MARKET SEGMENTATION Business Marketing September 27, 2021

Summary

The video lesson explores Chapter 3 on Market Segmentation, Targeting, and Positioning. It explains how companies divide markets into distinct groups based on demographics, geography, psychographics, and behavioral responses to better understand and satisfy customer needs. The lesson provides real-world examples, from breakfast preferences worldwide to consumer behavior in promotions and luxury services. It also covers market targeting, emphasizing the importance of selecting segments a company can serve effectively, and product positioning, highlighting strategies to make products appealing and memorable to the target market. Overall, the session provides practical insights into tailoring marketing strategies for maximum impact.

Takeaways

• 😀 Market segmentation is the process of dividing a market into distinct groups where each group shares common characteristics to better meet customer needs.
• 😀 Demographic segmentation divides the market based on age, gender, income, education, nationality, religion, and family life cycle.
• 😀 Geographic segmentation divides the market based on location, such as regions, cities, or countries, affecting consumer preferences and behaviors.
• 😀 Psychographic segmentation classifies consumers according to lifestyle, personality, and social class, influencing brand and product choices.
• 😀 Behavioral segmentation focuses on consumers' knowledge, attitudes, and responses to products, including reactions to promotions, discounts, and seasonal offers.
• 😀 Market targeting involves selecting the most attractive and feasible segment a company can serve, considering resources, management skills, and capital.
• 😀 Product positioning is creating a favorable perception of a product in the minds of the target market through advertising, promotions, and highlighting key features.
• 😀 Effective positioning emphasizes the product's benefits, price, accessibility, or brand value to differentiate it from competitors.
• 😀 The STP process (Segmenting → Targeting → Positioning) ensures businesses allocate resources efficiently and tailor marketing strategies to the right audience.
• 😀 Real-world examples illustrate segmentation and targeting: Pampers for mothers, Champion detergent for budget-conscious consumers, Starbucks for higher social classes, and global breakfast preferences based on location.

Q & A

What is market segmentation and why is it important?

Market segmentation is the process of dividing a market into distinct groups of customers with common characteristics. It is important because it allows businesses to focus their efforts on specific segments, satisfying their unique needs, instead of trying to sell a product to everyone.

What are the main types of market segmentation discussed in the transcript?

The main types are demographic segmentation, geographic segmentation, psychographic segmentation, and behavioral segmentation.

Can you give an example of demographic segmentation from the transcript?

Yes, Pampers targets parents of babies, considering price sensitivity and product design appealing to mothers, while feminine products target females specifically.

How does geographic segmentation affect product preferences?

Geographic segmentation divides the market based on location, such as regions or countries. Preferences for products, especially food, vary significantly based on culture, climate, and local habits, as shown by different breakfast types across Europe, Asia, Africa, and America.

What is psychographic segmentation and what examples were given?

Psychographic segmentation divides the market according to lifestyle, personality, or social class. Examples include Starbucks targeting consumers who value brand and social status, fitness services targeting health-conscious individuals, and golf clubs targeting wealthy people.

What is behavioral segmentation and how does it influence marketing?

Behavioral segmentation divides the market based on customer knowledge, attitudes, or responses to a product. It influences marketing by showing how consumers react to promotions, discounts, loyalty programs, and seasonal offers.

What is market targeting and what factors should a company consider?

Market targeting is selecting the most attractive segment a company can serve effectively. Companies should consider their resources, management skills, capital, and research capabilities to ensure success in serving the chosen segment.

What is product positioning and why is it important?

Product positioning is creating a perception in the target market that a product is the best choice among competitors. It is important because it helps customers recognize the product's unique benefits, differentiates it from competitors, and supports brand equity.

How do companies use promotions in behavioral segmentation?

Companies use promotions like discounts, happy hours, seasonal sales, and loyalty programs to influence customer purchasing behavior. Customer responses to these promotions vary depending on preferences and spending habits.

What is the relationship between segmentation, targeting, and positioning (STP)?

STP is a sequential marketing process: first, a company segments the market into meaningful groups; second, it targets the most attractive segment; third, it positions its product to create a favorable perception in the minds of the target audience.

Can brand equity affect product positioning?

Yes, strong brand equity can enhance product positioning. For example, Jollibee products are perceived as delicious and reliable due to the brand’s reputation, making it easier to successfully position new products under the same brand.