What is consumer segmentation?

Customer segmentation is the practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing, such as age, gender, interests and spending habits.

Customer segmentation, also called consumer segmentation or client segmentation, procedures include: deciding what data will be collected and how it will be gathered

collecting data and integrating data from various sources

developing methods of data analysis for segmentation

establishing effective communication among relevant business units (such as marketing and customer service) about the segmentation

implementing applications to effectively deal with the data and respond to the information it provides

 

STP - segmentation, targeting, positioning

Segmentation:

1. Determine demand patterns

2. Establish possible bases of segmentation

3. Identify potential market segments

Targeting:

4. Choose a target market approach

5. Select the target market

Positioning

6. Position the company’s offering in relation to competition

7. Outline the appropriate marketing mix(es)

Alternative consumer demand patterns for good or service category

Homogeneous Demand - consumers have relatively similar needs and desires for a good or service category

Clustered Demand - consumer needs and desires can be grouped into two or more identical clusters (segments), each with its own set of purchase criteria

Diffused Demand - consumer needs and desires are so diverse that no clear clusters (segments) can be identified.

Segmentation variables for Market Segmentation

VALS framework

Targeting consumers

Undifferentiated Marketing (Mass Marketing). The firm tries to reach a wide range of consumers with one basic marketing plan. These consumers are assumed to have a desire for similar goods and service attributes. One product for everybody.

Concentrated Marketing. The firm concentrates on one group of consumers with a distinct set of needs and uses a tailor-made marketing plan to attract this single group. One product to one market niche.

Differentiated Marketing (Multiple Segmentation). The firm aims at two or more different market segments, each of which has a distinct set of needs, and offers a tailor-made marketing plan for each segment. Two or more products to two or more groups.

#6. marketing planning

§ organizational planning logic

§ critical planning elements

§ marketing planning process

§ audit in marketing planning

Organizational planning logic:

Critical planning elements

Well-integrated marketing plan = clear organizational mission, stability over time, coordination of marketing mix, compatible short and long plans, precisely defined target market, long-term competitive advantage