Segmentation

Segmentation Overview

  • Purpose of Segmentation: Group customers based on similar needs, leading to focused marketing strategies.

  • Key Benefits:

    • Better focus on consumer needs.

    • More effective marketing strategies.

    • Resource allocation based on segment attractiveness.

Types of Segmentation

  • Demographic Segmentation: Age, gender, income, education, occupation, etc.

  • Psychographic Segmentation: Based on lifestyle, attitudes, and personality traits. Focus on heavy users.

  • Behavioral Segmentation: Based on user status, purchase occasion, benefits sought, usage rates, and brand loyalty.

  • Geographic Segmentation: Based on countries, regions, city sizes, etc.

Criteria for Effective Segmentation

  1. Measurable: Can be quantified.

  2. Accessible: Reachable through marketing channels.

  3. Substantial: Large enough to be profitable.

  4. Differentiable: Distinct needs and responses to marketing.

  5. Actionable: Ability to create effective strategies.

Targeting Strategies

  • Mass Marketing: Undifferentiated approach for common needs.

  • Differentiated Marketing: Targeting multiple segments with distinct offerings.

  • Niche Marketing: Focus on specific, smaller market segments.

  • Micromarketing: Identifying and targeting individual consumers or specific localities.

Positioning

  • Definition: How a brand or product is perceived in consumer's mind relative to competitors.

  • Differentiation Tactics:

    • Product differentiation (features/benefits).

    • Service differentiation (customer service).

    • Price differentiation (value vs. premium pricing).

    • Distribution differentiation (exclusive vs. widespread availability).

Customer Personas

  • Concept: Detailed profiles of target consumers that reflect personal attributes, motivations, and behaviors.

  • Usefulness: Enhances understanding of audience and aids in targeted marketing.

Positioning Strategy Using Perceptual Maps

  • Visual tool to analyze competitor positioning based on key attributes.

  • Helps identify opportunities for product development and repositioning strategies.

Bottom Line STP

  • Effective segmentation and targeting processes lead to better-defined target groups and positions in the market.