The Concept of Segmentation for Marketing York University (Introduction to Marketing Courses)

THE CONCEPT OF SEGMENTATION

- In our complex society, everyone has different needs and priorities in products

- Understanding these needs is complex because technological and cultural advances

- Market fragmentation: occurs when peoples diverse interests and backgrounds have divided them into different groups with distinct needs and wants

o Ex. Sports shoes went from being divided into athletic and non-athletic to all sorts of different athletic needs (jogging, basketball, soccer ... skateboarders  vans, airwalk, DC)

- Target marketing strategy: instead of trying the sell the same thing to all customers they divide the total market into different segments based on customer characteristics, select one or more segment, and develop products particular to that segment

- Five step process :

1. Select markets:

 Define your market

 Understand customers’ needs and wants, benefits and features sought, purchase and consumption behaviour

2. Market segmentation

 Identify groups: geographic, behavioural, psychographic and demographic segmentation

 Describe and profile the groups: who, what, when, where, why

3. Market targeting

 Evaluate segment attractiveness: size growth, strategic fit, competitive/comparative advantage, level of competition/defendability

 Decide which ones to target

4. Market positioning

 How to compete, be differentiated, and be known for value creation

5. Create and execute marketing mix programs

- Segmentation: dividing a larger market into subgroups with fairly homogeneous needs and wants that and between groups would have very different N&W and would find different products and marketing programs appealing

o Key groups are chosen (target), decisions on how they want to brand they product (positioning), and design marketing programs with products that uniquely appeal to target

Selecting and Segmenting a Market

- Challenge of a market strategy is knowing what market you’re in and which u should be segmenting

o...