Marketing Management 3(2+1)

Lesson 10 : Market Segmentation

Market segmentation strategy

Marketers have realized that they cannot serve all customers in the same way or they cannot appeal to all of them in a market place as they vary in needs and buying behavior. So, marketers have to mould from mass marketing to target marketing identifying the target group through segmentation. Market Segment is a subgroup of people, who share singular or plural similar features which make them have similar product wants. It is a procedure which distinguishes the market into various segments that have the same need or behave in a similar pattern. Strategy has to be developed based on the segment’s requirements.

There are four steps in which the strategy which is customer oriented is to be carried out as shown below

1. Market Segmentation is defined as the process of splitting customers, or potential customers, in a market into different groups, or segments, within which the customers share a similar level of interest in the same or comparable sets of needs satisfied by a distinct marketing proposition


2. Market Targeting:
   It consists of evaluating each market segment’s attractiveness and selecting one or more market segments to enter – Philip Kotler.


3. Differentiation:
   It is a process in which a firm’s market offer is differentiated to create superior customer value.


4. Positioning:
   It is arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target customers.
   • Segmentation simplifies
     • Targeting Positioning
     • Planning process
   The two variables that split the market into segments are:
   • Needs of customers- which forms the basic criteria for segmentation
   • Profilers –which are the descriptive and measurable customer characteristics that can be used to inform segmentation exercise.