This document discusses market segmentation, including defining it, different levels and bases for segmenting consumer and organizational markets. It outlines the process of segment evaluation, analysis and selection. This involves identifying attractive segments, evaluating them based on factors like size and profitability, and selecting the best target segment. The document also discusses product positioning and different approaches to market segmentation used in Nepal, such as mass, niche, and customized marketing.

1. Concept of Marketing Segmentation
Levels of Market Segmentation
Bases for Segmenting Consumer Markets
Bases for Segmenting Organizational/Industrial
Markets
Segment Evaluation, analysis and selection
Product Positioning
Market Segmentation Practices in Nepal

2. Process of dividing the total market into large homogenous
groups of customers who share similar needs and
characteristics.
Ideas of directing products and services at specific target
groups.
“ Market Segmentation is the act of identifying and
profiling distinct groups of buyers who might prefer or
require varying products and marketing mixes.”
- Philip Kotler

3. Divide total market into smaller reachable segments.
Focus on specific group of customers.
Match product with needs and demand of target market.
Develop marketing mixes according to target market.

4.  Market opportunity identification : Product customer match, Profitable sector etc.
 Understanding of the customers
 To direct marketing programs : Targeted Advertising, create stronger marketing
messages.
 Strengthen Management capabilities : Cope with changing market demands.
 To assesses competitive strengths and weaknesses
 Systematic Planning
 Efficient allocation of marketing resources
 Marketing objectives assesement

5.  Increase in production cost : Product line
 Increase in marketing expenses : Promotion and communication
 Poor market coverage : segment size proportion to the market share
issue.
 Lack of resources : Different segment demand different mix of
resources
 High Risk

6.  Market Survey : Acquiring Information
Identification of market needs, customer motives, attitudes and behavior.
Source of assessment
Informal interviews, Formal questionnaire to sample of consumers
Information includes
The importance and rating given by customer about certain attribute.
People awareness of different complimentary brands.
Brand positioning situation
How, when and where and by whom the product is used.
Demographic, psychographic and media graphic profiles of the consumers.

7.  Segment Identification
Segment attractiveness, compatibility with the products is analyzed via different
statistical tools.
 Segment Profiling
Developing segment description based on psychographic , demographic and media
consumption.
Periodical assessment is necessary.
 Segment Evaluation
Reachability to such market segment.
Cost to enter on such segment.
The demand for products and services.
The competitive position of the firm in each segment.
Segment size and potential profit size.
Potential firm’s goals and objectives in the target market.

8.  Segment Selection
The best market segment is one that holds greater opportunities for the firm.
Opportunities in the terms of
Profits,
business firm’s image,
meeting firm’s goals & objectives,
strengthening firms competitive position in the market,
enhancing firm’s sustainability, etc.
 Developing a positioning strategy
Involves setting the strategies for how the product sits in the mind of target market
consumers.
The marketer needs to identify the attributes and images of each competitor’s
products and choose a position of its product for making the target market more
accessible.
 Focusing on Marketing program

9.  Measurability : Customer Size, needs, purchasing power and their characteristics.
 Divisible : Distinguishable and respond differently to different marketing mix
elements and programs.
 Market Potential : Should justify return of investment
 Substantial : Should be large and profitable enough to serve.
 Actionable : Should have the sufficient reason to take action like marketing
program.
 Accessibility : Should be sufficiently homogeneous in terms of geography,
demography and socio economic characteristics.
 Need : Should be in need of business offering and educate enough to want it.
 Demand : Economic ability capability.

10.  Mass Marketing
Ignores segment differences & goes after the whole market with one product.
Appropriate for consumers having same preference .
Largest potential market & low prices.
Difficult and expensive to reach mass audience.
Low spending on R&D, marketing research etc.
 Example:

11.  Segment Marketing
Dividing total market into several segments based on
Consumers buying behavior
Purchasing power
Demographic factors
socio cultural factors etc.
Examples:
North Indian Market South Indian Market Both the gender

12.  Niche Marketing
Markets to a narrowly defined customer group seeking a distinctive mix of
benefits within a segment.
Companies with limited resources or companies that wanted to adopt a very
exclusive marketing strategy adopt this strategy.
Achieves Strong market presence, specializes its production, distribution and
promotion, Understand customers needs so well that customer pays high, segment
leadership can earn a high return on its investment.
E.g. Richer Segment Sports Car Segment Small car segment

13.  Customized Marketing/individual Marketing
Marketing strategy concerned dealing with an individual customers.
Empowers customers to design products and services.
Employed by companies whose product are expensive or unique.
E.g
Dell Computer and electronics, Custom ink – Design T-Shirt online , Air Bus and
Boeing,

14.  Product Variety marketing
Non Segmented approach but try to match segmented customer’s need via various
product attributes of same product.
Provides Product option to the customers.
E.g. Jeep Compass with Non option, semi –option and full option
Wai wai Noodles with different flavors .
 Local Marketing
Focuses on a group of customers living in a particular geographic locations.
Marketing programs designed as per the local needs , local taste and preferences
etc.

15. Bases for segmenting consumer market
Geographic
-Region
-City
-Density
-Climate
-Topography
Demographic
-Age
-Family Size
-Family Life Cycle
-Gender
-Income
-Occupation
-Education
-Religion
-Social CLass
Psychographic
-Buying
Motives
-Personality
-Life Style
Behavioral
-Occasion
-Benefits
-Usage Rate
-Status of
Users
-Loyalty
-Attitude to
Product

16. Bases for segmenting Organizational Market
Geographic
-Location
-Climate and
Topography
Demographic
-Types of Business
-Size of the
Customer
Operating
-Technology
-Usage Rate
-Service Needs
Purchase Related
-Purchase
Organization
-Documentation
-Negotiation
Period

17.  Segment Attractiveness
Size & Growth
Long Term Profit – Profitability
Level of Competition
Technology
Customer Loyalty
Risk Analysis
 Organizational Objective & Resources
 Segment Relation: Inter- Relationships , Cooperation
 Ethical Consideration
 Government policies and Laws

18. Segment Analysis
Total demand of the product in the segment.
The market share of the competition.
The relative strength of the competition
The organizational resources
Possible marketing mix alternatives

19.  Market coverage pattern
Single Segment Coverage :
Multi Segment Coverage :
Full Market Coverage :
Market Specialization
Product Specialization
Niche Marketing

20.  Inter Segment Relation
 Segment Invasion Plan