RETAIL MARKET

SEGMENTATION

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 Before Segmenting Retail Market,
let us discuss the following 3 issues
 What is Market Segmentation?
 What are the factors that derive marketers
to segment their market or market of their
product/service?
 What are the bases for segmentation?

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 What is Market
Segmentation?
 Grouping customers depending
upon their wants, which are
governed by age, gender, lifestyle,
aspiration, disposable income,
esteem need, etc.
 In fact, it’s a first and vital step of
Strategic Marketing followed by
Targeting and Positioning.
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What is Segmentation
Segmentation Techniques
Based on Usefulness and Measurability
Usefulness

Age

Ethnicity Gender
High

Income

Lifestyle
socio-demographic
Attitudes segmentation
Low

Generic
need
sought

Low Measurable
High 4
 What are the factors that
derive marketers to segment
their market ?
 Customer Fragmentation
 Efficiency
 Information Technology
 Resources

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 What are the bases for
segmentation?
 Geographic factors
 Demographic Factors
 Psychological Factors
 Psychographic (Lifestyle) Factors
 Socio-cultural Variables
 Use-related Characteristics
 Use-situation Factors
 Benefits sought
 Forms of Hybrid Segmentation
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Segmentation of Retail Market

 To segment the Retail Market we have

to understand the Concept of
Shopping and Shoppers because it is
shoppers, whom we have to group in
the background of their shopping
pattern. Therefore, first we will learn
about the concept of Shopping.

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 CONCEPT OF SHOPPING
 Shopping is an activity that we perform with a high level
of regularity and involvement. It is more than just a
necessity – it is a desirable activity which appeals to the
inherent nature of humans.
 The concept of shopping can be understood from
different perspectives –
 Shopping Environment
 Shopping in a Socio-cultural Context
 Shopping and an Individual

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 Shopping Environment

 Economic growth, developments on

public transport and new form of
mass production contributed to the
expansion of shops and the
phenomenon of shopping.

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 Shopping in a Socio-cultural
Context
 We are basically a social species and most of us
would like to spend some part of leisure time in
socializing. Thus, markets are not only place to
exchange goods and money but a place to see and
be seen at.
 Modern day shopping is a private place pursuit,
involving the experience of wandering among
crowd and responding to a wide range of stimuli.

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 Shopping and an Individual
 People’s motives for shopping are a function
of many variables some of which are
unrelated to actual buying of products, which
can be -
 Role-playing
 Diversion
 Self-gratification
 Learning about New Trends
 Physical Activity
 Sensory Stimulation
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Now, let us discuss the
Shopping Process

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 The Shopping decision can be
analyzed from two perspectives, viz. ,
 the Decision Process
 the factors affecting the process

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 Decision Process
5 Basic steps:
 Identification of a need for the product or
service
 Information search
 Evaluation of alternatives
 Purchase
 Post-purchase behaviour

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 Factors influencing the retail
shopper behaviour
 Range of Merchandise
 Convenience of shopping at a
particular outlet
 Time to travel
 Socio Economic Background & Culture
 The Stage of Family Life Cycle

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RETAIL MARKET
SEGMENTATION

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 To increase their efficiency, retailers identify groups of
customers (market segment) and target their offerings to meet
the needs of typical customers in that segment rather than the
needs of a specific customer.
 A retail market segment is a group of customers whose needs
are satisfied by the same retail mix because they have similar
needs.
 For example, families travelling on a vacation have different
needs than executives on business trips. Thus, Marriot offers
hotels with different retail mixes for each of these segments.

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 Criteria for Evaluating Market
Segments
 Customers are grouped into segments in
many different ways. There’s no simple way
to determine which method is best.
 Four criteria for evaluating whether a retail
segment is a viable target market are –
 Actionability
 Identifiability
 Accessibility
 Size.
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 APPROACHES FOR
SEGMENTING RETAIL MARKET
-Consumer Behavior
-Maslow’s Hierarchy Model

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 APPROACHES FOR
SEGMENTING MARKETS

Consumer Behavior

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 Geographic Segmentation

 Region of the country

Urban or rural
 Climate, terrain, natural resources,
population density, sub-cultural values,
different population growths in different
areas.
 City size

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 Demographic Segmentation

 Age  Education

 Gender  Religion

 Family life cycle  Race

 Family income
 nationality

 Occupation

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Geodemographic
Segmentation

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 Psychographic Profile of Indian Shoppers
(Men)
 Traditional man- conservative, driven by values, cherishes
family, avoid ostentation.

 Pleasure seeker- self oriented person, driven by status and

status symbol

 Social chameleon- hypocrite of sorts who wants to project

right image.

 Intrinsic progressive man-believes in family values,

equality of sexes, non-traditional

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 Psychographic Profile of Indian Shoppers
(Women)

 Contented conservative- house-wife who is happy with her state of

life/society

 Archetypal provider- believes of her role is to provide for and l;ook after the
well being of her family

 Anxious rebel- Working women, who is not happy with the existing state of
affair.

 Troubled homebody- House-wife who is not sure that she is doing the right
thing by sitting at home.
 Psychographic Profile of Indian Shoppers
(Women)

 Tight fisted traditionalist- Traditional women who believes in

saving for tomorrow.

 Affluent sophisticate- Affluent woman who is comfortable with the

finer things of her life.

 Contemporary housewife- Who plays an active role in her

household and sees herself as equal to her husband.

 Gracious hedonist- Working woman who believes in looking after

herself.
 Psychographic Profile of Indian Shoppers
(Youth)
 Homebodies- Traditional, low individuality, very few aspirations for self,
morality, duty are core of their values.

 Two-faced youths- Inwardly traditional, outwardly modern.

 Wannabes- Materialistic show offs, want to be perceived as confident and cool.

 Rebels- ??

 Cool guys- they are influencers, others want to be like them. They bare
confident and have strong sense of individuality.
 Value & Lifestyle Profile of Indian Shoppers

 Pre-independence shoppers- Anti British, take pride in India, support local products.

 Post-independence shoppers- Idealistic, independent minded, sincere and hard

working.

 Pre-Rajeev Gandhi shoppers- Socialistic, anti-rich, license permit driver, ape and bait
the west.

 Post-Rajeev Gandhi shoppers- Capitalistic, global orientation, ape the west, tech.
savvy.

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 Media graphics of Indian Shoppers
(Men)

 Media-mad fast trackers

 Settled corpos

 Couch potatoes

 Sarkari babus

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 Media graphics of Indian Shoppers
(Men)
 Aiyappan sars

 Common man

 Retail patels

 traditionalist
 Media graphics of Indian Shoppers
(Women)

 Media-intense modern

 Media medley south skews

 Cine meenas

 Kahani Kusum Ki Category

 Media graphics of Indian Shoppers
(Women)
 Mrs. Traditionalist Category

 Simple Sudhas

 The Amma Brigade

 Behaviour-based
Segmentation
 Choice Optimizers

 Premeditated shoppers

 Economizing shoppers

 Support Seekers

 Frequent Shoppers Vs. Infrequent Shoppers

 Recreational Shoppers

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 Attitude or Orientation Based Segmentation

 Post-purchase experience  Loyal Shoppers

sharing
 Bargain Seeking
 Managing Stress
 “Go and Grab” shopping
 Active Information Seeking
 List Sticking
 Exploring
 Visiting Unplanned
 Feeling Relaxed After Shopping
 Crowd Avoiding

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 APPROACHES FOR
SEGMENTING MARKETS

Maslow’s Hierarchy Model

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 The notion that a comprehensive coverage of
human needs can be organized into an
understandable hierarchical framework is of
obvious benefit.
 If individuals are satisfying basic needs and
seeking self-fulfillment, then the retailer has to
understand the need to offer products which
allow consumers the opportunity to fulfill their
higher needs of self-improvement, the
attainment of individuality, provide status and
give some more meaning in life.
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 TYPES OF SHOPPER

 Compulsive shopper
 Economic consumer
 Befriending consumer
 Ethical consumer
 Apathetic consumer
 Habitual shopper

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 Motivations are an important clue to the purpose
and type of shopping individuals will undertake.
 This helps retailers position their store to appeal to
the different preferences based upon merchandise,
price and quality.
 This leads to decisions in terms of which type or
types of shoppers to attract and how many of them
are able to be targeted.

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