Market segmentation is the process of dividing a market of potential customers

into groups or segments based on different characteristics important to you. The

people grouped into segments share characteristics and respond similarly to the
messages you send.

Market segmentation is a business practice that brands use to divide their target
market into smaller, more manageable groups of people based on common ground
they share to optimize their marketing, advertising, and sales efforts. Simply put,
customers of each market segment have similar characteristics that businesses can
leverage to advance their efforts.
Market Segmentation refers to the process of creation of small groups (segments) within a large market to
bring together consumers who have similar requirements, needs and interests.

Targeting
Once the marketer creates different segments within the market, he then devises various
marketing strategies and promotional schemes according to the tastes of the individuals of
particular segment. This process is called targeting. Once market segments are created, organization
then targets them.

Targeting is the second stage and is done once the markets have been segmented.

Organizations with the help of various marketing plans and schemes target their products amongst the
various segments.

Nokia offers handsets for almost all the segments. They understand their target audience well and each
of their handsets fulfils the needs and expectations of the target market.

Tata Motors launched Tata Nano especially for the lower income group.

Positioning
Positioning is the last stage in the Segmentation Targeting Positioning Cycle.

Once the organization decides on its target market, it strives hard to create an image of its product in the
minds of the consumers. The marketers create a first impression of the product in the minds of
consumers through positioning.

Positioning helps organizations to create a perception of the products in the minds of target audience.

Ray Ban and Police Sunglasses cater to the premium segment while Vintage or Fastrack sunglasses
target the middle income group. Ray Ban sunglasses have no takers amongst the lower income group.

Garnier offers wide range of merchandise for both men and women.
Each of their brands has been targeted well amongst the specific market segments. (Men, women,
teenagers as well as older generation)

Men - Sunscreen lotions, Deodorant

Women - Daily skin care products, hair care products
Teenagers - Hair colour products, Garnier Light (Fairness cream)
Older Generation - Cream to fight signs of ageing, wrinkles

A female would never purchase a sunscreen lotion meant for men and vice a versa. That’s brand
positioning.

The Four Ps Model

 Product – The first of the Four Ps of marketing is product. A product can be either a
tangible good or an intangible service that fulfills a need or want of consumers. Whether
you sell custom pallets and wood products or provide luxury accommodations, it’s
imperative that you have a clear grasp of exactly what your product is and what makes it
unique before you can successfully market it.
 Price – Once a concrete understanding of the product offering is established we can
start making some pricing decisions. Price determinations will impact profit margins,
supply, demand and marketing strategy. Similar (in concept) products and brands may
need to be positioned differently based on varying price points, while price elasticity
considerations may influence our next two Ps.
 Promotion – We’ve got a product and a price now it’s time to promote it. Promotion
looks at the many ways marketing agencies disseminate relevant product information to
consumers and differentiate a particular product or service. Promotion includes elements
like: advertising, public relations, social media marketing, email marketing, search engine
marketing, video marketing and more. Each touch point must be supported by a well
positioned brand to truly maximize return on investment.
 Place – Often you will hear marketers saying that marketing is about putting the right
product, at the right price, at the right place, at the right time. It’s critical then, to evaluate
what the ideal locations are to convert potential clients into actual clients. Today, even in
situations where the actual transaction doesn’t happen on the web, the initial place
potential clients are engaged and converted is online.
1. Demographic Segmentation
In this type, the consumer market is segregated based on demographic

elements such as qualification, salary, gender, marital status, nature of work,

age, no of family members, gender, nationality, race, religion and other

factors.

2. Geographic Segmentation
As the name suggests, this segmentation type is targeted towards a specific

set of consumer market confined to the territorial limitations or

geographical areas

3. Psychographic Segmentation
Psychological segmentation requires the companies to understand the
mindset and intrinsic attributes of the consumers, based on the variables
such as, ‘O’ (Opinions), ‘A’ (Activities) and ‘I’ (Interests), so as to design
effective promotional and advertising strategies.

4. Behavioral Segmentation
Behavioral Segmentation is segregated based on consumer knowledge and

experience with the product, as it influences the decision of the consumers

to buy a certain product. Thus, allowing to identify consumers that are

aware or unaware of the product, previous consumers, prospective

consumers, present consumers or first-time consumers.

Based on the brand interactions, customers are classified as ‘brand-loyal’,

‘brand-neutral’ or ‘rival-loyal’. In such type of segmentation, consumer

feedback forums, review portals or records from third parties serve as

useful tools to extract market information. It is a stepping stone towards

the effective identification of market segments. It enables the companies to

market and promotes in personalized/customized ways, due to increased

awareness about buyer habits and tendencies.

1. Target Audience / Market and The Size of The

Market
Identifying the market and the target audience is the foundation for any

marketing campaign. It helps the marketers to study the type of consumers

included in the target audience section and to set expectations as per their

needs. It helps to organize and plan their marketing strategies as per the

size of the market and taste of the targeted audience.

2. Set Expectations for the Targeted Audience
Once the target audience and size of the targeted audience are identified it

is necessary to review the needs and requirements of the consumers to

meet the demands and expectations of the consumers.

3. Distinguish the Categories and The Subcategories of

Products
Based on the demographic factors of classification of the consumers it is

necessary for the marketers to subcategorize the products so that the

products fit in the requirements for different age groups, different gender

and so on.

4. Study or Research the Needs and Behavior of the

Targeted Consumers
The marketing team must review the needs and preferences of the

consumers from each section of the society and also it will be easy to come

up with a generic marketing strategy if the requirements of the consumers

are studied and reviewed carefully.

5. Strategize the Marketing Campaign
Once the market research of all the necessary factors has been done and

the marketers have accumulated the consumer interest and their behavior,

the marketing team is all set to strategize their campaign for a particular

product or service. Different advertisements and promotions, banners, etc.

are included to promote the product or the service. The promotion should

be done in such a way that it establishes a connection between the

consumer and the product or the service as the connection is very

important for the success of the campaign.

Market segmentation has been the cornerstone for all the successful brands

in the market whether the company/marketer was a product based

company or a service provider company. For example, Redmi/Xiaomi has

established itself as the most popular and highest-selling mobile phone

brand in the market as they did their homework correct. They studied their

consumers and their expectations and the sensitivity of the consumers

towards the pricing of the phones. After reviewing the market carefully they

came with a successful launch and promotion of the product.