Page 236 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Unit 9: Segmentation, Targeting and Positioning

Notes
Example: There are distinct groups of auto buyers. One group might be more interested
in economy, the other in safety and still another in status etc.
Segmentation bases, such as demographics are descriptive. These variables are useful but do not
consider why consumers buy a product. Benefit segmentation has the potential to divide markets
according to why consumers buy a product. Benefits sought by consumers are more likely to
determine purchase behaviour than are descriptive characteristics.

Benefit segmentation can be seen in the toothpaste market; fresh breath, decay prevention and
whiter teeth are some examples and the brands involved are Colgate Total, Close-Up and
Promise etc.

Demographic-psychographics Segmentation (Hybrid Approach)

Demographic and psychographic profiles work best when combined together because combined
characteristics reveal very important information about target markets.
Demographic-psychographics information is particularly useful in creating consumer profiles
and audience profiles. Combined demographic-psychographic profiles reveal important
information for segmenting mass markets, provide meaningful direction as to which type of
promotional appeals are best suited and selecting the right kind of advertising media that is
most likely to reach the target market.

Example: Cosmetics companies first divide the market on the basis of gender, then age
and then according to their lifestyle, they target people with different brands.

Geo-demographic Segmentation (Hybrid Approach)

This approach is based on the premise that people who live close to one another are likely to
have similar economic status, tastes, preferences, lifestyles and consumption behaviour.
Geodemographic segmentation is particularly useful when a marketer is capable of isolating its
prospects with similar personalities, goals, interests and in terms of where they live. For products
and services used by a wide cross-section of society, this approach may not be suitable.

Task Collect three advertisements for:
1. consumer non-durable product
2. consumer durable product, and a service product
3. Determine what segments the ads are directed at

Self Assessment

Fill in the blanks:

1. For segmentation, the market should be …………………….
2. A narrowly defined group of consumers with complex set of needs is called …………………
market.

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