Q. Describe how can a company divide a market into segments?
Explain basis for market segmentation?
Ans.: Market may be segmented by using several relevant bases they are:-
(i) Geographic Segmentation: Geographic segmentation use for dividing the market into different geographical units like regions, nations countries, cites or neighborhood. One of the main geographic segmentation in India is the division of and urban and rural areas. The need to segment the market geographically becomes clearer when we look at some of the distinctiveness of the market. In India, there are more than 5000 towns and over 6, 38,000 villages. Closely 87% of these villages have population of less than 2000 people. This variation in population is essential for the marketer whereas formulating marketing strategy and plans.
In addition to this products penetration, income levels and accessibility of infrastructure like roads and electricity make the task of geographic segmentation significant.
For most of the products, diffusion levels in rural areas are lower than in urban areas. Income and lifestyle issues influence the penetration rate of services and products
For example: Haats and mandis serve significant roles in the exchange of goods and services in rural areas.
(ii) Demographic Segmentation: In demographic segmentation, the market is divided into groups on the origin of variables like family size, age, gender, family life cycle, income occupation, education religion, race generation, nationality & social class.
Age & Life Cycle Stage: Consumer desire and abilities change with age. For example: Hindustan Uni Level launch Pears soap in pink color especially for children. Johnson & Johnson Baby Powder and Talcum Powder are classic instance of products for infants and children. Television channels point out the segmentation based on age and life cycle. There are channels like Sanskaar and Aastha target which towards the old generation and cartoon network, Disney, hangama are channels for children etc.
Gender: Men and women have dissimilar behavioral orientation. Gender differentiation has been long applied to product categories like, cosmetics, clothing & magazines. For example: Axe deodorant is positioned as a masculine product. Park Avenue from Raymond is placed as masculine brand. Bajaj wave is a brand specially designed for women in the scooter segment.
Income : Income segmentation is a long standing practice in a variety of products and services and it is a basic segmentation variable. For example: Nirma Washing Powder was launched as the lowest cost detergent in India chiefly targeted at middle income group. Markets for various consumers' products in India are presentation rapid growth due to low unit cost
Generation: Each generation is profoundly influenced by the time in which it grows- the music movies, politics.
Social Class: Social class has very strong influence on preference in, clothing, home, cars, leisure activities, furnishings, reading habits, retailers etc.
(iii) Psychographic Segmentation: In this segment, elements like personality traits, value and attitude lifestyle system form the base. The strict norms, those consumers follow having respect to good habits or dress codes are representative examples. For example: Mr. Donald's altered their menu in India to adapt to consumer first choice. The market for Wrist Watches provides instance of segmentation. Titan watches have a wide range of sub brands like Sonata, Raga, edge ,fast track, etc. or instant noodle markers, quick to cook food brands like, Top Ramen, Maggi or Femina, women's magazine is targeted for modern women.
(iv) Behavioral Segmentation: Markets may be segmented on the base of buyer behavior. The main idea in buyer behavior is that different customer groups expect different advantage from the similar product and accordingly they will be different in their purpose in owning it. In buyer behavior based segmentation also, various sub factors form the basis. For example: Purchase occasion may be 1 base, buyer can be segmented on the basis of whether they are regular buyers or special occasion buyers. Degree of use may be another base, they may be segmented on the base of whether they are, medium, light or heavy users of the product or whether they are enthusiastic or indifferent or negative towards the product.