Market Segmentation: Art or Science?
THE IBC STRATEGY: PART III
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Market Segmentation: Art or Science?
NIKE
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Market Segmentation: Art or Science?
Definition
• Market Segmentation:
– Dividing a market into distinct groups with
distinct needs, characteristics, or behavior who
might require separate products or marketing
mixes.
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Market Segmentation: Art or Science?
Know Your Market
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What information do you need to reach your
prospects successfully?
Do you understand their problems?
Have you thought about what you want
people to think and feel about your brand?
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Market Segmentation: Art or Science?
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Market Segmentation:
Artaor Science?
Developing
Market Segmentation Strategy
1
Define Product Market
2
Determine Bases for Segmentation
3
Describe Segments
4
Evaluate Potential Success
5
Select Target Markets
6
Determine Marketing Mix Strategies
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Market Segmentation: Art or Science?
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Market Segmentation: Art or Science?
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Market Segmentation: Art or Science?
Target Information
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Household income
Spending
Marrieds
Birthrate
Aging
Women
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Men
Single-Person
Households
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Market Segmentation: Art or Science?
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Market Segmentation: Art or Science?
• Segmenting Consumer
Markets
• Geographical segmentation
– Marketing mixes are
customized geographically
• Demographic segmentation
– Most popular segmentation
– Demographics are closely
related to needs, wants and
usage rates
• Psychographic segmentation
– Lifestyle, social class, and
personality-based
segmentation
• Behavioral segmentation
– Typically done first
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Market Segmentation: Art or Science?
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Market Segmentation: Art or Science?
• Requirements for
Effective Segmentation
• Measurable
– Size, purchasing power,
and profile of segment
• Accessible
– Can be reached and
served
• Substantial
– Large and profitable
enough to serve
• Differentiable
– Respond differently
• Actionable
– Effective programs can
be developed
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Market Segmentation: Art or Science?
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Market Segmentation: Art or Science?
Bases for
Segmentation
Needs
Profilers
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Market Segmentation: Art or Science?
Advertising & Promotion for BBA2K7
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Market Segmentation: Art or Science?
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Market Segmentation: Art or Science?
Elements of Lifestyle
ACTIVITIES
INTERESTS
Work
Family
Hobbies
Home
Social Events
Job
Vacation
Community
Entertainment
Recreation
Club Membership
Fashion
Community
Food
Shopping
Media
Sports
Achievements
OPINIONS
DEMOGRAPHICS
Themselves
Age
Social Issues
Education
Politics
Income
Business
Occupation
Economics
Family Size
Education
Dwelling
Products
Geography
Future
City Size
Culture
Stage in Life Cycle
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Market Segmentation: Art or Science?
Kellogg’s Special K
SEGMENT
DEMOGRAPHICS
BEHAVIOURISTICS
PSYCHOGRAPHICS
COMPANY'S BRANDS
NEEDS/ BENEFITS
Flavour
COMPETITORS'
BRANDS
Age: 20-30 yrs-old Medium-to-Heavy Users Fun seekers, adventurous,
energetic, peer pressure
Original Special K,
Kellogg's other brands,
Red Berry Special K
Weetabix, Nestle, Alpen, etc.
group member
Nutrition Value, Age: 31-44 yrs-old,
Heavy Users
Self-Confident, alert
Original Special K,
Kellogg's other brands,
Quality
45-54 yrs old
Medium-to-Heavy Users
to change, ambitious
Special K Plus
Fruitbix, Organic Crunch,
Convenience
Working men and
Heavy Users
Authoritarian, ambitious,
Original Special K,
Multi Flakes, Shredded Wheat.
independent, health
Special K Plus
Kellogg's other brands,
w omen
conscious
Fruitbix, Organic Crunch,
Multi Flakes, Shredded Wheat.
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Market Segmentation: Art or Science?
Laptops
BENEFIT
Functionality
You Can Use
ACTIVITIES
INTERESTS
OPINIONS
Student;
Sports,
Peer Pressure,
Adventurous, Entertainment,
Education,
Energetic
Fashion
Culture
Value and
Self-made
Home,
Ambitious,
Convenience Businessman; Community,
Adventurous,
Better-Off,
Personal
Planned
Independent
Acievements,
Purchasing,
Recreation,
Strong Views
Business
about Products,
Politics, Future
Business and
Social Issues
Powerful and
Successful
Home, Job,
Ambitious,
Light
Professional;
Fashion,
Energetic,
Better-Off,
Community,
Planned
Independent
Recreation,
Purchasing,
Personal
Strong Views
Acievements, about Products,
Entertainment Politics, Future
Business and
Social Issues
Flexibility to
Frequent
Job, Fashion,
Authoritarian,
Perform
Travellers;
Home,
Strong Views
Businessmen, Community,
about Products,
Executives,
Recreation,
Politics, Future
Better-Off,
Personal
Business and
Independent Achievements, Social Issues
Food,
Entertainment
DEMOGRAPHICS
Age: 20-30 yrs-old.
FLC: Single;
Light-to-Medium Users
Age: 26-50 yrs old.
FLC: Single, Newly
Married, Full Nest I, II &
III,
Medium-to-Heavy Users
Age: 27-43 yrs-old.
FLC: Single, Newly
Married, Full Nest I, II &
III,
Heavy Users
Age: 29-55 yrs-old.
FLC: Single, Newly
Married, Full Nest I, II &
III.
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Market Segmentation: Art or Science?
ASIAN PAINTS
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Market Segmentation: Art or Science?
Target Generations
Good warriors (1909-1928)
Matures (1929-1945)
Baby boomers (1946-1964)
Gen Xers (1965-1982)
Gen Yers (1983-2001)
Generation Zers (2002+)
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Market Segmentation: Art or Science?
Planning the Advertising
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Market segmentation is the division of an
entire market of consumers into groups
whose similarity makes them a market for
products serving their special needs.
A situation analysis is the part of the
advertising plan that answers the
questions: Where are we today and how
did we get here?
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Market Segmentation: Art or Science?
Steps in the
Market Segmentation Process
Segment your market
Target a segment
Position your product
Communicate your positioning
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