Market Segmentation for IBPS SO Marketing

Today onwards I am starting preparation series for IBPS SO Marketing Mains exam. Within next few days I will provide more useful study notes.

Market segmentation means segregating a market based on certain factor so that the marketers are able to evolve effective marketing policies and programmes.

The market is nothing but an aggregate of consumers of a particular product, it is quite possible that segments may occur within this whole heterogeneous (mixed/diverse) market. These segments are homogeneous (same/uniform) in characteristics on the basis of factors of segmentation.

There are essentially 5 types of segmentation:

(i) Geographic segmentation

Where markets are segmented on the basis of geographical factors such as location, climate, region, district, state, or urban/rural etc.

For example, marketers gain information whether a product is popular in a particular area because it is useful to them because of their climatic conditions or not. Cold creams and body lotions will always be useful in northern most and north east India as their climate is always cold!

(ii) Demographic segmentation

Demographic segmentation: is based on factors such as age, gender, race, religion, community, income/occupation, family size, education, social status etc.

If a premium brand of imported perfumes is to be marketed, then it should be strategically marketed in metro cities and towards high-income people!

(iii) Psychographic segmentation

Psychographic segmentation: is a person’s (in this case consumers) personal behaviour based. Factors are style preference, attitude, lifestyle values etc.

Who would want to buy a Rs.50, 000, gold plated, Park Avenue fountain pen?

The SRKs and Amitabh Bachhans!

(iv) Price segmentation

Price segmentation: is based on consumer’s income and spending capacities.

The market segment of Audi and Renault cars will be different from the market segments of Nano cars!

Thus based on the price of goods, marketers segment their consumer base to gain a better understanding towards creating a beneficial marketing strategy!

(v) Buyer behaviour

How often/frequently do buyers buy a certain product? Are the buyers loyal towards brands?

Based on these factors too, marketers take important marketing decisions.

No advertising needed for bread/sugar/milk – why? – because these are daily use, essential commodities with high demand. Here users buy locally available bread/milk and competition does not matter.

On the other hand, body soaps of every type and company are heavily advertised, because they are essential commodities not bought daily (even though used) with heavy competition in the market! And brand loyalty keeps changing very frequently!

Sometimes it is Lux and sometimes it is Dove!

Market segmentation is an important practice undertaken by marketing executives of companies; it not only ensures successful marketing of their products, but ensures other important things such as consumer base, brand loyalty and ultimately profitability.

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