Page 108 - DMGT408DMGT203_Marketing Management

Unit 5: Designing a Customer-driven Strategy .......

a distinct and somewhat complex set of needs. A niche market is smaller in size but may prove Notes
to be quite profitable if served properly. Consumers in a niche are ready to pay a premium to
the marketer who best satisfies their needs.

Example: G4 Power Mac computers serve the needs of a niche market, while PCs serve
rather large market segments.

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.

5.2 Bases for Segmentation

Selecting the right segmentation variable is critical. For example, small car producers might
segment the market on the basis of income but they probably would not segment it on the basis
of political beliefs or religion because they do not normally influence consumers’ automobile
needs. Segmentation variable must also be measurable to segment the market accurately.

Example: Segmenting the market on the basis of intelligence would be difficult because
this characteristic cannot be measured accurately.
Marketers can use one or more variables to segment the market. Different variables are used to
segment consumer markets. They are discussed in following subsections.
5.2.1 Geographic Segmentation

Geographic location of consumers is usually the starting point of all market segmentation
strategy. The location of consumers does help the company in planning its marketing offer.
These geographic units may be nations, states, regions, areas of certain climatic conditions,
urban and rural divide. The assumption is that consumers in a particular geographic area have
identical preferences and consumption behaviour.

Example: People in West Bengal have different food habits and dress code than people
in South India. Exporters often segment the market as Western countries, African countries and
CIS countries etc.

5.2.2 Demographic Segmentation

Demographic characteristics are commonly used to segment the market. Factors such as age,
sex, education, income, marital status, family size and social class etc. are used singly, or in a
combination, to segment a market. Shaving products for women are based on the demographic
variable of gender. Toy manufacturers such as Funskool and Mattel toys segment the market on
the basis of age of children. Auto manufacturers segment the market by considering income as
an important variable. Producers of refrigerators, washing machines, microwave ovens etc.
take income and family size as important variables in segmenting the market. Ready-to-wear
garment producers often segment the market on the basis of social class.

Example: Chirag Din, Arrow, Van Heusen, Louis Philippe, Levi and others.

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