INTERNATIONAL MARKET SEGMENTATION
Market segmentation is the process in marketing of dividing
a market into distinct subsets (segments)
that behave in the same way or have similar needs. Because each
segment is fairly homogeneous in their
needs and attitudes, they are likely to respond similarly to a
given marketing strategy. That is, they are
likely to have similar feelings and ideas about a marketing mix
comprised of a given product or service,
sold at a given price, distributed in a certain way, and
promoted in a certain way.
Broadly, markets can be divided according to a number of general
criteria, such as by industry or public
versus private sector. Small segments are often termed niche
markets or specialty markets. However, all
segments fall into either consumer or industrial markets.
Although it has similar objectives and it
overlaps with consumer markets in many ways, the process of
Industrial market segmentation is quite
different.
The process of segmentation is distinct from targeting (choosing
which segments to address) and
positioning (designing an appropriate marketing mix for each
segment). The overall intent is to identify
groups of similar customers and potential customers; to
prioritise the groups to address; to understand
their behaviour; and to respond with appropriate marketing
strategies that satisfy the different
preferences of each chosen segment.
Improved segmentation can lead to significantly improved
marketing effectiveness. With the right
segmentation, the right lists can be purchased, advertising
results can be improved and customer
satisfaction can be increased.
Basis for segmenting consumer markets:
Geographic
– nations,
regions, states, counties, cities, neighborhoods, climate, population density
etc.
Demographic
– age, gender,
family size, family life cycle, income, occupation, education, religion, race,
nationality etc.
Psychographic
– social class,
lifestyle, personality etc.
Behavioral
– purchase
occasion, benefits sought, user status, user rate, loyalty status, readiness
status, attitude
toward product etc.
Basis for segmenting business markets:
•
Demographics
– industry,
company size, location
•
Operating
variables
– technology,
user/non-user status, customer capability
•
Purchasing
approaches
– purchasing
function organization
– power
structure
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– nature of
existing relationships
– general
purchase policies
– purchasing
criteria
• Situational
factors
– urgency,
specific application, size of order
• Personal
characteristics
– buyer-seller
similarity, attitudes towards risk, loyalty
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