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Market Segmentation and, , Marketing Mix, ion, ee, , Contents ..., 2.1 Market Segmentation, 2.1.1 Introduction, 2.1.2 Meaning and Definitions and Types of Market Segmentation, 2.1.3 Importance of Market Segmentation, 2.1.4 Limitations/Costs of Market Segmentation, , 2.1.5 Bases of Segmentation / Patterns and Procedure of Market, Segmentation, , 2.1.6 Criteria and Approaches of Segmenting A Market / Qualities, , of Good Segmentation, 2.2 Marketing Mix, , 2.2.1 Introduction, , 2.2.2 Meaning and Definitions of Marketing Mix, , 2.2.3 Elements of Marketing Mix — Product, Price, Place and, Promotion s, , 2.2.4 \Importance of Marketing Mix, , ¢ Points to Remember, , e Questions for Discussion, , © Questions from Past Examinations, , 2.4 MARKET SEGMENTATION S|, 2.1.1 Introduction , It is a known fact all over the world that no two ATE ART :, behave and react in a similar fashion even in the same given fe, , i istances. Human behaviour differs from person to person an, , santa ituation. Similarly, the demand of different human beings for, “aes oe ts 3 also different. Their reactions to prices, various, Ont eat mes etc, is also different. Marketers have realised this, PR eistes whieh has given rise to Market Segmentation.
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Marketing, es, , 2.2 Market Segmentation and Marketing mix, , 2.1.2 Meaning and Definitions and Types of Market, __ Segmentation, (Market segmenta, and d, , marke, , tion gives formal recognition to the fact that want., “sires of consumers are diverse and we can formulate a specific, ting offering (product/ service) to meet the needs of a specific, category or segment of the market, so that supply can best be corelated, todemand. — ;, Market segmentation is the process of grouping buyers into different, categories on the basis of their common needs or desires, or on the basis, of the differences in their needs, desires and requirements. It is a strategy, of subdividing the target market into sub-groups of cy /with, definable, distinct and homogeneous characteristics so that a di erent, marketing programme can be set up for each group, This will result in an, enhancement in the satisfaction of the consumers and profit to the, marketer. :, Definitions of Market Segmentation: ~ ’, Market segmentation fe been defined in different ways by different, experts. | ve i, Some of the common definitions are as UNC, 1. According to Professor Phillip Kotler,, the sub-dividing of a market into h, , , , , , larket Segmentation is, neous sub-sects o, , , , , , , , , , , , , , , 3. Segmentation has also been d ined as “Divisions of a market, into sub-groups, with similar motivations"., Another accepted definition of Segmentation is "Segmentation, means nothing more than dividing a market or a consumer base,, into pieces and understand, ., Thus, market segmentation Is basically a method of achieving, maximum market response by dividing the market into various groups, on the basis of certain common characteristic, common need, desire,, , common response etc. In a sense it Is a strategy of ‘divide and conquer’, ie, divide the market in ord, , , , , , , er to conquer the demand,, Marketers to give better attention, , Market segmentation enables the, , , , , , Marketing, Thus, marke, 1. Identify, 2. Design, the ma, Profit t, Types of Mart, There are |, , basically, there, , , , 1. Peopk, 2. Produ, 1. Peop, perso, consi, dime, ecor, thes, chay, , All, pro, , pur, , hin, , bu, , 2. Pr, th, , 2.1.3 lr, The, organise, Import:, Organi:, The, Segmer, 1,
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9 Min, , ‘ket, , ants, cific, cific, ited, , ent, asis, gy, ith, nt, an, , at, , , , Me Ne a u, , , , Marketing ates: 2.3 Market Segmentation and Marketing Mix, makes ee, , Thus, market segmentation j, , 1. Identifying the viable se, e, , Ss a two-fold process, Namely:, My ‘gments or pockets of consumers and, Designing separate marketing programmes for each segment of, , the market, so as to achieve maximum consumer satisfaction and, profit to the organisation,, , Types of Market Segmentation:, There are man, basically,, , Oct. 12], ly ways in which a market can be segmented. However,, , there are two approaches to a market segmentation i.e, 1. People-Oriented Approach,, , 2. -Product-Oriented Approach,, , 1. People-Oriented Approach: It_is also called _as customer, personal characteristic approach. Under this approach, a, consumer can be classified based on various consumer, dimensions such as geographic location, demography, socioeconomic characteristics and Psychographic characteristics. (All, , these characteristics are analysed in detail at a later stage in this, chapter)., , All the above Mentioned: variables are independent of any, product service or situation in which the buyer makes the, purchase decision. These variables relate only to the buyer, , himself. They help in finding out the type of consumers who will, buy our product., , 2. Product-Oriented Approach: This a ‘oach is also known as, the consumer response approach, Under this approach of market, segmentation, the response or behaviour of the buyer is studied, in relation to the product benefits, product usage, store,, Patronage and brand loyalty. (All these criteria are analysed in, detail at a later stage in this chapter). This approach segments, the market on the basis of why consumers purchase a particular, product or service. Buyer behaviour involves psychological, , $ factors such as buying motives, attitudes, perceptions and, , ie preferences, :, , 2.1.3 Importance of Market Segmentation, , ; { _the Strategy of Marketing Segmentation benefits both the marketing, , _ Ofganisation as well as the consumers. . :, , ortance/Benefits of Market Segmentation to the Marketing, , ganisation:, , The following are the specific benefits that accrue from Market, , , , , , , , , , , , , gmentation to the Marketing Organisation: :, 1. Amore precise definition of the market: Market segmentation, enables an organisation to understand why consumers do or do, , ¢
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Marketing, , 2.4 Market Segmentation and Marketing mix, , not buy certain products or services. In other malde) it Provides, an understanding of how best to meet the changing market, demands. Thus, the firm would be in a better position to locate, and compare marketing opportunities., , A more effective marketing programme: When customer, needs are fully understood, marketers can effectively formulate, and implement marketing programmes which will be in tune with, the demands of the market, a | ee, Better assessment of the ampetition: Market segmentation, helps in assessing the, competitors and taking actic, , , , , , , , , t results., ively so, , , , , , , , cus, , rais, , 2.4.4 Lim, As we, Organisatioy, these bene, may also sc, benefits. Th, The cos, , 1. Pre, , Var, cos, , cor, inv, rea
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Marketing 2.5 Market Segmentation and Marketing Mix, ae ee SE, , 3. Improves the standard of living: The marketing programme for, a particular segment tries to arouse the hidden needs of the, customers and persuades them to buy different products. It thus, raises their standard of living. ~\, 2.1.4 Limitations/Costs of Market Segmentation, , , , As we have seen above, market segmentation benefits both the, organisation as well as the consumers. However, we cannot forget that, these benefits do not accrue for free. Certain costs have to be borne. It, may also sometimes happen that the costs of segmentation outweigh its, benefits. This would render the entire exercise of segmentation as futile., , The costs of segmentation are as under:, , 1. Product Cost: In order to take care of the specific needs of each, market segment, the firm usually develops a separate product for, each segment. This difference in product for each segment may, range from a difference in label or package right to a totally, different product. If a different Product for each different, segment is to be created, a lot of expenditure on research and, development has to be undertaken., , 2. Production Cost: In order to enjoy economies of scale, a certain, number of units of a Particular product have to be produced. In, case a company divides its market for a particular product into, Many segments, and manufactures different products for each, Section, it may not be able to sell enough number of each, product so as to enjoy economies of scale and this would, , ‘increase the production cost., , 3. Promotion Cost: Every organisation has: to come up with a, , Promotion strategy that will attract its customers from the varied, segments. For this a large amount of expenditure in terms of, human and financial resources has to be undertaken as various, different advertisements have to be designed and placed in, Various different media. This results. in mounting promotion, Costs, ., , 4. Inventory Costs: The more the number of segments that a, “ company wants to serve, the more will be the inventory cost. The, inventory costs will work out higher because of two basic, reasons,, , , , , , , , , el, , Y
