Page 132 - DMGT510_SERVICES_MARKETING

Unit 7: Service Segmentation and Targeting

5. Which of the following statement is not true? Notes

(a) Markets can be segmented on the basis of climatic conditions
(b) Markets can be segmented on the basis of status of the user
(c) Marketers can target multiple segments simultaneously
(d) Marketers can use only a single base for segmenting a market
6. Which of the following is not an attribute used to segment the market under behaviouristic
segmentation?
(a) Occasion
(b) Education

(c) User frequency
(d) Attitudes

7.3 Steps in Market Segmentation

Marketers use the following procedure for segmenting the markets:

7.3.1 Identifying Customer Segments

The first step in the process of market segmentation is to identify the customer segments using
any of the bases discussed above or a combination of the bases. Customers can be identified on
the basis of geographies, demographics, psychographics, or behaviouristic characteristics. The
marketer should determine the basis for segmentation based on the area of business.

Example: If the marketer is in the business of insurance, he can opt for demographics or
behaviouristic characteristics (benefits) as a basis for segmentation. In this case, using geographies
might not be a very good option.

Identifying customer segments helps the marketers in designing, promoting, delivering or
pricing the service for each segment. It basically helps them in identifying the marketing mix
for each segment.

Example: When hospitality services firm segments the market based on income and
lifestyles and realizes that more and more upper middle class and upper class families are
opting for their services; it can plan to cater to this segment by opening a spa and health gym
facilities.
Each segment may have different preferences - while some may be price oriented, others may be
quality or brand oriented. Therefore, marketers should find the existing similarities in the
purchasing patterns of the target segments.

7.3.2 Develop Measures for Attractiveness

The second step involves analyzing the segments identified in the first step on the basis of their
size, growth potential, profitability and the purchasing power. Analyzing each segment on
these bases will help the marketers to choose and invest in those segments which have great
potential to produce profits for the firm in future.

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