments that it can serve best and most profitably, using appeals that match each segment’s benefit preferences.
User Status.
Markets can be segmented into nonusers, ex-users, potential users, first-time users, and regular users of a product. Marketers want to reinforce and retain regular users, attract targeted nonusers, and reinvigorate relationships with ex-users. Included in the potential user group are consumers facing life-stage changes—such as
newlyweds and new parents—who can be turned into heavy users.
Usage Rate.
Markets can also be segmented into light, medium, and heavy product users. Heavy users are often a small percentage of the market but account for a high percentage of total consumption
Loyalty Status.
A market can also be segmented by consumer loyalty. Buyers can be divided into groups according to their degree of loyalty. Some consumers are completely loyal they buy one brand all the time. Other consumers are somewhat loyal they are loyal to two or three brands of a given product or favor one brand while sometimes buying others. Still other buyers show no loyalty to any brand they either want something different each time they buy, or they buy whatever’s on sale.
Marketers can learn a lot by analyzing loyalty patterns in its market. They should start by studying its own loyal customers. By studying them they can better pinpoint its target market and develop marketing appeals.
By studying its less-loyal buyers, the company can detect which brands are most competitive with its own.
By looking at customers who are shifting away from its brand, the company can learn about its marketing weaknesses.
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