Principles of segmenting target markets. Basic principles of consumer market segmentation Behavioral principle of market segmentation

Principles of market segmentation

Market Segmentation Strategies

Market Segment Assessment

Principles of market segmentation

It is quite understandable and natural that every manufacturer wants to create and sell products that can satisfy the maximum number of consumers. But in real life this is hardly possible, since consumers have different attitudes towards the same product, use it differently, and most importantly, purchase it for different reasons.

For this reason, it seems advisable to divide the market into separate segments in accordance with the motivation of consumers and their specific characteristics. The process of market segmentation is the division of customers or a market into populations of people with similar needs for a particular product or service, sufficient resources, and the willingness and ability to buy.

Segmentation gives a company the opportunity, instead of a ruinous struggle with competitors, to more effectively serve a particular market segment.

Today, there is no single method of market segmentation. For this reason, firms and their marketing services

should consider and test segmentation options based on different parameters or principles. These include the basic geographical, demographic, psychographic and behavioral principles most often used in segmenting consumer markets.

Geographical principle. It involves dividing the market into different geographical units: states, regions, regions, cities, districts. Typically, any company begins its business by choosing a geographical location. It must decide where to act - in one or more areas of the city, throughout the city, in one or more regions, on a national or international scale. In this case, the company must clearly understand the climate in the selected locations, population density, and preferences inherent in urban and rural populations.

Demographic principle. This principle consists of dividing the market into groups according to parameters such as gender, age, family size, stage of the family life cycle, income level, occupation, education, religious beliefs, nationality. Such parameters are most often used in segmentation because they are related to the needs and preferences of consumers, and in addition, they are the easiest to measure compared to other parameters.

Psychographic principle. Customer segmentations are divided into groups based on social class, lifestyle, and personality characteristics. This is because members of the same demographic group can display completely different psychographic traits. Thus, belonging to a particular social class greatly affects a person’s preferences in relation to various goods, services, choice of retail outlets, etc. For this reason, many firms plan their activities by producing goods and services based on representatives of a particular public class.

Behavioral principle. Many experts believe that the use of behavioral parameters is the most appropriate basis for the formation of market segments. These parameters include the reason for making a purchase, the benefits sought, the status of the user, the intensity of consumption, the degree of commitment and readiness to perceive the product and attitude towards the product.

Principles of market segmentation - concept and types. Classification and features of the category “Principles of Market Segmentation” 2017, 2018.

Market Segmentation Strategies

Market Segment Assessment

Principles of market segmentation

It is quite understandable and natural that every manufacturer wants to create and sell products that can satisfy the maximum number of consumers. But in real life this is hardly possible, since consumers have different attitudes towards the same product, use it differently, and most importantly, purchase it for different reasons.

Therefore, it seems appropriate to divide the market into separate segments in accordance with the motivation of consumers and their specific characteristics. The process of market segmentation is the division of buyers or a market into populations of people with similar needs for a particular product or service, sufficient resources, and the willingness and ability to buy.

Segmentation gives a company the opportunity, instead of a ruinous struggle with competitors, to more effectively serve a particular market segment.

Currently, there is no single method of market segmentation. Therefore, firms and their marketing services

should consider and test segmentation options based on different parameters or principles. These include the basic geographical, demographic, psychographic and behavioral principles most often used in segmenting consumer markets.

Geographical principle. It involves dividing the market into different geographical units: states, regions, regions, cities, districts. Typically, any company begins its business by choosing a geographical location. It must decide where to act - in one or more areas of the city, throughout the city, in one or more regions, on a national or international scale. In this case, the company must clearly understand the climate in the selected locations, population density, and preferences inherent in urban and rural populations.

Demographic principle. This principle consists of dividing the market into groups according to parameters such as gender, age, family size, stage of the family life cycle, income level, occupation, education, religious beliefs, nationality. Such parameters are most often used in segmentation because they are related to the needs and preferences of consumers, and in addition, they are the easiest to measure compared to other parameters.

Psychographic principle. Customer segmentations are divided into groups based on social class, lifestyle, and personality characteristics. This is because members of the same demographic group can exhibit completely different psychographic traits. Thus, belonging to one or another social class greatly affects a person’s preferences in relation to various goods, services, choice of retail outlets, etc. Therefore, many firms plan their activities by producing goods and services based on representatives of a particular social class.

Behavioral principle. Many experts believe that the use of behavioral parameters is the most appropriate basis for forming market segments. These parameters include the reason for making a purchase, the benefits sought, the status of the user, the intensity of consumption, the degree of commitment and readiness to perceive the product and attitude towards the product.

Segmentation is an important means of increasing profitability... Segment strategy is sniping at the market. J. F. Angel, American marketing scientist. It is quite understandable and natural that every manufacturer wants to create and sell products that can satisfy the maximum number of consumers. But in real life this is hardly possible, since consumers have different attitudes towards the same product, use it differently, and most importantly, purchase it for different reasons.

Therefore, it seems appropriate to divide the market into separate segments in accordance with the motivation of consumers and their specific characteristics. The process of market segmentation is the division of buyers or a market into populations of people with similar needs for a particular product or service, sufficient resources, and the willingness and ability to buy.

Segmentation gives a company the opportunity, instead of a ruinous struggle with competitors, to more effectively serve a particular market segment.

Currently, there is no single method of market segmentation. Therefore, firms and their marketing teams should consider and test segmentation options based on different parameters or principles. These include the basic geographical, demographic, psychographic and behavioral principles most often used in segmenting consumer markets.

Geographical principle. It involves dividing the market into different geographical units: states, regions, regions, cities, districts. Typically, any company begins its business by choosing a geographical location. It must decide where to act - in one or more areas of the city, throughout the city, in one or more regions, on a national or international scale. In this case, the company must clearly understand the climate in the selected locations, population density, and preferences inherent in urban and rural populations.

Demographic principle. This principle consists of dividing the market into groups according to parameters such as gender, age, family size, stage of the family life cycle, income level, occupation, education, religious beliefs, nationality. Such parameters are most often used in segmentation because they are related to the needs and preferences of consumers, and in addition, they are the easiest to measure compared to other parameters.

Here are some examples of using demographic parameters for market segmentation. Age and stage of the family life cycle play a large role in segmenting the consumer market for children's products, especially toys. This segmentation principle allows you to choose the most suitable toy based on knowledge of the child’s age.

Knowledge of the stages of the family life cycle allows firms to rationally form product sales structures (for example, different sizes of food packaging) and most fully satisfy the needs of the corresponding categories of families.

Gender segmentation is widely used by companies producing textiles, clothing, shoes, jewelry, cosmetics, furniture, household appliances and some attributes that emphasize the business style and characteristic features of men and women in the course of their professional activities.

One of the most important segmentation parameters is income level, which divides consumers into low, medium and high income groups. Each of these groups is characterized by certain levels of consumption of food, household appliances, means of transportation, forms of recreation, etc.

Example: Based on indicators of the level of consumption of goods and services in Russia at the end of the 20th century. the entire population of the country can be imagined

in the form of four social strata: poor, low-income, wealthy and rich. The division was carried out according to the principle of the number of subsistence minimum sets purchased for average per capita income. The subsistence level includes a list of necessary food products and seven types of services (utilities, transportation, etc.).

Thus, in 1999, the poor (54% of the country’s total population) could purchase less than one set of the subsistence level with their income; low-income (26.6%) - 2 - 2.5 sets; average (14.4%) - 3 - 5 sets, and wealthy (4.3%) - 6 - 7 sets of the subsistence level. The income gap between the richest and the poorest reaches 40 times, which has a significant impact on the socio-economic and political situation in the country. Knowledge of these indicators and the nature of their changes should be taken into account when developing marketing activities, manufacturing enterprises and commercial firms.

Psychographic principle. Customer segmentations are divided into groups based on social class, lifestyle, and personality characteristics. This is because members of the same demographic group can exhibit completely different psychographic traits. Thus, belonging to a particular social class greatly affects a person’s preferences in relation to various goods, services, choice of retail outlets, etc. Therefore, many firms plan their activities by producing goods and services based on representatives of a particular social class.

Most firms segment markets using a combination of several demographic parameters, such as gender, age, and income level. Lifestyle is the established forms of a person’s existence in the world, which are expressed in his activities, interests and beliefs. This concept is very important when choosing market segmentation parameters.

Even the belonging of people to the same social class or type of professional activity does not allow us to fully imagine them as individuals. And only a way of life provides a comprehensive portrait of a person in his actions and relationship with the environment.

And it is no coincidence that when developing a product marketing strategy, experts strive to reveal the relationship between ordinary and branded goods and the lifestyle of potential consumers. For example, this is how manufacturers of jeans act for specific groups of men leading an active lifestyle, or, conversely, homebodies. For each group, jeans of a special cut are created, at different prices and advertised through different advertising means, etc.

Personality type is a set of distinctive psychological characteristics of a person that ensure the relative consistency and constancy of his responses to the environment. Typically, personality type is described on the basis of the individual’s inherent traits, such as self-confidence, independence, sociability, ambition, aggressiveness, wariness, etc.

Knowledge of personality type allows you to analyze consumer behavior and establish a certain relationship between personality type and attitude towards a particular product. This is crucial when the market is oversaturated with goods and manufacturers are forced to adapt to the lifestyle and personal characteristics of their customers.

For example, the Volkswagen company divides motorists into two categories: “good citizens”, focused on economy, safety and the environment, and “capricious citizens”, focused on speed, maneuverability and sportiness. At the end of the 1950s. Ford and Chevrolet cars were advertised as cars for people of different personality types; it was believed that Ford buyers were independent, impulsive, courageous, self-confident, sensitive to change, while Chevrolet buyers were conservative people, economical, prestige-conscious, cautious, trying to avoid extremes.

However, subsequent studies have shown that this approach to segmentation does not always give a positive result. Rather, in favor of segmenting the market by personality type, one can cite the segmentation of buyers of cars with convertible tops and hardtops. Using segmentation by personality type, you can divide consumers into introverts and extroverts. Introverted consumers are more conservative in their shopping behavior than extroverted ones. They are difficult to persuade and have a negative attitude toward intense personal selling and advertising. Extroverts are more easily persuaded to buy through intensive marketing and advertising methods.

Behavioral principle. Many experts believe that the use of behavioral parameters is the most appropriate basis for forming market segments. These parameters include the reason for making a purchase, the benefits sought, the status of the user, the intensity of consumption, the degree of commitment and readiness to perceive the product and attitude towards the product.

The reason for purchasing can help firms better understand the level of use of a product or service. Thus, the reason for purchasing air tickets may be a business trip, a vacation trip, or special circumstances. Therefore, an airline can specialize in serving people who use any of these occasions.

One of the fairly effective segmentation methods is the benefits that buyers are looking for in a product. There is a fairly large group of products in which buyers find various benefits for themselves. These include watches, hygiene products, household appliances, etc. For example, American researcher R. Haley, studying the toothpaste market, identified four segments according to types of benefits: savings, therapeutic effects, cosmetic effects and taste.

In terms of user status, many markets can be divided into the following segments:

• users who do not use the product;
• former users;
• potential users;
• novice users;
• regular users.

As a rule, large firms aimed at gaining a large market share are interested in attracting potential users to their products, while small firms seek to attract regular users to their brand. At the same time, different marketing approaches should be used for each segment.

Product consumers themselves can be divided according to the intensity of their consumption into weak, moderate and active. This segmentation principle is convenient to use in relation to consumers of various drinks, personal care products, a number of consumer goods, televisions, medical devices, etc. Active consumers usually make up a small share of the market, but provide the largest percentage of the total volume of consumed products.

They also share common demographic and psychographic characteristics and degree of adherence to advertising media. The degree of consumer commitment to a product is another segmentation criterion. Consumers may be loyal to brands, places of sale, seasonal sales, etc. They can be divided into four groups: unconditional adherents, tolerant adherents, inconsistent adherents and indifferent adherents.

Divine followers always buy the same brand. These may be consumers of clothing of a certain household, lovers of certain types of soft drinks and tobacco products, fans of sports clubs, etc.

Tolerant followers may give preference to more than one, noise or more brands of a product, i.e. they do not have serious prejudices against various brands, nor do they have great loyalty to them.

Fickle adopters change their preferences over time and move from consuming one branded product to another. This may be caused by changes in both tastes and financial situation.

Indifferent devotees generally show no commitment to any branded product. They, as a rule, purchase any brand of product that is available at the moment.

It is important for firms to analyze the level of commitment in their markets and study the characteristics of both unconditional adherents of their branded products and those who abandon them. This allows companies to more effectively build their marketing strategy. At the same time, it should be remembered that the concept of “brand loyalty” is not always understood unambiguously, and conclusions based on segmentation on this basis should be treated with caution.

The degree of buyer readiness to perceive a product is an important factor that requires special research. In the general mass of potential buyers, you can identify both completely ignorant and knowledgeable and even fairly informed people. Naturally, one cannot expect interest, much less a desire to purchase goods, from the uninformed. Therefore, firms, when developing their marketing strategies, must pay special attention to methods of spreading greater awareness about the products they produce.

The attitude towards a product on the part of potential consumers can be enthusiastic, positive, indifferent, negative and even hostile. The ability to identify segments with one or another relationship to a company’s product allows you to more rationally build your marketing strategy. So, if a market segment with a negative or hostile attitude towards a product is identified, then you should not waste your time and effort on this segment; It is better to focus your efforts on the segment with an indifferent attitude towards the product.

5.1. Segmentation principles

One of the most important issues of brand effectiveness is the correct determination of the market segment in which it is more profitable to position it. Market segmentation is the division of the market into clear groups of indicators, each of which may require separate products and (or) marketing mixes.

Segmentation is necessary, since different groups of potential consumers have different tastes and preferences, which are important to take into account when creating and promoting a brand.

Different sales channels may be needed to address different market segments, as well as appropriate pricing and brand positioning methods. Therefore, a division of the market into certain groups that are homogeneous on some basis is necessary.

Issues of market segmentation in an organization are usually dealt with by the marketing department. In order to carry out segmentation, marketing staff determine the market in which the brand can best be positioned, namely the consumer needs to be satisfied and the relevant consumer groups. You can identify the interesting attitude of consumers of the market in question to the brand based on factors such as:

1) previous experience in promoting the product in question or a similar product to the market;

2) personal experience of marketing employees;

3) experience of competitors.

So, based on these factors, we can distinguish different market segments. In this case, the criteria for identifying segments can be very different, for example, income, age, gender or geographic location of consumers. It is better to segment according to several parameters at once, then the efficiency and accuracy of segmentation increases. For example, the needs and desires of consumers may depend simultaneously on both income level and age and marital status. In fact, the requirements of all consumers are individual, so each can represent a separate market segment. However, it is more expedient to identify large groups of buyers that differ from each other in the basic requirements for goods and in their marketing responses.

When conducting market segmentation, one should distinguish between such basic concepts as principles and criteria of segmentation. The principle of segmentation is a set of indicators by which the sample is divided into separate classes. As a rule, the principle of market segmentation is a complex concept and can include a large number of indicators. The segmentation criterion is an indicator that divides the market in relation to the marketing mix or its elements, i.e. it is a narrower concept.

The following basic principles of segmentation are distinguished:

1) geographical principle(division can be by region, size, climatic characteristics or population density);

2) psychographic principle(level of social class, lifestyle, personality type);

3) behavioral principle(intensity of consumption, degree of commitment, reason for making a purchase, benefits and status of the user, attitude towards the product);

4) demographic principle(age, gender, marital status, income level, occupation, education, nationality, etc.).

In geographic segmentation, it is customary to divide the market into different geographical units, such as states, regions, states, etc. In this case, an organization can position its brand in one or several geographical areas. In addition, if the differences in needs in different regions are taken into account and the characteristics of the brand offered are adjusted accordingly, the company will be able to operate in all segments.

However, demographic segmentation is more popular, since, on the one hand, it is easier to identify demographic indicators, and on the other hand, they have a decisive influence on the formation of consumer requirements. For example, in the clothing and cosmetics market, the most important segmentation criterion is gender.

Segmentation based on psychographic principles also echoes this principle of segmentation. It is important to consider here that consumers from the same demographic may have different psychographic characteristics.

Separately, segmentation based on behavioral principles should be noted. In this segmentation, consumers are divided into groups depending on their nature, knowledge and reaction to the product offered. Most economists believe that this principle of segmentation should be used as a basis when studying the market, and it is best to group consumers based on the reasons for making a purchase or the benefits sought. Segmentation based on different reasons for purchasing helps to identify the level of use of the proposed brand. In addition, it is good to divide the market by consumption intensity into active, moderate and weak consumers. These groups of people tend to have similar demographic and psychographic characteristics.

In a brand loyalty market, that is, a market in which the majority of buyers express their preference for a single brand, it is recommended to segment by product loyalty. It is difficult for companies operating in such markets to increase their share, and for other companies it is almost impossible to introduce their products to the market.

By conducting a commitment analysis, a company can gain a lot of useful information. It is important to study the characteristics of unconditional brand adherents and tolerant brand adherents (this will help identify the main competitors). Unconditional loyalists are a group of consumers who always buy only the brand in question. They will be the basis of the target market of this company. Tolerant followers usually include consumers who often buy a given brand, but sometimes prefer competitors' products.

It is also important to look at consumers who prefer competitors' products to identify gaps in the marketing company, and studying a group of people who do not have preferences can help the company find a way to attract them into the group of brand loyalists.

Segmentation parameters such as the degree of buyer readiness to perceive the brand and attitude towards the brand are also of great importance. The degree of buyer readiness to perceive a brand shows how aware consumers are of the basic properties of the brand and its existence as such. The attitude towards the proposed brand can be either positive, negative or indifferent, therefore it is necessary to separate consumers into different groups with different opinions and work in each segment according to a separate scheme.

Once the main market segments have been identified, their attractiveness should be assessed. To do this, the following factors are considered:

1) the total volume of allocated segments;

2) sales growth rate per year;

3) profitability;

4) the severity of competition;

5) necessary technological requirements;

6) the degree of influence of inflation;

7) level of environmental impact;

8) social and political aspects.

In addition, market segments can be assessed not only in terms of their attractiveness, but also in terms of the business strengths that the organization should have in this segment.

Then the selection of target market segments is carried out, i.e., the selection of one or more suitable segments for positioning your brand on them. As a rule, those market segments are selected that have a more favorable ratio of capacity and cost of sales.

After analyzing the attractiveness of segments and selecting target ones, you should determine an appropriate strategy for reaching the market. The following basic strategies exist:

1) differentiated marketing- the most expensive option. It involves the company’s presence with its brand in several market segments at once, subject to the development of separate offers for each of them;

2) concentrated marketing- cheaper option. The strategy is to focus on a large share of one or more submarkets, rather than focusing on a small share of a large market. This strategy is best suited for companies with limited resources;

3) undifferentiated marketing- the most economical option. This strategy involves addressing the entire market at once with one offer, without concentrating efforts on any individual segments. To achieve this, the marketing program is developed in such a way as to attract the maximum number of consumers. Basically, mass marketing techniques are used here: mass production, mass distribution and mass advertising of one specific brand. This strategy is often considered the most profitable in branding. When choosing a market coverage strategy, it is better to rely on the following parameters:

1) company resources;

2) degree of market homogeneity;

3) stage of the life cycle of the product in question;

4) marketing strategies of competitors.

The considered approach to market segmentation is most often used at present by most firms. However, there is another new approach to segmentation, which is based on the use of statistical methods. This segmentation uses data from quantitative marketing research conducted on a representative sample of potential consumers. Some experts believe that this particular method of market segmentation gives the most objective results.

So, market segmentation using statistical methods is carried out as follows.

First, the main (base) market is determined, just as when segmenting in the traditional way. A questionnaire is then developed, consisting of five basic sections. The first section, socio-demographic, should include a description of the respondent. The other four sections are marketing mix, namely, consideration of the so-called 4Ps (product, place, price, promotion), which includes product, promotion, place, price.

Next, directly quantitative marketing research is carried out using a random sample representative of the selected main market. The received answers to the questions are carefully analyzed, and integral coefficients are calculated, with the help of which the marketing mix is ​​described on an interval scale.

Cluster analysis is then carried out in the space of the derived coefficients. Clusters identified in this way are taken to be the necessary segments, since they ultimately consist of groups of consumers who have a similar reaction to the marketing mix. In conclusion, it is customary to describe the demographic parameters of the clusters under consideration. To do this, their potentials, capacity and availability are determined, and then target segments are selected based on the data obtained.

The considered statistical method of market segmentation has several main advantages compared to the traditional approach, namely:

1) the results of market segmentation are practically independent of the assumptions made by researchers;

2) in the work on segmentation, the entire volume of primary information obtained as a result of quantitative research is used, so it is possible to verify strategic hypotheses, whereas with traditional segmentation they rely on tactical ones;

3) reliable primary market data helps to carry out segmentation efficiently and accurately, since in this case all the information about the segments that is necessary for strategic planning becomes known. However, the statistical approach to market segmentation also has its drawbacks:

1) when using this approach, it is difficult to correctly identify the identified segment. In addition, sometimes segments cannot be described in terms of demographic characteristics;

2) applying a statistical approach to market segmentation requires significant costs, so this approach is best used within fairly large business projects.

Now let’s look at in which cases it is better to use a traditional and in which cases a statistical approach to market segmentation.

In practice, of course, the traditional approach has more supporters, since it is much cheaper than the alternative, although when using it it is often difficult to immediately assess the quality of the segmentation performed. The correctness and accuracy of the work done can only be determined by sales results, although it is difficult to understand what exactly the level of sales is based on: correct segmentation or not. Additional market research will be required.

The statistical approach does not consider the principles of segmentation as such; it is based on the simultaneous use of segmentation criteria and main marketing criteria. In principle, this is quite difficult, although with a little experience, cluster analysis can be quickly carried out on a computer, and integral variables for clustering can only be calculated “manually”.

Let us briefly consider the methodology for constructing integral coefficients for clustering.

Of course, in a simpler version, it would be good to have only one indicator that determines the respondent’s attitude to the so-called 4Ps. But most experts believe that it is more appropriate to use four indicators belonging to an interval scale, each of which corresponds to one of the elements of the marketing mix and divides the entire sample according to their relation to this component. In this case, we will get some grouping in four-dimensional space. Then you can control the size and concentration of groups in each of the four dimensions and simultaneously assess the response of respondents to all elements of the marketing mix.

It is important to note that when using a statistical approach in segmentation, there is a possibility that the subjective opinion of the researcher will influence the result. After all, here data about the respondent is obtained through a regular survey, using simple questions, so the survey results often do not show the degree of influence of each of them on the respondent’s perception of the brand in question as a whole. The questions necessary to determine this degree of influence will generate further questions about the influence of previous questions, and then the researcher will have to determine the indicators necessary for summation into the final integral indicator. Nevertheless, such subjectivism gives a much more objective result than the subjectivism that manifests itself when choosing the principle of segmentation in the traditional approach.

When applying the statistical approach, the integral variable is calculated as follows:

1) first find out the list of indicators that will subsequently make up each integral variable;

2) then all variables lead to a quasi-interval scale of one direction. Thus, it turns out that all indicators have numerical values ​​that determine specific distances between values. The larger this numerical value, the greater the positive contribution this indicator makes to the value of the integral variable;

4) at the last stage, the degree of influence of each indicator on the value of the integral variable is determined, i.e. its weight, and then all indicators are summed up. This sum will represent an integral variable.

Instead, a factor analysis can be performed at the end. This will help reduce the dimension of the indicator space. With this approach, the weight of participation of each indicator in the factors is selected automatically. However, the main difficulty is that there is often more than one factor, and in this case it becomes difficult to understand how the segment responds to each component of the marketing mix.

The accuracy of the resulting integral variable can be checked. To do this, you can either study the linear distribution and histograms (large clumps at the edges will indicate an incorrect calculation), or study the joint distributions of the integral variable and demographic indicators (for them the relationship is obvious).

In addition, at all stages of calculations it is important to determine and take into account confidence intervals. Since when calculating an integral variable, all conclusions become mostly probabilistic, then in order to make the right marketing decisions, the error of calculations should be taken into account.

So, the two considered approaches to market segmentation are quite different from each other, but in any case, the effectiveness of segmentation depends on the extent to which the resulting segments are measurable, accessible, solid and suitable for targeted actions.