Market segmentation consists of 'diving a market into distinct groups of buyers with different needs, characteristics or behaviour, who might require separate products or marketing mixes '. (Kotler et al, 1999)
In order to ensure that the segment will be effective it is essential that each segment has the follwing factors:
- Measureability
- Accessibility
- Sustainability
- Actionability
- Stability
Market Segmentation
A market can be segmented using the following variables:
- Geographic
- Demographic
- Psychographic
- Behavioural
Geographic-marketers need to take into consideration the differences in consumer tastes based on where the consumer is located.
Demographic-age, life-cycle, gender, income and geodemographic.
Psychographic-social class, lifestyle and personality
Behavioural-occassions, benefits sought, user status, usage rate, loyalty status and attitudes towards the product.
Market Targeting
The company should only enter segments where it can offer superior value and gain advantage over competitors. There are three market coverage strategies:
- Undifferentiated marketing-firm might decide to ignore whole market segments differences and go after the whole market with one offer.
- Differentiated marketing-firms decide to target several market segments and design separate offers for each.
- Concentrated marketing-go after a large share of one or a few submarkets.
Market Positioning
A product's position is the way the product is defined by consumer's on important attributes. A positioning strategy can be based on what is real (quality, performance, capacity, value for money and durability) or what is imaginery or image based.
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