1. Marketing
segmentation
Segmenting Consumer Markets
By Maya Humbatova
12.03.2010

2. Outline
 Define Marketing
Segmentation
 Levels of Marketing
Segmentation
 Segmenting Consumer
Markets

3. Mass Marketing vs. Target
Marketing
 Mass Marketing is when
almost the same product
is used for promotion and
distribution for all
customers
 Target Marketing is a
practice to identify and
segment the market and
develop products and
marketing mixes for each
segment or group of
customers

4. Marketing Segmentation
 Marketing
Segmentation is:
* A process of dividing the
market into distinct
groups of customers
according to their
needs, characteristics,
or behaviors
* A compromise between
mass marketing and
target marketing

5. Marketing Segmentation

Market Segmentation Market Targeting Market Positioning

 1. Identify bases for 3. Develop Measures 5. Develop positioning
segmenting the market of segment or each target segment
attractiveness
2. Develop profiles of 4. Select the target 6. Develop marketing mix
resulting segments segment(s) for each target segment

6. Goals of Segmentation
The two main goals that any segmentation methodology should be able to
address are:
 1) At a strategic level, segmentation should be able to help an
organization rapidly evaluate new business opportunities
Geographical expansion: Should the retail chain expand to north east?
Product expansion: Should the electronic manufacturer launch a
smartphone?
 2) At an operational level segmentation should yield information to help
craft successful marketing offers for specific prospects.
Product: What product features are must haves vs. nice to haves?
Price: What is the price point that customers are willing to pay?
Communication: How to message to the target customers?
Distribution: Where do the target customers live?

7. Levels of Market Segmentation
 Mass Marketing
 Segmenting Markets
 Niche Marketing
 Micromarketing
No Segmentation Complete Segmentation
Mass Marketing Segmenting Markets Niche Marketing Micromarketing

8. Mass Marketing
 Traditional marketing
strategy that uses no
segmentation
strategies, and uses the
same product,
promotion, and
distribution to reach a
wide audience (whole
market)
 Promotes the concept
“One Size Fits All”

9. Problems with Mass Marketing
 Low production cost
->lower prices -> higher
margins
 Nevertheless, it is hard
to appeal to all diverse
groups, more
competitors, and
proliferation of mass
media has made it hard
to further practice “one
size fits all” approach

10. Segmenting Markets
 Companies that are segmenting markets realize the diversity
of the needs, perceptions, and buyer behavior between the
customers
 So that they match the needs of the customer’s more
efficiently, improve and promote products for a distinct
segment of the market
 A good segmenting approach will eliminate the competitors

11. Niche Marketing
 Niche Marketers focus
on the subgroups within
the segments of the
market, seeking to find
customers with a
distinctive set of traits
looking for the same
combination of benefits

12. Niche Marketing

13. Micromarketing
 A form of target marketing in which
companies fit their marketing mixes to
specific needs and wants of narrowly defined
geographic, demographic, psychographic or
behavioral segments

14. Segmenting Consumer
Markets

15. Geographic Segmentation
 Geographic segmentation divides the market
into different geographical units: nations,
states, regions, countries, cities, or
neighborhoods

16. Demographic Segmentation
Divides the market based on variables:
 Age
 Ethnicity
 Life-cycle
 Gender
 Income

17. Demographic Segmentation.
Lifestyle groups
 Yuppie Associations
 Mobile
 High valued house/flat
 Good Salary
 Young branded car
 Third Agers
Associations
 50's
 Retired early from
profession.
 Time to spare
 Adventure Seekers

18. Socio- demographic
Segmentation

19. Socio – Demographic
Case Study. T-Mobile

20. Geodemographics
 Geodemographics studies the relationship
between the geographical locations and
demographics

21. Psychographic Segmentation
 Divides the customers based on:
 Social Class
 Lifestyle
 Personality
SAGA segmentation of
UK grandparents

22. Psychographic Segmentation
Case Study. Adidas vs. Converse

23. Behavioral Segmentation
 Divides the market into segments based on
buyers’ knowledge, attitude, uses, responses
to the product
 Occasions
 Benefits Sought
 Usage rate
 Loyalty status
 Buyer Readiness Stage
 Attitude towards the product

24. Market Segmentation
NIVEA Sun Case Study
 NIVEA sun products – sun care
 Segmentation Geographically: targeted at different
climates and to users with different skin types
 Demographic Segmentation: men/women and adults
with children. There is a stark contrast between
awareness and usage of sun care products between
men (who prefer convenience) and women (who enjoy
more luxurious sun care products)
 Usage occasion (when) - e.g. holiday, outdoor sports,
gardening, working etc. NIVEA provides a variety of
SPF's for differing needs and occasions
 Benefit sought - convenience is important to men (so
they choose spray applicators). Parents want to
provide maximum protection for children (high SPFs
and coloured products are therefore important)

25. NIVEA sun segmentation
Attitudinal 5 distinct groups for protection and
after sun:

26. Segmentation using e-mail
metrics
 Segmentation strategy
with the usage of email
advertising, or
promotion

27. Bibliography
Constantinou, Andreas. “Operators: service-pipes or bit-pipes ?” November 8,
2006. Retrieved March 15, 2010.
<http://www.visionmobile.com/blog/2006/11/operators-service-pipes-or-bit-
pipes/>.
Jennings, Jeanne. “Really Simple E-mail Segmentation: Reengaging Inactives.”
July 14, 2008. Retrieved March 16, 2010. <http://www.clickz.com/3630202>.
“Market Segmentation”. Learn Marketing. Retrieved March 15, 2010.
<http://www.learnmarketing.net/segmentation2.htm>.
“Market Segmentation – Introduction.” Inclusive design toolkit. 2007-2008.
Retrieved March 16, 2010. <http://www-
edc.eng.cam.ac.uk/betterdesign/knowledge/catusers/catusers2.html>.
“NIVEA sun segmentation”. The Times 100. 2010. Retrieved March 17, 2010.
<http://www.thetimes100.co.uk/case-study--segmentation--87-232-1.php>.
Kotler, Philip. Principles of Marketing. Third European Edition 2002.

29. Thanks For Your
Attention!