Market Segmentation — Methods, Requirements & Levels: Study Pack Flashcards

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Geographic Segmentation

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Division of the market by physical location such as nations, states, regions, and cities. It helps tailor products and distribution to local needs and leverages statistical regions for planning.

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Demographic Segmentation

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Grouping consumers by measurable traits like age, gender, income, and family life cycle. It is widely used because demographics often correlate with preferences and purchasing power.

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Psychographic Segmentation

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Segments based on personality, lifestyle, and values to understand how consumers live and what interests them. Brands match positioning to consumer identities and life-styles for deeper relevance.

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Behavioural Segmentation

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Dividing buyers by their interactions with a product: purchase occasions, readiness to buy, user status, usage rate, and loyalty. It directly links segmentation to actual buying behaviour and usage patterns.

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Benefit Segmentation

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Grouping consumers based on the specific benefits they seek from a product, identified through consumer interviews. Benefits can be generic (primary) or evolved (secondary) and drive product positioning.

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Marketing-factor Segmentation

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Segmentation based on buyers' responsiveness to marketing activities such as price, quality, advertising, and promotions. It helps design tactics tailored to groups that react differently to marketing levers.

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Market Segmentation

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The process of dividing a heterogeneous market into several homogeneous submarkets or segments, each sharing one or more common characteristics. It enables focused marketing strategies for each group.

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Substantiality

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A requirement that a segment be large and profitable enough to justify a separate marketing mix. Very small segments may not be economically viable for targeted offerings.

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Measurability

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The ability to quantify the size and characteristics of a segment so marketers can measure behaviour and market potential. Accurate measurement is essential for planning and evaluating segmentation.

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Accessibility

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The extent to which a segment can be reached via distribution, media, and sales channels. If a segment cannot be reached, the segmentation is of little practical use.

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Representability

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Segments must be identifiable and have their own characteristics so they can be targeted distinctly. Representable segments allow firms to create tailored marketing mixes and measure outcomes.

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Responsiveness

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Segments should respond differently to marketing stimuli; if they respond similarly, separate mixes aren't needed. This ensures segmentation leads to different and effective marketing actions.

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Levels of Segmentation

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Classification of targeting strategies by intensity: **Undifferentiated, Differentiated,** and **Concentrated** marketing. Choice depends on product standardization, market diversity, and company resources.

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Undifferentiated Marketing

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A mass-market approach using a single product and marketing mix for all consumers. It suits standardized products and aims for economies of scale but ignores segment differences.

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Differentiated Marketing

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Targeting several market segments with distinct marketing programmes for each segment. It provides consumer choice and closer fit but increases marketing complexity and costs.

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Concentrated Marketing

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Focusing the firm's resources on one or a few niche segments with a tailored marketing plan. This specialization helps smaller firms gain strong positions in selected segments.

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Mass Marketing

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Selling a single product to the whole market with minimal differentiation, often to achieve low unit costs. It is viable when product needs are homogeneous and distribution is broad.