Week-2 Masterclass - Market Opportunity - Saurabh Chaubey - Types of Market Segmentation

Summary

This video script delves into market segmentation strategies, focusing on demographic, geographic, psychographic, and behavioral factors. It illustrates how brands like Coca-Cola and McDonald's tailor their offerings based on geographic preferences, while channels like Cartoon Network and MTV target different age groups. The script also discusses how psychographics, such as values and attitudes, influence consumer choices, exemplified by Rolls-Royce appealing to achievers and Tesla to innovators. Behavioral segmentation is highlighted through examples like Indigo's low-cost airline model and Big Basket's discount offers, emphasizing the importance of understanding consumer actions to effectively segment markets.

Takeaways

• 🌐 Geographic segmentation involves tailoring products to suit regional tastes and preferences, such as Coca-Cola offering different beverages in India like Thumbs Up.
• 👥 Demographic segmentation targets specific age groups, genders, and other characteristics, influencing the choice of TV channels or products accordingly.
• 🧠 Psychographic segmentation classifies consumers based on their attitudes, values, and motivations, helping brands like Rolls-Royce and Tesla target specific customer profiles.
• 🛒 Behavioral segmentation examines how and why consumers make purchase decisions, which can influence strategies for brands like Indigo airlines and Ola cabs.
• 🏡 Geographic customization is crucial for global brands to cater to local tastes, as McDonald's does by offering the McAloo Tiki, a unique product for the Indian market.
• 📺 Demographic targeting is evident in TV channels that cater to different age groups, from Cartoon Network for kids to business channels for professionals.
• 🚀 Innovators and thinkers are more likely to be targeted by technology-focused brands like Tesla, showcasing the importance of psychographic data in marketing strategies.
• 📈 Behavioral segmentation helps in understanding customer preferences for cost, convenience, and occasional purchases, which is vital for companies like BigBasket and gold jewelry brands during festivals.
• 💡 The script illustrates how market segmentation is crucial for product introduction and marketing, using examples from various industries like FMCG, technology, and education.
• 🌟 A comprehensive approach to market segmentation considers geographic, demographic, psychographic, and behavioral factors to effectively target and satisfy consumer needs.

Q & A

What are the four types of market segmentation discussed in the script?

The four types of market segmentation discussed are demographic, geographic, psychographic, and behavioral.

How does geographic segmentation influence product offerings?

Geographic segmentation influences product offerings by requiring customization based on regional tastes and preferences. For example, Coca-Cola offers different beverages in different countries, such as Thumbs Up in India.

What is a demographic segmentation example provided in the script?

An example of demographic segmentation is the targeting of different TV channels based on age groups, like Cartoon Network for kids, MTV for young adults, and business channels for those in the job or business sector.

How does psychographic segmentation categorize consumers?

Psychographic segmentation categorizes consumers based on their values, attitudes, motivations, and lifestyles. Examples include innovators, thinkers, achievers, and believers, each targeted by brands that align with their characteristics.

What is an example of behavioral segmentation in the script?

An example of behavioral segmentation is the preference for low-cost airplane carriers, which Indigo targets by offering low-priced tickets.

How does the script suggest addressing the behavioral challenge of high-priced online coaching?

The script suggests addressing the behavioral challenge of high-priced online coaching by offering installment plans or tying up with banks and financial institutions to finance the fees.

Why is it important to consider geographic segmentation when launching a product?

Geographic segmentation is important because it helps in tailoring the product to the tastes and preferences of consumers in different regions, which can lead to better acceptance and sales.

How does demographic segmentation help in targeting TV channels?

Demographic segmentation helps in targeting TV channels by identifying the age group of the audience and creating content that appeals to their interests and needs.

What role does psychographic segmentation play in brand targeting?

Psychographic segmentation plays a crucial role in brand targeting by identifying consumers' values, attitudes, and lifestyles, allowing brands to connect with them on a more personal and meaningful level.

How does behavioral segmentation affect the marketing strategy for Ola cabs?

Behavioral segmentation affects the marketing strategy for Ola cabs by identifying different customer behaviors, such as regular users, occasional users, and those who prefer app-based services, allowing Ola to tailor its offerings accordingly.

What is the significance of understanding market segmentation for a new product launch?

Understanding market segmentation is significant for a new product launch because it helps in identifying the target audience, tailoring the product to meet their needs, and developing effective marketing strategies to reach them.

Outlines

00:00

📊 Market Segmentation Overview

The speaker introduces the concept of market segmentation, focusing on four key qualities: demographic, geographic, psychographic, and behavioral. Demographic segmentation considers age, gender, and other personal characteristics. Geographic segmentation looks at where people live, such as country, state, or city, and how it influences product offerings. Psychographic segmentation delves into consumer mindsets, values, attitudes, and motivations. Behavioral segmentation examines how and why consumers make purchasing decisions. The speaker provides examples of how brands like Coca-Cola and McDonald's adapt their products based on geographic preferences and how TV channels target different age groups based on demographic data.

05:03

🌐 Geographic and Demographic Segmentation Examples

The speaker elaborates on geographic segmentation with the example of Coca-Cola, which offers region-specific beverages like 'Thumbs Up' in India, adapting to local tastes. McDonald's is highlighted for creating a unique product for the Indian market, 'McAloo Tikki', showcasing how geography can dictate product introductions. Demographically, TV channels are used as an example to target different age groups, from Cartoon Network for children to business channels for working adults, and channels like 'SAR ASA' for the elderly, demonstrating how demographic characteristics define consumer preferences.

10:05

🧠 Psychographic Segmentation and Consumer Mindsets

Psychographic segmentation is discussed with categories like innovators, thinkers, achievers, and others, each with distinct qualities that make them targets for specific products. For instance, achievers might be attracted to luxury brands like Rolls-Royce, while innovators might be interested in the latest technologies from companies like Tesla. The speaker also touches on how different people's attitudes towards dating apps like Tinder can influence market segmentation, with some preferring traditional methods over digital platforms.

🛒 Behavioral Segmentation and Consumer Actions

Behavioral segmentation is explored through examples of how customer preferences for low-cost services have led to the success of budget airlines like Indigo. The speaker also discusses how different customer behaviors, such as regular use of Ola for commuting or occasional use for special occasions, can influence market strategies. BigBasket's discount offerings cater to cost-sensitive customers, while the purchase of gold during festivals or marriages is an example of occasional buying behavior. The segment also covers how some customers may be decision-makers or followers of experts, which is crucial for understanding market segmentation.

🎯 Identifying Market Segments for a Product Launch

The speaker concludes with a practical approach to identifying market segments for launching a product, using the example of an online engineering coaching platform. Geographic segmentation involves choosing the right language to cover the desired geographical area. Demographic segmentation focuses on the target audience, which in this case is students in grades 9-12, with parents as the customers. Psychographic segmentation targets those comfortable with online learning and technology. Behavioral segmentation addresses the challenge of convincing Indian parents to invest a significant amount in online coaching, which is overcome by offering installment payment plans through financial institutions.

Keywords

💡Market Segmentation

Market segmentation is the process of dividing a broad consumer or business market into sub-groups based on shared characteristics. In the video, four types of segmentation are discussed: demographic, geographic, psychographic, and behavioral. The video uses examples like Coca-Cola and McDonald's to explain how companies tailor products to different market segments based on these characteristics.

💡Demographic Segmentation

Demographic segmentation refers to dividing the market based on characteristics such as age, gender, income, education, and family size. The video explains how different TV channels target specific age groups, with examples like Cartoon Network for kids and business channels for working professionals. This segmentation helps brands align their products with specific audience needs.

💡Geographic Segmentation

Geographic segmentation involves dividing the market based on location, such as country, state, or city. The video illustrates how Coca-Cola adjusts its products for different regions by acquiring local brands like Thums Up in India or how McDonald's sells region-specific items like McAloo Tikki in India to cater to local tastes.

💡Psychographic Segmentation

Psychographic segmentation focuses on dividing the market based on lifestyle, values, attitudes, and personality traits. The video provides examples of how brands target consumers based on these factors, such as Rolls-Royce appealing to 'achievers' who value success or Tesla targeting 'innovators' interested in cutting-edge technology.

💡Behavioral Segmentation

Behavioral segmentation is based on consumer behaviors, such as purchase decisions, brand loyalty, or usage rates. The video discusses how low-cost airlines like Indigo target price-sensitive customers, while Ola segments customers based on their usage patterns, such as daily commuters or occasional users.

💡Customization

Customization in marketing refers to tailoring products to meet the specific needs of different segments. In the video, examples like Coca-Cola’s region-specific beverages and McDonald's unique menu items in different countries highlight how customization based on geographic or cultural preferences helps brands succeed in diverse markets.

💡Innovators

Innovators are individuals who are early adopters of new technology and ideas. The video uses Tesla as an example of a brand that targets this psychographic segment, appealing to customers who are excited about the latest technological advancements and want to be at the forefront of innovation.

💡Achievers

Achievers are a psychographic group characterized by their desire for success and status. In the video, Rolls-Royce is cited as a brand that appeals to achievers, as these individuals are willing to spend large amounts of money on luxury items that symbolize their achievements and social status.

💡Occasional Buying Behavior

Occasional buying behavior refers to purchases made during special events or specific occasions. The video mentions how companies target this behavior, such as gold retailers offering products during festivals or weddings, when customers are more likely to make high-value purchases.

💡Consumer Decision-Making

Consumer decision-making refers to the process by which consumers choose what products to buy. The video discusses various factors that influence this, such as personal preference, expert recommendations, or external factors like pricing and convenience. An example is how customers decide on cement brands based on their contractor’s advice rather than personal choice.

Highlights

Market segmentation is based on four qualities: demographic, geographic, psychographic, and behavioral.

Demographic segmentation considers age, gender, and other demographic qualities of the target audience.

Geographic segmentation involves tailoring products to the tastes and preferences of different regions or countries.

Psychographic segmentation is connected to consumers' thoughts, values, attitudes, and motivations behind their actions.

Behavioral segmentation focuses on how and why consumers make purchase decisions.

Coca-Cola customizes its beverages based on geographic segmentation, such as offering Thumbs Up in India.

McDonald's introduced the Maharaja Mac, a unique product for the Indian market, based on geographic considerations.

TV channels like GTV adapt to geographic segmentation by offering content in different languages for various Indian states.

Demographic segmentation is evident in TV channels targeting different age groups, like Cartoon Network for kids and business channels for professionals.

Psychographic segmentation categorizes consumers into groups like innovators, thinkers, achievers, and drivers, each with distinct qualities.

Rolls-Royce targets achievers with high-priced luxury cars, showcasing success and status.

Tesla attracts innovators interested in the latest technology with its electric vehicles.

Unacademy targets thinkers with its educational platform, appealing to those who value knowledge and self-improvement.

Tinder's market segmentation focuses on consumers who prefer using apps for dating, reflecting psychographic preferences.

Behavioral segmentation is seen in Indigo's low-cost airline model, targeting cost-sensitive customers.

Ola caters to different customer behaviors, from regular users to those who occasionally use ride-hailing services.

Big Basket targets cost-sensitive customers by offering discounts and appealing to occasional buyers during festivals.

Market segmentation strategies help businesses identify and target specific customer groups more effectively.

Transcripts

[Music]

now how we do the segmentation to do the

segmentation we basically look at the

four different kind of qualities the uh

the if if you look at the the picture

the one is about the demographic about

people uh what age gender uh what kind

of uh the bring demographic qualities

they bringing then Geographic if you

look at the the downside which country

state or city you are living in

psychographic this psychographic is

connected to you how you think and how

what what the values attitude

motivations is is basically behind your

actions and then the fourth one is the

behavioral and so behavior is about what

qualities like what how and why you make

a decision of purchase of any

product I have listed down some of the

parameters of all this four uh types of

Market segmentation which you look at

that so you can look at the detail of

all of them uh I will look I will take

you through some of the examples with

the brands start with the geographic

Market segmentation so you can see that

the Coca-Cola is a brand it's a global

brand right they're present in each

almost uh in each of the country but you

see that they have different beverages

uh they have some common Beverages and

then they have some specific beverages

for a particular country like for

example in India they have a unique they

acquired a unique brand thumbs up

because each country even some each

state has a different taste so based on

the geography you may need to change

your product the customization like the

way mcdonal did so Mech ALU tii is a

unique product which is being sold in

India which actually was made for India

so that is how the geography uh in the

many cases decide what product you are

going to introduce for example you can

see also the TV channels uh the g g news

or G Channel GTV is present in almost in

all the state of India but different

languages because every state has

different language to to speak on that's

how geography may decide what the

product you you are going to bring in

then let's talk about the demographic so

demography let's for take an example of

that characteristic age and you can see

that there different TV channels here so

based on your age uh different channels

are going to Target you uh for a kid

Cartoon Network for a young person uh

MTV maybe a person who is into job or

into business he would prefer to watch G

business or any business channel news

channels and a person who is now in an

old age retirement age you would prefer

to watch some uh Channel like SAR ASA

those kind of channels where like he

wants to gain the the other

knowledges so that's the example so

that's how the demography can Define

even the YouTube uh so definitely uh

this can't be a 100% rule for each and

everything but uh what we look at while

we doing while doing the market

segmentation we look at the common

characteristic which most of the people

in that group

shared that is what something we target

for now we look at the psychographic uh

Market segmentation so on the left you

can see that the different like we have

identified category segmented people in

different categories we termed some of

them as innovators thinkers Achievers

experiencer believer drivers makers

survivors now each one of them have a

different set of qualities in them and

that makes them Target for different

products for a person who is an achiever

right he is a target for brand like

Rolls-Royce who is going to give money

like 10 CR or 15 CR for a car somebody

who is highly successful in his career

who has a sense of being achiever

that guy would love to have a r stri to

Showcase his success right who is who

will be uh the Target customer for Tesla

somebody who is interested to know who's

who's looking forward to go ahead with

the latest Technologies somebody who is

actively looking into technology and

that is innovators right somebody who is

who would be a target for unacademy like

the the portal the at Tech portal

somebody like a thinker somebody who

would be driver who wants to do things

uh so that's how uh the customer for

anadem like of course you can see that

also for app like Tinder not everyone is

going to be their customer there will be

people who would prefer to use an app to

go for a date but there are other people

who may not like the idea of using an

app to go for a date they would prefer a

face tof face uh method of the old way

of doing going for dating so that's how

psychography decide the market

segmentation now look at the behavioral

aspect of that so

now let me take you uh to the each of

the brand like Behavior how Behavior Uh

impact the market segmentation there are

customer who would prefer a lowcost

airplane carriers right and that's where

the Indigo goes they want they they

started to offer low price tickets and

capture those customer customers right

then there are a customer who maybe uh

for Ola there can be different kind of

customer there may be a person who's a

regular user office goer or a college

student who regularly use Ola there will

be a person who occasionally use one or

two time he he might use Ola somebody

who is uh good with using app so he's of

course definitely a target for olola but

somebody who is not into a smartphone

doesn't like to use a smartphone for

anything so might not be interested in

that person uh similarly with the big

basket now there are people who prefer

to get discounts they like the idea so

this all companies may think to cat

those cost sensitive customer by

offering like big basket off for

Discount and those things that there are

occasionally buying Behavior like

marriages or festivals we plan to buy

gold that's when tus tap to those

customers this is the occasional

Behavior now you may look at the

customers who are going to buy who who

is going to build his home but he's not

going to decide which brand of cement

he's going to use his engineer or the

contractor will decide so the person

might be the decision maker the customer

might be a decision maker or he might be

a follower of another expert so that is

also the behavioral category of uh

deciding the market

segmentation now when you identify that

the who is your Market segment right you

have a product mightbe you let's take an

attech product so I have been from the

ad tech industry so how I used to do

that so for me uh I if I'm planning to

launch uh an engineering uh coaching

online coaching then how I will do that

the classification based on this four

criteria the first thing Geographic so I

will decide the language which will

cover the most of the geography I I have

to see that the the language with which

I am making a product how much geography

it is covering so if I use English I may

go to a large extent to the

urban the India but I may decide to go

out with the vernacular languages also I

may use Hindi or Bengali or udia if I

want to go more deeper into Tire two or

Tire three cities structure right then

uh demography so I'm very clear about

who was going to use an i coaching right

the consumer will be uh the student who

is in 9th 10th 11th 12th the important

part is 11 12th and then maybe the

droppers but the customer will be their

parents who who are going to buy that

coaching online coaching subscription

for their kids right then what are the

psychographic characteristic who wants

to use that right those who are ready to

use uh online products who are savy with

technology who are comfortable maybe uh

introverts people who are you know can

sit on a their chair for a long time

they are self-disciplined this kind of

people are my uh Target

customer and then of course the

behavioral thing now behavioral thing

you might have seen uh BYU and all uh

the topper it's a very interesting case

study in itself uh on a behavioral part

when this all coaching online coaching

apps came up they were like in a range

of 40,000 45,000 per year so normally

Indian parents cannot have that much

money to spend on a single time thing so

that was a behavioral challenge for this

products this apps that how to get 40 40

5,000 from Indian parents so what what

they did they break it up in a emis that

they gave offer that okay you can give

this on an Emi basis they're tied up

with the banks and financial institution

to uh Finance those fees so that these

are the that's how we basically segment

our

[Music]

Market