HBNF02 - MARKETING

Lecture 9: Marketing Segmentation

• INTRODUCTION
• MARKETING SEGMENTATION
• GEOGRAPHIC
• DEMOGRAPHIC
• PYSCHOGRAPHIC
• PRODUCT USAGE
• BENEFITS
 Why Samsung Galaxy’s Smartphone Product
Segmentation Makes Sense
• Samsung has been the number one brand in Campaign Asia-Pacific and NielsenIQ's Asia's Top 1000 Brands report for 10 years straight
• Samsung has used all possible communication channels to convey its brand’s positioning and personality globally
• From mass media advertising, public relations, event sponsorship, sports sponsorships, product placements, to the Samsung experience gallery and
Samsung experience retail stores
• The brand has focused on two main objectives:
• Position itself as a premium, world-class brand offering quality, credibility and design
• Become the top consumer electronics brand globally
Further reading:
• https://www.forbes.com/sites/moorinsights/2020/09/01/why-samsung-galaxys-smartphone-product-segmentation-makes-sense/?sh=61f3f7bd4532
• https://www.pdfagile.com/blog/samsung-segmentation-targeting-and-positioning
• https://www.thedrum.com/news/2022/02/22/samsung-s-marketing-makes-the-commonplace-feel-transformative
• https://newsbasis.com/what-are-the-segmentation-of-samsung/
• https://news.samsung.com/us/consumers-changing-brands-samsung-next/
 INTRODUCTION
• Targeting the right market with is essential
• If aim too broadly, marketing campaign might reach only a few people instead
of the intended group
• Waste time, effort, money- wasted marketing campaign
• Market segmentation can help to target just the people most likely to become
satisfied customers
• Breaking down the pool of all (potential) customers into specific groups
• Every consumer group is a market segment, each segment are the tendency of
buyers with similar wants or needs
 MARKETING SEGEMENTATION
• Marketers use market segmentation, which is the process of separating, identifying, and
evaluating the layers of a market to identify a target market
• Makes it easier for marketers to personalize their marketing campaigns
• A marketing strategy
• Select groups of consumers are identified so that certain products or product lines can be
presented to them in a way that appeals to their interests
• Known as marketing segmentation
• Refers to the process of creation of small groups (segments) within a large market to bring
together consumers who have similar requirements
• A firm will often use multiple segmentation bases, or criteria to classify buyers, to get a fuller
picture of its customers and create real value for them
• Identify targeted groups of consumers to tailor products and branding in a way that is attractive to the group
• By dividing up the market-grouping the customers with similar needs
• To identify the target markets that may be most profitable for the firm
• Generally 4 criteria to identify different market segments
1. Geographic segmentation: The where
• By comparison, geographic segmentation is often one of the easiest to identify, grouping customers with regards to their
physical location
• This can be defined in any number of ways:
o Country
o Region
o City
o Postal code
• E.g: It’s possible to group customers within a set radius of a certain location – an excellent option for marketers of live
events looking to reach local audiences. Being aware of your customers’ location allows for all sorts of considerations when
advertising to consumers
• E.g: Considering the religious sentiments, Beef is banned in India. Thus, ‘McDonalds India’ does not sell beef-based edibles
in the Indian continent. While ‘McDonalds US’ sells beef-based edibles freely across its American restaurant chains.
• E.g: ‘LG Electronics’ promotes and advertises for its ‘Heaters’ in colder regions and for ‘Air conditioners’ in warmer regions.
Thus, based on the climatic conditions, the same brand promotes different products targeted towards specific customer
segments
2. Demographic segmentation: The who
• Demographic segmentation might be the first thing people think of when they hear ‘market segmentation’
• Most straightforward way of defining customer groups, but it remains powerful
• Demographic segmentation looks at identifiable non-character traits such as:
o Age
o Gender
o Ethnicity
o Income
o Level of education
o Religion
o Profession/role in a company
• E.g: Demographic segmentation might target potential customers based on their income, so your marketing
budget isn’t wasted directing your messaging at people who likely can’t afford your product
• E.g: The popular cereal brand, ‘Kellogg’s offers age-specific cereal varieties targeted at kids and mature groups
• E.g: Many deodorant companies offer gender-specific aromas, specifically meant for ‘Men’ & ‘Women’
3. Psychographic segmentation: The why
• Market segmentation by personalities, interests or lifestyle
• Can identify them by their:
o Personality traits
o Hobbies
o Life goals
o Values
o Beliefs
o Lifestyles
• Compared to demographic segmentation, this can be a harder set to identify
• Extensive research tools such as survey questionnaires, focus group interviews, case study
methods, and consumer interviews are used to retrieve market information
• 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.

• E.g: Fitness/Exercise markets target health and fitness-conscious consumers while

segregating the consumer base

• E.g: ‘Zara stores’ also have segmented their markets based on consumer lifestyles.

These stores target customers willing to buy trendy and expensive designer clothes

• E.g: Harley-Davidson focus on “classy capitalists” who have wealth and privilege
4. Behavioral segmentation: The how
• Consumer knowledge and experience with the product, as it influences the decision of the consumers
to buy a certain product
o Studies the behavioral traits of consumers
o Their knowledge
o Attitude towards
o The use of
o Likes/dislikes of
o Response to a product, service, promotion, or brand
• 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.
• E.g: ‘Sensodyne’ toothpaste brand is specifically targeted at consumers with
sensitive teeth. While brands such as ‘Colgate’ and ‘Pepsodent’ are specifically
meant for teeth whitening and prevention of tooth decay.
• E.g: In the smartphone market, ‘Blackberry’ was launched specifically targeting the
business population and the promotional strategy gave it exclusivity over other
smart-phones. ‘Apple’ was launched for premium consumers, looking for
uniqueness
 PRODUCT USAGE
• A product segmentation strategy is when a business splits their product into several segments
• This is done to increase market share while reducing the cost of developing completely new products
• Each designed to cater to a certain industry, demographic, or another customer segment, and the
process they use to achieve that goal
• Product segmentation is when a company modifies its product into several different products in order
to attract different kinds of customers or target different markets
• E.g: Coca-cola drinks have different diet versions, caffeine-free versions, and versions of extra flavors
added
• Market segmentation simply modifies your marketing strategy in an effort to do the same
• Product segmentation can make market segmentation easier by more directly appealing to the target
• E.g: Car manufacturers are another great example of product segmentation- variety of Sedan, Truck,
Van, 4x4- Toyota
 BENEFITS
• Market segmentation can help business to better understand the target audiences and ideal
customers
• By arranging their company's target market into segmented groups, rather than targeting each
potential customer individually, marketers can be more efficient with their time, money, and other
resources than if they were targeting consumers on an individual level
• Grouping similar consumers together allows marketers to target specific audiences in a cost effective
manner
• Market segmentation also reduces the risk of an unsuccessful or ineffective marketing campaign
• When marketers divide a market based on key characteristics and personalize their strategies based
on that information, there is a much higher chance of success than if they were to create a generic
campaign and try to implement it across all segments.
• Marketers can also us segmentation to prioritize their target audiences
• If segmentation shows that some consumers would be more likely to buy a product

than others, marketers can better allocate their attention and resources

• Market Segments help to narrow down the markets effectively and is an essential

tool to understand the demands and requirements of the consumers

• So before launching a product, it is paramount to identify user segments and

promote them relevant

• Without proper market segmentation, the product cannot reach the right audience

and would be a disaster!

 DISCUSSION
• Based on the given template below, prepare a marketing segment on any
of the local business that you know in Brunei.
Further reading
• https://www.yieldify.com/blog/types-of-market-
segmentation/
• https://news.mediaheroes.com.au/blog/market-
segmentation
• https://www.educba.com/market-segmentation-types/
• https://www.questionpro.com/blog/what-is-market-
segmentation/
• https://opentextbc.ca/businessopenstax/chapter/mark
et-segmentation/
• https://www.surveymonkey.com/market-
research/resources/how-to-conduct-product-
segmentation/