� MARKET SEGMENTATION

Dr.S.Balamurugan,Ph.D

Head and Associate Professor,

PG and Research Department of Commerce,

C.P.A College, Bodinyakanur

Points to Ponder

• Pay for 3 pieces of ‘Liril’ and get the 4^th free !!!
• Buy one ‘Harpic’ and get an ‘Odonil’ free !!!
• Exchange your Maruti Alto for a Maruti Swift at a Rs 40,000/= discount !!!
• Buy ‘Fast Track’ watches and get 5 different colored wrist-bands free !!!
• New LG Television with unique ‘Child Lock’ feature !!!

Why are such offers given to consumers??

​

2

Some more examples…..

• ‘Dar ke aage jeet hai’ ….. Mountain Dew
• ‘Pappu Pass ho gaya’ ….. Cadbury’s
• ‘We also make steel’ …… Tata Steel
• ‘Filmi sitaron ka saundarya sabun’ …….. Lux
• ‘Jaago India Jaago’ …….. Tata Tea
• ‘Desh ki Dhadkan’ ……… Hero Honda
• ‘An Idea can change your life’ ……. Idea

How do such slogans impact consumers??

​

3

Consumer Behaviour……..what is it?

All such activities done by a consumer, while obtaining , consuming and disposing of products and services. This includes the decision making processes that precede and follow such actions.

4

Subject draws its concepts from:

• Psychology
• Sociology
• Anthropology
• Economics
• Marketing

​

5

Why study Consumer Behavior?

• Consumers ‘evolve’ with time, learning, exposure and experience. They cannot be taken for granted.

e.g. People booked their railway tickets from the station counters, now they prefer online purchase thru website.

​

• As a consequence, a sound understanding of consumer behavior is a pre-requisite for sustained success of any marketing program

6

7

The study of Consumer Behaviour covers:

1. Consumers in the Market Place.

2. Consumers as individuals.

3. Consumers as decision makers.

4. Consumers and subcultures.

5. Consumers and cultures.

8

Marketing decisions

• Market Segmentation: Process of dividing the market into distinct subsets of consumers with common needs and characteristics and selecting one or more segments to target with distinct marketing mix. E.g. Bathing soap, detergents, shampoos etc.
• Segment Marketing: Serving needs of a particular group; different marketing mix for different segments. e.g. Vegetarian recipes by Haldiram.
• Niche Marketing: Marketing to a single group, tailoring the mix to their specific needs and attract them, allowing the firm to engage in relationship marketing. e.g. Nutralite bread spread, Diet Coke, Sugar – free etc.
• Differentiated Marketing: organizations sell multiple versions of a product; each appealing to different market segment. Differentiated strategy can produce greater sales. e.g. Pepsi in 300ml as well as 2 litres.
• Individual Marketing: tailoring market mix to suit individual customers and create value for each individual. e.g. Designer clothes by Ritu Kumar, Manish Malhotra.

9

Segment Bounding

• Means by which marketers differentiate among consumers and market segments.

​

10

Demographic Segmentation

• Age: Johnson’s Baby Soap is targeted at kids between 0-5 years. NIIT ads target young adults in age group of 17-22 years.
• Gender: Obvious for products which are gender specific. e.g. Shaving Creams, Fairness Creams etc. However, changing roles are seen in other ads like detergents etc. (Ariel, Fair & Handsome etc)
• Marital Status: impact on consumption. Investments after marriage. e.g. Elle-18 depicts freedom as a spinster.
• Household type: Type and size of household matters. Kelloggs shows young household (couple with small kids)
• Education: Rational ads to educated, more emotional appeal to others.
• Income: Nescafe depicts sophistication, style (higher income), Bru a middle class household. Ability to pay. Fluence car for high income group.
• Occupation: employment data to design product positioning. Surf excel for field jobs (journalist ad)

​

11

Geographic Segmentation

• Clues on likely purchase behavior. Identifies segments based on geographical boundaries. People in a same area share similar needs. Regional differences are accounted for by climate, culture, religion, concentration etc. e.g. Coastal cities with heavy rainfall for K C Pal Umbrellas,
• Difference in needs among rural, urban and suburban areas. e.g. Eveready Torch for rural areas, emergency lights for sub-urban areas, CFL for Urban metros.
• Indian zones- viz. North, South, East and West greatly differs in their culture, food habits, TV viewing patterns, social customs etc; hence affecting their purchasing patterns. e.g. Regional TV Channels with regional programmes.
• Feasible for marketer to concentrate efforts and resources and fully utilize the available services.

12

Psychographic/ Psychological Segmentation

Refers to inner/ intrinsic qualities of an individual.

• Motivation: Understand ‘why’ of consumer’s buying pattern. e.g. Why did ready to eat food items fail in India?
• Desired Benefits: need and benefits various segments seek from the product. e.g. SX 4 - S1: for convenience & comfort , S2: status symbol
• Attitude: attitude towards brands give rise to distinct segments. (negatives, functionalists, fun lovers etc. e.g. the ‘my can’ pack of Pepsi, Mountain Dew etc.
• Lifestyle: predict buyer behavior on the basis of attitude, interests and opinions (VALS 2)… Colgate for trust and traditions.
• Personality: one’s personality determines the kind of product and the image thus associated. UCB- young and easy attitude, Reid & Tailor- corporate image.
• Brand Loyalty: measure of customer attachment to a particular brand. They prefer a particular product irrespective of thick and thin.
• Behavior: emotional and cognitive process going on inside a consumer’s head, lead to many problems. Segmenting the market based on specific behavior patterns and product use. E.g. while travelling in a train most people buy magazines who otherwise do not buy.

​

13

Socio-Cultural Segmentation

• Family Life Cycle: All families pass through phases of formation, growth and dissolution. At each stage, requirements vary and hence becomes an important segment to be captured. (Maruti 800 ads in year 2000-01)

​

• Social Class: relative status and social standing is important to consumers. It is a function of income, education and occupation. Knowledge of buying patterns, behavior etc. is important to appeal to different segments. (Raymond)

​

• Culture, Cross Culture & Sub culture: segmenting the domestic and international markets on the basis of cultural heritage as members of the same culture share same values, beliefs and customs. Within the larger culture distinct subgroups and subcultures are united by certain experiences, values or beliefs and make effective segments. Culturally different segments. (Health conscious Indian urban upper middle class-LG)

14

Purchase Segmentation

• Usage rate: segmenting based on the rate of product usage. Division of market into heavy, moderate and light users and planning the marketing mix differently for each. e.g. ‘Frequent Flyer’ scheme of airlines

​

• Loyalty status: consistency with which consumers continue to buy same brand of a particular product and show their commitment. e.g. ‘Loyality Cards’ offered by retail stores.

​

• User status: whether consumers have used the product in past, use it currently or are likely to use the same in future. Different mix could be needed for each category. e.g. Upgrade your Godrej Refrigerator, return the old one and buy a frost-free one.