Market Segmentation Strategies

Market Segmentation

• Dividing a market into smaller segments with distinct needs, characteristics, or behaviors to require separate marketing strategies or mixes.
• Types of market segmentation: segmenting consumer markets, segmenting business markets, and segmenting international markets.

Requirements for Effective Segmentation

• Not specified in the text, but generally includes factors such as measurability, accessibility, and profitability.

Types of Segmentation

Demographic Segmentation

• Divides the market into segments based on variables such as:
  • Age
  • Life-cycle stage
  • Gender
  • Income
  • Occupation
  • Education
  • Religion
  • Ethnicity
  • Generation

Psychographic Segmentation

• Divides a market into different segments based on:
  • Social class
  • Lifestyle
  • Personality characteristics

Behavioral Segmentation

• Divides a market into segments based on:
  • Consumer knowledge
  • Attitudes
  • Uses of a product
  • Responses to a product

Intermarket Segmentation

• Forms segments of consumers who have similar needs and buying behaviors, even though they are located in different countries.

Target Market

• A set of buyers who share common needs or characteristics that the company decides to serve.

Marketing Strategies

Differentiated Marketing

• Targets several different market segments and designs separate offers for each.

Concentrated Marketing

• Targets a large share of a smaller market.

Micromarketing

• The practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations.

Product Positioning

• The way the product is defined by consumers on important attributes.

Competitive Advantage

• An advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices.

Value Proposition

• The full mix of benefits upon which a brand is positioned.