SEGMENTATION

SEGMENTATION

  • Geographic Segmentation

    • Marketers collect and analyse information according to the physical location of their customers

    • Focusing on a certain area → if u sell winter clothes, focus on places which are colder

  • Demographic Segmentation

    • Population characteristics of their customers

    • Age, gender, income level → sell clothes → diff styles or designs for teens compared to adults

  • Psychographic Segmentation

    • Personalities, values, opinions, attitudes, interests and lifestyles

    • What they think and feel

    • How people spend their time, their hobbies, what they belief in → sports car → targets people who values status, excitement, likes cars, racing

  • Behavioural Segmentation 

    • Uses and responses to product and services

    • How often they buy, what they buy, how much they spent

    • Occasions, Benefits sought, Usage rate, User status

    • Online clothing store → give discounts for people who havent purchased from them in awhile

Evaluating Market Segments

  • Segment size and growth

    • Most companies target the largest, fastest and most profitable segment however it is not always the most attractive as heavy resources may be required.

    • Size → kinda like the amount of people? So like the more people, the greater audience u can have and you may have a greater demand

    • Growth → how much the number of people increase → so is like how fast the number of ur target audience grows

  • Segment structural attractiveness

    • About the competitiveness and factors that affects the profitability

    • Are there strong, aggressive competitors, close substitute products?

    • Powerful suppliers that affects my bargaining power?

    • Bargaining power of the customers?

    • Easy for new competitors to enter the market?

    • A segment with low competition, high barriers to entry, and low buyer and supplier power is generally more attractive.

    • Analysis for the market of luxury smartphones

    • Competition: While there are competitors in this segment (e.g., OnePlus, Google Pixel), the market is dominated by a few major players with strong brand recognition.

    • Threat of new entrants: High research and development costs, strong brand loyalty, and distribution challenges make it difficult for new players to enter this segment.

    • Threat of new entrants: Relatively low, as consumers often have strong brand preferences and are willing to pay premium prices.

    • Bargaining power of suppliers: Moderate, as key components like high-quality displays and processors are essential, but there are multiple suppliers.

    • Threat of substitute products: Relatively low, as there are no direct substitutes for luxury smartphones

  • Company’s objectives and resources

    • Does company have skills and resources to succeed in the segment?

    • Does going after a certain segment match company’s long term objectives?

    • Objectives → what the companies aim to achieve

    • Resources → assets that a company can use to achieve its objectives

    • For example, a company aiming to increase market share (objective) might invest in advertising (resource) to reach a wider audience.


TARGETING STRATEGIES

  • Undifferentiated (Mass) Marketing

    • attempts to go for the whole market

    • Ignores segment differences and assumes market tastes are similar

    • Targets the whole market with one offer (mass marketing)

    • Through mass production, mass distribution & mass promotion to reach customers with the same products

    • To achieve economies of scale resulting in Potential savings on production/marketing costs

    • Essentially is jst trying to reach a large amount of people with the same thing

    • Coca-cola → have billboards, ads all on the same product → assumes that everyone likes soda and wiling to drink coca cola

  • Differentiated (Segmented) Marketing

    • Targets several market segments: You identify different groups of customers with different needs or preferences.

    • By designing a separate marketing mix for each segment: You create unique strategies for each group, including different products, pricing, promotions, and distribution channels.

    • Identifying distinctive difference across market segments: You understand what makes each group unique and cater to their specific needs.

    • Involves higher cost/investment compared to undifferentiated marketing: Creating different marketing strategies for each group requires more resources and money.

    • May lead to potential cannibalisation (of own market share): Sometimes, products designed for one segment might attract customers from another segment, reducing sales in that segment.

    • Car manufacturers

      • Luxury → people who want premium features, want status

      • Family → people who wants space, safety etc

      • Sports car → young, performance orientated individuals

    • Dfghj

  • Concentrated (Niche) Marketing

    • Targets a large share in 1 or 2 segments

    • Strong presence → be the go to brand in that segment

    • Understand the wants and needs of the segment better than anyone else

    • Good for business with limited resources as you can pour everything into focusing one that one segment

    • Strong positioning is crucial

    • Helps small firms compete with bigger firms

    • An example is a bakery selling gluten-free baked goods → targets people who cannot take gluten or are sensitive to it

  • Micro marketing

    • Sees the individual in every customer rather than see a customer in every indivudal

    • Knowing your customers: Businesses collect information about you to learn what you like and dislike. 

    • Personalized offers: They use that information to suggest things you might be interested in.

    • Building relationships: By offering things you want, businesses hope you'll become a loyal customer.

    • Amazon → tracks ur purchases (getting info about u), personalised recommendations (Based on prev purchased), targetted offers (gives u promo or discounts on times that you might be interested in)