INTRODUCTION
Through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs.
INSIGHTS
- Mass marketing: Same product to all consumers
(no segmentation, i. e. a commodity)
- Segment marketing: Different products to one or more segments
(some segmentation, i.e. Marriott)
BENEFITS
Geographic Segmentation: International, national, regional / city.
- Dividing the market into groups based on variables such as age, gender, family size or life cycle, income, occupation, education, religion, race, generation, nationality
- Dividing buyers into different groups based on social class, lifestyle, personality
- Dividing the market into groups based on variables such as occasions, benefits, user status, usage rate, loyalty status, readiness stage, attitude toward a product
- Segments must respond differently to different marketing mix elements & programs.
Requirements for effective segmentation:
- Measurable (Size, purchasing power, profiles of segments can be measured)
- Accessible (Segments can be effectively reached and served)
- Substantial (Segments are large or profitable enough to serve)
- Actionable (Effective programs can be designed to attract and serve the segments)
