Market Segmentation
Jeremy Kees, Ph.D.
Selecting and Serving Consumers
• Market Segmentation: the process of
dividing a market into distinct subsets
(segments) that behave in the same way or
have similar needs
• NOT to be confused with targeting and
positioning
Our overall intent is to…
1. Identify groups of similar customers and
potential customers
2. Prioritize the groups
3. Understand their behavior
4. Respond with appropriate marketing
strategies that satisfy the different
preferences of each chosen segment
To effectively segment a market,
remember SADAM
•
•
•
•
•
S Substantial
A Accessible
D Differential
A Actionable
M Measurable
We can segment a market by…
Geography
• Region of the world or country
• City or country size
• Climate
We can segment a market by…
Demographics
• age
• gender
• sexual orientation
• family size
• family life cycle
• household type
• income/expenditure patterns
• occupation
• education
• socioeconomic status
• religion
• nationality/race/ethnic group
• Oxygen.com – clearly an ad
directed at the female
segment
• Budweiser – most campaigns
target young males
We can segment a market by…
Psychographics
• personality
• lifestyle
• value
• attitude
• Tom’s of Maine
– Targeting a Specific
Marketing Segment
– Which segment?
• How about Kellogg's?
We can segment a market by…
Product Characteristics / Behavior
• benefit sought
• product usage rate
• brand loyalty
• product end use
• readiness-to-buy stage
• Which segment is Mabellene
trying to appeal to?
Segmenting based on one variable
usually is not good enough….