One would perhaps agree all products and services could not be developed for mass segment. For effective marketing strategy, segmentation has to be carried out based on Demographic, Psychographic, Behaviouristic and Geographic parameters. Market segmentation could be defined as segregating a consumer market into distinct groups with differentiated needs, characteristics or behaviour who might be looking for differentiated products or a mix of products.
Demographic segmentation could be based on age, gender, income or occupation whereas Psychographic segmentation consists of Life-style, social class and personality. Some of the behaviouristic pattern could be attributed to impulse buyers, analytical, first movers, crowd followers, techno-savvy and personal touch. Geographic segmentation could be based on contingents, countries, cities, regions, metro, urban, semi-urban and rural criterion. Business markets and International markets would follow a separate set of parameters for segmentation. An effective segmentation has to be measurable, accessible, large enough, differential and actionable.
Post segmentation of market, target segment has to be identified, which will have common needs or characteristics based on which company might decide to develop a product and serve that segment. While evaluating market segments for target marketing, one has to examine the size of the market, growth potential, level of competition, substitute products, power of buyers and dominance of suppliers. The company has to decide selecting an undifferentiated market segment for mass product, differentiated market for segmented product, concentrated market for niche product and micro-market for local product.
Positioning is placing the product in consumers mind such that it occupies a considerable space relative to competitive products. The Positioning is based on attributes, unique benefits, differentiation and perception about the product. It is essential to communicate positioning of the product to the consumers where value proposition delivery has to be ascertained. Positioning must be monitored over a period of time and reviewed periodically.
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