Demographic Segmentation Demographics are statistical data that describe various characteristics of a population. Geographic segmentation is useful when there are geographic locational differences in consumption patterns and preferences. Business markets can be segmented on two general bases. The market is segmented on the basis of one or more demographic variables, listed below: i. These cards give additional discounts and offers to regular customers.
Festivals — Holi, Diwali, Janmastami, and national festivals ii. The approach is that customers in organizational markets be segmented in two stages. If you have a broad customer base congregated in a local, regional, national or international location, it makes sense to invest in geographic marketing. Toward this end, businesses attempt to learn as much as they can about their customers--where they live, their age, their income levels, what they purchase, what their hobbies are and what their likes and dislikes are. So, market segmentation is beneficial for the companies serving larger markets. With these, the size and potential market of each segment can be determined, along with the positioning and the appeal that will be used to cover it.
These characteristics might include sex, age, income or geography where they live. Multisegment targeting is a strategy that uses two or more marketing mixes to target two or more market segments One-to-one marketing is an individualized marketing method that utilizes customer information to build long-term, personalized, and profitable relationships with each customer. Benefits sought in the fruit drink market are extra energy, vitamins, being natural, low calories, low price. Market can be segmented on the basis of the usage rates, like light, medium, and heavy product users. So, considering demographic factors, while defining marketing strategy, is crucial.
Successful market segmentation depends on four basic criteria: 1 a market segment must be substantial and have enough potential customers to be viable 2 a market segment must be identifiable and measurable, 3 members of a market segment must be accessible to marketing efforts, and 4 a market segment must respond to particular marketing efforts in a way that distinguishes it from other segments. Socio-Economic Variables Social class as a predictor of buyer behavior has been open to question. Demographic Variables Age — Age is used to segment many consumer markets, like food and clothing. Marketing campaigns exist in large part to move the target audience through the buyer readiness stages. A business traveler tends to be less sensitive about price and more focused on timing, location, and convenience. Income is particularly useful as a segmentation input as the price tag for a product increases.
Five bases are commonly used for segmenting consumer markets. Benefits differ as per product class or category. Segmentation of Consumer and Industrial Markets Consumer markets, organizational market segmentation may be on an indirect associative base or a direct behavioural base, and can use a variety of combined bases to obtain more precise segmentation. Benefits Here, a company divides the market as per benefits the buyers expect from the products. In families, for example, young children may be influencers in whether a parent buys Cheerios, Chex, or Fruit Loops.
Moreover, the market is also usefully segmented on the basis of personality variable. Regular or Potential Behavioural segmentation is considered most favourable segmentation tool as it uses those variables that are closely related to the product itself. When this kind of segmentation is employed, the security against stereotypes must be ensured by the marketer. Several ready-to-cook and fast food brands treat dual income families as their primary target group, based on their busy lifestyle, and the fact that the lady of the house does not have the time to cook food. Regional differences in consumer tastes for products are well known, such as the affinity for barbecue in the southern U. He proposed that consumption of a product should be measured directly to determine usage levels, and that promotion should be aimed directly at the heavy user. Companies have assumed that if they can identify individuals who are brand loyal to their brand, and then delineate other characteristics these people have in common, they will locate the ideal target market.
One reason is that consumer needs, wants, and usage rates often vary closely with the demographic variables. Heavy users are often a small percentage of the market, but account for a high percentage of the total consumption. In psychographic segmentation, the market is divided into different segments or groups on the basis of psychographic characteristics of buyers. After finding these differences, marketers need to describe the people who exhibit them. Durable Segment should not have frequent changes attribute in it. However, a question that stands after selecting the criteria to break down the market is: what methodologies are followed to build up a segment in the first place? The personalities of the products are designed in accordance with the personalities of the customers. Several retail stores have initiated the concept of loyalty cards.
Consumers with different personalities or lifestyles have varying product preferences and may respond differently to marketing mix offerings. Car companies often use benefits segmentation to target a broad market looking for different benefits, such as economy, performance, luxury or status. Age: It is one of the most common demographic variables used to segment markets. This concept of successively combining industrial market segmentation bases giving more and more precise and meaningful segments is taken further in another classic model developed by Shapiro and Bonoma. By knowing the characteristics and shopping habits of offer seekers, can be correctly targeted. Market Segmentation Market segmentation can be defined as the process of dividing a market into different homogeneous groups of consumers. This approach identifies five general segmentation bases that are arranged in the nested hierarchy shown.
A firm can focus on one more customer groups. For example, if they have to buy six times in a year, their buying pattern will be A, A,A, A, A, A. In the case of certain products, buying behaviour predominantly depends on lifestyle and personality characteristics. The stereotypical Texan, for example, is hard to find in Houston, where one-third of the population has immigrated from other states. Members of a geographic segment may be too heterogeneous to qualify as a meaningful target market. Having identified market segments, the next step in target marketing is to evaluate the attractiveness of these segments as a prelude to selecting target markets.
Also, the factors like climatic zone, state, region, constitutes geographic segmentation. Innovators are more likely to be willing to buy products soon after the launch. The objective of profiling is to identify and locate the customers so that they can be approached by marketers. Psychographic Segmentation In Psychographic Segmentation, segments are defined on the basis of social class, lifestyle and personality characteristics. These include the urgency of order fulfilment, product application and the size of order. However, there are four main bases for consumer market segmentation; they include behavioral, geographic, psychographic, and demographic segmentation. Demographic factors are the most popular bases for segmenting the consumer group.