MARKET

SEGMENTATION AND
TARGET
CITY COLLEGE OF SAN FERNANDO (P)
RAMON L. LERIT, MM/BM
PROFESSOR
MARKET NICHE..
• Niche marketing is an advertising strategy that focuses on a unique
target market. Instead of marketing to everyone who could benefit
from a product or service, ...
• A niche market is a subset of a larger market with its own particular
needs or preferences, which may be different from the larger market.
For example, within the ... within the market for women’s shoes are
many different niches, or segments. Shoes for vegan women would be
a niche market, as would shoes for plus-sized women, shoes for
nurses, or even shoes for transvestites. These would all be niche
markets within the larger women’s shoe market.
What Makes a Niche?

• Nearly every market can be further refined, or divided, by the

particular needs and preferences of its constituents. Some of the
most common ways to define a niche are based on:
• Price (high, moderate, discount)
• Demographic base (gender, age, income level, education level)
• Level of quality (premium, high, moderate, low, cheap)
• Psychographics (values, interests, attitudes)
• Geographic (the buyer’s precise location)
WHY CUSTOMIZE?
• We live in a world where everyone wants it “their way,” and people expect businesses to deliver custom
options.
• Think about how people order when you go to a restaurant. They want no tomato, but add avocado, and the
burger to be cooked medium-well, but not too well.
• Modern consumers expect the ability to customize anything and everything to fit their individual
preferences.
• If you want your business to become competitive in a global marketplace, you have to tune into what other
companies are doing and then figure out how you can offer something more specific to your customers.
• To stand out, you have to figure out how to create a fully custom experience – from the design of your
website, to the ease of ordering, to the items you offer, and how you can make them unique.
• About one out of every three consumers indicate that they want the ability to personalize a product and will
look for that specific ability when shopping.
Customization vs. Personalization

• The two words aren't actually interchangeable. Sure, they overlap in intent, but there's
a stark difference in how they're initiated.
• What Is Personalization?
• Personalization is centered around the idea of tailoring a user's experience for them.
• Using collected user data and research, content, interface, and marketing can all be
catered toward the ideal user's direct interests.
• Personalization increases user-relevancy, therefore increasing conversion rates.
• Customization is done by the user. Users are asked to identify their preferences and
they are then shown things that they prefer. For example, when customers sign up for
Netflix, the service asks users to select a few shows they like and then displays a list of
options based on those choices. Then, Netflix customizes the user’s account based on
the identified preferences.
• On other platforms, another example of customization happens when you click the
“hide ad” option for Facebook ads or Google Display Network ads.
Behavioral segmentation
• the process of dividing the total market into smaller homogeneous
groups based on customer buying behavior. Behavioral
segmentation is done by organizations on the basis of buying patterns
of customers like usage frequency, brand loyalty, benefits needed,
during any occasion etc.
Examples of Behavioral Segmentation

• Behavioral segmentation that studies the behavior of

consumers towards a product or service consists of different
variables that are studied by marketers to accordingly devise
a market strategy. Based on the particular requirement of
the market, behavioral segmentation is divided into variables
namely brand loyalty, benefit sought, readiness to
buy/purchase, and usage based segmentation.
VARIABLES OF BEHAVIORAL
SEGMENTATION
• Brand Loyalty Based Segmentation

• This is one major behavioral market segmentation variables that

marketers use to segment their consumers. Businesses generally grow
by adopting two major actions. Firstly attracting consumers to
purchase and use a product or service and secondly, retain that
customer. Retention of customers is based on how loyal they are to a
product or service and the more brand loyalty a product or service
enjoys, the more is its customer base. This is one common behavioral
segmentation strategy that marketers use to create brand loyalty in
consumers.
VARIBLE CONT….
• Benefit Sought Based Segmentation

• Benefit sought segmentation is based on the different benefit

consumers derive from a product and service. When a consumer
purchases a product, he or she has some expectations in terms of
benefits.
• If you conduct a survey and ask every individual customer the reason
behind using your product or service, to some extent you will receive
a unique response from every customer.
VARIABLE CONT…
• Readiness to Buy Based Segmentation

• Readiness to buy in behavioral segmentation refers to the grouping of

potential buyers who are at different psychological stages of the
purchasing cycle. The purchasing cycle starts from product unawareness
to awareness, product-related knowledge, interest development, desire
to purchase product, and finally the intent to purchase the product.
• When marketers understand the stage at which consumers are standing,
they can better decide on which promotional activities can offer better
results and which medium can effectively reach out to these customers.
VARIABLE CONTI….
• Usage Based Segmentation

• Usage based behavioral segmentation target the customer’s habit of repeated purchases.

behavioral market segmentation divides customers based on usage, categorizing them under the
• Heavy usage
• Moderate usage
• Less usage
• Skin care products, for example, target their consumers through offering large containers and
tubes for consumers that are placed under the heavy usage category, while offering small
packages or sachets for individuals who lay under the less usage category.
• Another example of electronic companies like LG Electronics. This Company market their
products offering the biggest discounts to the highest purchaser. For example, offering a 15%
discount on a TV and a 35% discount on the purchase of an Air Conditioner.
CONVERSION….
• The Conversion Model is a psychological model of consumer behavior
that helps brand managers measure the strength of the relationship
between consumers and brands. The world's leading measure of
commitment.
• Conversion marketing refers to tactics that encourage customers to
take specific action, “converting” a person browsing your website into
a purchaser of your product or service.