Made by: Ms. RAVNEET BHANGU 1

Market Segmentation

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Definition

Market segmentation is the segmentation of markets into homogenous groups of customers, each of them reacting differently to promotion, communication, pricing and other variables of the marketing mix.

Market segments should be formed in that way that differences between buyers within each segment are as small as possible. Thus, every segment can be addressed with an individually targeted marketing mix.

Made by: Ms. RAVNEET BHANGU 3

REASONS??

• Better serving customers needs and wants.

• Higher Profits

• Opportunities for Growth

• Sustainable customer relationships in all phases of customer life

cycle.

• Targeted communication.

• Stimulating Innovation

• Higher Market Shares

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TYPES

Consu

mer

Markets

Industrial

/ Business Markets

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CONSUMER MARKET SEGMENTATION

• Geographic:

Land or region

Rural or metropolitan area• Demographic:

Age, sex, marital status

Income, occupation, education

Religion, nationality, ethnical group• Psychographic:

Social status

Lifestyle-type

Personal type• Behavioral:

Intensity of product use

Brand loyalty

User behaviors

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INDUSTRIAL MARKET SEGMENTATION

• Industry

• Intermediary or final consumer

• Type of corporation (public or private sector)

• Size of corporation

• Geographical location

• Intensity of product use

• Organization of purchasing function

• Centralized or decentralized

• Purchasing policies, rules and criteria

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SOCIO-ECONOMIC CLASSIFICATION

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Values and Lifestyles (VALS)

“VALS System of Psychographic Classification”

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Kotler’s 5 criteria for an effectivesegmentation:

Measurable

Accessible

Distinguishable

Feasible

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THANK YOU!