Module 3

Market segmentation
Market segment is simply a group of present or

potential customers with some coman characteristic, which is relevant in explaining their response to a suppliers marketing stimuli.

Procedure followed for market segmentation

Marketing research
Analysis profiling

Criteria used for selection of segmentation variables

Measurable:- sales potential, quantity of product

required by customers Differentiable:-should respond differently to separate plans and strategy. Substantial:- segments should be large enough in terms of sales potential and profits.

Identifying the variables used for segmenting

Demographic variables
Psychographic Behavioral

Geographic

Industrial market segmentation

Macro variables
Micro variables

Macro variables
Macro segmentation approach consist of identifying

the macro-variables on the basis of industry characteristics or organizational characteristic. Such as type,size,geographic location or product application. The information on macro-variables can be obtained through secondary sources of information such as trade directories, business magazines.

 Industry characteristic:-industries market their

products or services through different types of industries. Industries are classified by Standard industries classification. Industry type.service,textile,chemical

 Organizational characteristic: Size:- larger the organizations have different

purchasing requirement. Location:-geographical location of the customer is an important factor in serving the need of on time delivery.

Micro variables
Micro segments are homogenous groups of customers

within the macro-segments. Industrial market sub divide macro-segments into micro-segments.

Micro variables segmentation

Buy phases customer interaction needs
Organizational capabilities financial, technical or

operational. Purchasing policies Personal characteristics

Target marketing

Evaluating market segments

Size and growth
1. 2.

3.
4. 5.

Time- series analysis Regression analysis Econometric models Sales force estimates Expert opinion

 A time series is a chronological sequence of

observations on a particular variable. Usually the observations are taken at regular intervals (days, months, years), but the sampling could be irregular.

 A regression is a statistical analysis assessing the

association between two variables. It is used to find the relationship between two variables.

Econometric models
An econometric model is one of the tools economists

use to forecast future developments in the economy. In the simplest terms, econometricians measure past relationships among such variables as consumer spending, household income, tax rates, INTEREST RATES, employment, and the like, and then try to forecast how changes in some variables will affect the future course of others.

Profitability analysis
Market potential
Sales forecast profitability

 Competitive analysis
Company objective and resources

Target market strategies.

Concentrated marketing.
Differentiated marketing Undifferentiated marketing

Concentrated marketing
Is a market segmentation and market coverage strategy

whereby a product is developed and marketed for a very well-defined, specific segment of the consumer population.

Differentiated marketing
The division of a heterogeneous market into relatively

homogeneous segments so that the needs and wants of the segments may be served more effectively

Undifferentiated marketing
market coverage strategy whereby a company ignores

differences within a market and attempts to appeal to the whole market with a single basic product line and marketing strategy. Undifferentiated marketing relies on mass distribution and mass advertising, aiming to give the product a superior image in the minds of consumers. It is cost effective because there is only one product line to be produced, inventoried, distributed, and advertised.

niche marketing
A niche market refers to that small segment of the

overall market base which if targeted in a focused manner results in higher yields rather than focusing entire market segment. It is useful way to draw customer attention.