MARKET

SEGMENTATION
 What Is Market Segmentation?
Market segmentation is a marketing term that refers to aggregating prospective
buyers into groups or segments with common needs and who respond similarly to a
marketing action. Market segmentation enables companies to target different
categories of consumers who perceive the full value of certain products and services
differently from one another.
Why Is Market Segmentation Important?
 Market segmentation realizes that not all customers have the same interests, purchasing
power, or consumer needs. Instead of catering to all prospective clients broadly, market
segmentation is important because it strives to make a company's marketing endeavors
more strategic and refined. By developing specific plans for specific products with target
audiences in mind, a company can increase its chances of generating sales and being more
efficient with resources.
 Understanding Market Segmentation
Companies can generally use three criteria to identify different
market segments:
1.Homogeneity, or common needs within a segment
2.Distinction, or being unique from other groups
3.Reaction, or a similar response to the market
 Benefits of Market Segmentation

• Marketing segmentation takes effort and resources to implement. However, successful marketing segmentation
campaigns can increase the long-term profitability and health of a company. Several benefits of market
segmentation include;

 Increased resource efficiency. Marketing segmentation allows management to focus on certain demographics or
customers. Instead of trying to promote products to the entire market, marketing segmentation allows a focused,
precise approach that often costs less compared to a broad reach approach.
 Stronger brand image. Marketing segment forces management to consider how it wants to be perceived by a
specific group of people. Once the market segment is identified, management must then consider what message to
craft. Because this message is directed at a target audience, a company's branding and messaging is more likely to
be very intentional. This may also have an indirect effect of causing better customer experiences with the company.
 Greater potential for brand loyalty. Marketing segmentation increases the opportunity for consumers to build
long-term relationships with a company. More direct, personal marketing approaches may resonate with customers
and foster a sense of inclusion, community, and a sense of belonging..

 Stronger market differentiation. Market segmentation gives a company the opportunity to pinpoint the exact
message they way to convey to the market and to competitors.

 Better targeted digital advertising. Marketing segmentation enables a company to perform better targeted
advertising strategies. This includes marketing plans that direct effort towards specific ages, locations, or habits via
social media.
 PROCESS OF MARKET SEGMENTATION

The segmentation process is the initial step in marketing, where the market is split into segments and then
applied to marketing strategies to target the particular segments. The steps involved in this process are as
follows:
1. Define your market and the opportunity.
The first step is to define the boundaries of the market, for example, geographic area, age, gender, and income level. Develop a
clear picture of the products or services you offer and the type of consumers who might want to buy them. If you’re highly
specific, you can build better segments.

2. Segment your market.

This involves splitting up the market into groups that share common characteristics. Divide your potential customers into groups
based on the segmentation strategies you have chosen.

3. Research your market to understand it.

You need to develop a good understanding of each segment. They may have different needs, wants, desires, and buying behaviors.
Your research can involve surveys, or other types of research, such as focus groups and interviews.
4. Create your product or marketing strategy.
Once you have defined and researched each segment, you can develop the products and marketing strategies to best target
each group. Your strategy should tell you how each product fits into the market, what price to charge, what promotions to run,
which channels to sell through (e.g., online vs. in person), and so on.

5. Test your marketing strategy.

Before launching a new product or marketing campaign, test it out with a small group of people from within that segment.
Improvements can then be made before going ahead with a full launch. Real-world feedback from consumers is important for
a product’s success.

6. Get feedback and review your success.

After launching a new product or marketing campaign, collect customer feedback and review how successful it has been.
Evaluate success based on sales volume, profit margins, and other key metrics. Make any necessary changes, and use the
process again with future products or services.
 Markets can be segmented in several ways such as
geographically, demographically, psychographically or
behaviorally.

• involves segmenting your
Demographic Segmentation
• Demographic segmentation is a
precise form of audience
identification based on data
points like age, gender, marital
status, family size, income,
education, race, occupation,
nationality, and/or religion.
Geographic Segmentation
audience based on the region
they live or work in. This can be
done in any number of ways:
grouping customers by the
country they live in, or smaller
geographical divisions, from
region to city, and right down to
postal code.
 Demographic Segmentation
factors
Age
 Marketers use age segmentation to target specific age groups. They view this characteristic as a particular age range or
certain life stages, such as infants, children, teens, young adults, middle-aged, and seniors. Age segmentation can also be
based on generations like Baby Boomers, Generation X, Millennials, Gen Z, etc. Because people in these generation
groups were born around the same time, they grew up with shared experiences and usually share some of the same
buying behaviors.
Gender
 Gender-specific marketing is a great technique when done well as the different genders have distinct likes, thoughts,
and preference. However, when using gender-based segmentation, like other types of segmentation, it is crucial for
marketers to avoid delivering marketing messages based on stereotypes. These types of advertisements can turn off
or even anger your target market.

Income
 Knowing the income range of your consumers can help you target the right audience for your product.
Demographics are often considered when manufacturers determine pricing strategies. Consumers with lower incomes are
usually more likely to purchase items that have the best deal and will choose inexpensive products. Manufacturers
targeting the masses or manufacturing everyday items will more likely appeal to these people. On the other hand, people
with higher incomes may prefer luxury products. Thus, luxury item manufacturers will target high-income consumers and
set prices accordingly.
Occupation
 Occupation targeting is useful when creating products for specific job positions or industries. Dividing the market based
on job title or seniority is helpful when determining who your products can benefit. An example of this demographic
segmentation would be a company that makes suits targeting people working in high-end business positions. In contrast,
other clothing companies may have products better suited for casual work environments and target consumers working
in less formal environments.

Cultural background
 Demographic segmentation can also involve creating groups based on different cultures that have distinctive interests,
beliefs, and attitudes. These differences affect the marketing strategies that attract customers, as they can impact their
buying decisions and how they respond to advertisements.
Here are six factors that pertain to geographic segmentation and can
be used to create customer segments:
1.Location (country, state, city, ZIP code)
2.Time zone
3.Climate and season
4.Cultural preferences
5.Language
6.Population type and density (urban, suburban, exurban or rural)
 BEHAVIORAL SEGMENTATION
-is the process of sorting and grouping customers based on the behaviors they exhibit.

Types of behavior Segmentation

1.Purchase and usage behavior Segmenting by purchase behavior disentangles the varying trends and
behavior patterns that customers have when making decisions.

2.Occasion or timing Categorizes customers who are most likely to interact with your brand or purchase
from your website on either specific occasions or set times.

3.Benefits sought Segmenting by benefits sought refers to dividing your audience based on the unique
value proposition your customers is looking to gain from your product or service.

4.Customer Loyalty Measures the level of loyalty a customer has with your brand, either through a
rewards program, number of purchase ,or general engagement with your marketing efforts.
 Understand your target market better.
Market segmentation gives a more complete picture of who your customers
are. Developing a clear understanding of your customers is essential
because it allows you to adjust your products, services, or content to their
needs.
Focus on products and content.
 When you know your customers, you can focus on creating products or content that meets
their needs. This allows you to offer more specific products and services.

Save money.
 With market segmentation, you can spend money on promoting products to people who
may be interested. You can focus on those segments that are more likely to buy from you.
For example, if your product is expensive and designed for business users, you may not
want to invest your budget on social media channels dominated by teenagers.
 PSYCOGRAPHIC SEGMENTATION
 has been used in marketing research as a form of market segmentation which divides
consumers into sub-groups based on shared psychological characteristics, including
subconscious or conscious beliefs, motivations, and priorities to explain and predict consumer
behavior.
What is the difference between demographic
segmentation vs psychographic segmentations?
 Developed in the 1970s, it
 Psychographic segmentation’s emphasis on
applies behavioral and social
characteristics like personality and values differs
sciences to explore to
from demographic segmentation, which uses a
understand consumers’ decision-
specific trait (like gender, age, income, etc.) to
making processes, consumer
categorize potential audiences.
attitudes, values, personalities,
lifestyles, and communication
preferences.
  Market segmentation is a process
What Are Some Market
Segmentation Strategies?
 Strategies include targeting a group
by location, by demographics—
such as age or gender—by social
class or lifestyle, or behaviorally—
such as by use or response.
companies use to break their
potential customers into different
sections. This allows the
company to allocate the
appropriate resource to each
individual segment which allows
for more accurate targeting across
a variety of marketing
campaigns.
THANK YOU
FOR
LISTENING! o ENAO, ELEAZAR S.
o ESCALERA, CINDY GRAZE Z.
o ETES, RENEJUN M.
o FABE, HEART JANE G.
o FUENTES , AIRA M.