L8 : Market Segmentation.

WHY SEGMENT THE MARKET?
- to reach and respond cost effectively to group of potential buyers
- therefore to increase sales and profit.

WHAT IS SEGMENTATION :

- group potential buyers into groups
a) with common needs
b) will respond similarly to a marketing action.

A market segment consists of people who are relatively similar in their buying behaviour and needs.

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Generally market can also be broadly defined in term of

GENERIC MARKET :
consumer needs : broadly similar eg: leisure
needs satisfy by : wide range of products/service eg : concert, sport games, cruise.


PRODUCT TYPE MARKET :
consumer needs : relatively similiar : want to share holiday trip.
needs satisfy by : close subsitute of products/service : digital camera, camcorder, postcard.


MARKETING SEGMENTATION PROCESS ;

1) define a broad product market.
2) segment based on needs/similar buying behaviour
3) develop marketing mix to reach this segment.

Citeria to segment a broad product market :

a) the segment have homogenous (ie similar needs)
b) substantial - ie large enough market size/potential to be profitable (ie to develop a product for this segment.)
c) operational - the citeria used (dimension) must be useful to result in identifiable customers.

DIFFERENT DIMENSION (WAYS) TO SEGMENT MARKET.

- demographic
= age, gender, religion etc

- psychographic
= lifestyle, personality, motives etc.
= focus on the consumer

- behavioural
=usage, benefit sought etc
= focus on the product/service benefits.

- critical events.