Sebastian Perrier

The division of a market into different groups of people with similar characteristics is known as market segmentation. Segmentation makes it possible for firms to tailor the marketing mix for specific target markets, thus better satisfying customer needs.

A market segment should be:

• homogeneous within the segment (exhibits common needs)
• heterogeneous between segments (different segments have different needs)
• measurable and substantial
• accessible by communication and distribution channels
• different in its response to a marketing mix
• durable (not changing too quickly)
• substantial enough to be profitable

Segmentation variables:

• Geographic variables (region or country, country size, density of area, climate, etc)
• Demographic variables (age, gender, education, income, occupation, socioeconomic status, religion, nationality/race, language, etc)
• Psychographic variables (personality, life style, value, attitudes, etc)
• Behavioral variables (benefit sought, product usage rate, brand loyalty, product end use, readiness-to-buy stage, profitability, etc)
• Technographic variables (motivations, usage patterns, attitudes about technology, fundamental values, lifestyle perspective, standard of living, etc)
• Customer type (size of the organization, industry, position in the value chain, etc)
• Buyer behavior (loyalty to suppliers, usage patterns, order size, etc)

There are 6 main steps in the Marketing Analysis:

1. Market Analysis (company, context, collaborators, competitors and context)
2. Value Creation (Segmentation, Selection of Target Segment and Positioning)
3. Marketing Mix=positioning=4p’s (product, place, promotion and price)
4. Value Capture (customer acquisition and customer retention)
5. Messure (customer satisfaction, advertising ROI, financial results, etc)
6. Sustain Value (build brand equity, innovate and new product development)

Marketing Management Framework