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MB0046 : Briefly explain the bases for segmenting consumer markets along with examples. Do you think these bases are required for market segmentation? Why?

Posted on: October 19, 2011

MB0046  : Briefly explain the bases for segmenting consumer markets along with examples. Do you think these bases are required for market segmentation? Why?
Answer :-

The bases for segmenting consumer markets:

Geographic bases allow us to segment a market that is spread over a large geographic area into sub-markets that cover smaller geographic areas. Geographic segmentation usually involves dividing up geographic markets by using existing political boundaries, natural climatic zones, or population boundaries. For example, Bennett, Coleman and Co. Ltd divided markets according to geographical units for their tabloids. In Bangalore, the tabloid is known as Bangalore Mirror where as it is Mumbai Mirror in Mumbai.
Demographic segmentation occurs when one or more demographic traits are employed to divide a market. Typical demographic traits that are used include age, gender, race, ethnicity, marital status, family size and stage of the family life cycle. a) Age and Life-Cycle Stage: Consumers’ wants and abilities change with age. On the basis of age, a market can be divided into four parts viz., children, young, adults and old. For the consumers belonging to the different age groups, different types of products are produced. For instance, different types of ready-made garments are produced for consumers of different age groups. A successful marketing manager should understand the age group for which the product would be most suited and determine a suitable marketing policy, pricing policy, advertising policy etc…

For example, HUL launched ‘Pepsodent kids’ toothpaste for small children.

b) Gender: Gender segmentation has long been applied in clothing, hair-styling, cosmetics and magazines. For example, Emami segmented its personal care products on the basis of gender i.e. Emami Naturally Fair for women and Fair and Handsome for men.

c) Income: Segmentation based on Income is a traditional practice followed in product categories such as automobiles, clothing, cosmetics and travel. However, income does not always determine the best customers for a given product.

For example, Baja Auto limited, a leading automobile company, manufactures different bikes for different commuters on the basis of the Income levels. For entry level (income less than Rs 35000) it is Bajaj CT 100, for mid segment (income greater than Rs 35000 but less than Rs. 60000) it is Pulsar and for the upper segment (income greater than Rs 60000) Avenger and Eliminator are positioned respectively.

Social class segmentation employs a combination of demographic traits that are commonly believed to reflect membership in different social class strata.  Occupation, education, and income are the primary demographic traits that reflect social class membership.
Psychographic segmentation bases divide markets based on differences in lifestyles or differences in personality traits.  Lifestyle segmentation is one of the most popular and effective ways to create segments for consumer products.b) Personality: When Marketers use personality variables to segment the markets, they endow their products with brand personality that corresponds to consumer personalities. For example, Raymond advertises its fabrics with the tag ‘The Complete Man.’

c) Social Class: It has a strong influence on the consumer preferences and the products they buy or consume. For example, when buying cars, clothing, home furnishings, leisure activities, reading habits etc., Social class becomes the key factor. Many companies design products and services for specific social classes. For example, TATA Nano was introduced in the market as a One-Lakh Car that could be affordable by middle and lower income groups.

Consumer shopping behavior patterns include such things as the type of store shopped in, timing of purchases (i.e. time of day, week, or year), how much of a product is purchased on a given visit to the store, and how often the individual frequents a particular type of retail establishment or shopping mall.
Product consumption behaviors include product consumption or usage rates base (as discussed earlier).  Other segmentation bases included in this category are product usage occasion, product use versus non-use, and loyalties to specific brands.a) Occasions: According to the occasions, buyers develop a need, purchase a product or use a product. It can help firms expand product usage. A company can consider critical life events to see whether they are accompanied by certain needs. For example, Tanishq a TATA enterprise offers gold schemes and promotions for Akshaya Thrutiya (auspicious day to purchase jewellery)

b) Benefits: Buyers can be classified according to the benefits they seek from the products. For example, Peter England, a Madhura garment brand positioned its wrinkle free trousers on the basis of benefits.

c) User Status: Markets can be segmented into non-users, potential users, first time users and regular users of a product. Each market segment requires a different marketing strategy. The company’s market position will also influence its focus. Market leaders will focus on attracting potential users, whereas smaller firms will try to attract current users away from the market leader. For example, Kishkinda resort near Hampi classifies its customers according to this characteristic. Resort believes that locals falls into non- user category, affluent class come to Hampi as potential users, foreigners as first time users, rich people near Hampi who frequently come there as regular users.

d) Usage Rate: Markets can be segmented into light, medium and heavy product users. Heavy users are often a small percentage of the market but account for a high percentage of total consumption. Marketers prefer to attract one heavy user rather than several light users and so, they vary their promotional efforts accordingly.

For example, Alan Paine textile brand, offered 4 cotton trousers for Rs. 999. Here, the Company is interested in getting profits from sales volume rather than its selling price.

e) Loyal Status: Consumers have varying degrees of loyalty to specific brands, stores and other entities. Buyers can be divided into four groups according to brand loyalty status.

a) Hard-core Loyals: Consumers who buy one brand all the time. For example, customer may be using only BSNL cellular services though there are different options available.

b) Split Loyals: Consumers who are loyal to two or three brands. For example, consumer may go for tax savings schemes of post offices and Life Insurance Corporation of India

c) Shifting Loyals: Consumers who shift from one brand to another. For example, consumer who used Nokia cell phones starts buying Sony- Ericsson mobiles.

Segmenting markets according to consumer predispositions essentially entails creating segments based on differences in consumers’ wants, needs, and attitudes. We talked at length about creating market segments based on differences in consumers’ wants and needs (i.e. creating benefit segments).  Sometimes it is useful to segment markets based on how knowledgeable people are of a particular product category, or whether they’ve experienced problems with specific products or brands. And, finally, we also include consumers’ media viewing habits in this category.  When segmenting markets using this latter base, we are looking for differences in the types of media consumers prefer i.e. preferences for specific television shows, radio stations, magazines, newspapers, and the like.
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4 Responses to "MB0046 : Briefly explain the bases for segmenting consumer markets along with examples. Do you think these bases are required for market segmentation? Why?"

Hi
Nikhat

Kindly share with me SMU MB0045 Assignment Answer
Winter / November 2011 Set 1 and 2 Plz Plz

Thanks In Advanced

Rupesh.pote@gmail.com

Why do u need set 1 & 2 as well? do we have to submit both? or just set 1 or set 2?

Guys

I Appreciate if anyone shares MBA Marketing Management Assignments..

Cheers
Kris

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