Market Segmentation

Definition
An identifiable group of individuals, families, businesses, or organizations, sharing one or more characteristics or needs in an otherwise homogeneous market. Market segments generally respond in a predictable manner to a marketing or promotion offer.

Basis For Marketing Segmentation

1.Geographic Region of the country Urban or rural 2.Demographic Age, sex, family size Income, occupation, education Religion, race, nationality

3.Psychographic Social class Lifestyle type Personality type 4.Behavioural Product usage - e.g. light, medium ,heavy users Brand loyalty: none, medium, high Type of user (e.g. with meals, special occasions)

Pros and Cons

Pros 1. Orhanization gets to know customer better 2. Provide guidelines for resource allocation 3. It helps focus the strategy of the organization Cons 1. Increase marketing costs 2. Segmentation can lead to proliferation of products 3. Narrowing segmenting a market can hamper the development of broad-brand equity

Market segments
Market segments should be:
 Measurable  Accessible by communication and distribution channels  Different in its response to a marketing mix  Durable (not changing quickly)  Substantial enough to be profitable

Marketing Mix
Marketing Mix also known as the four Ps: Price Product Place Promotion

1. 2. 3. 4.

KFC
Kentucky Fried Chicken: segment based on the 4 Ps E.g.: Segmenting based on taste (North India mostly focus on chicken where in south focus an Veg.) Family Size: Individual or family?

Baby Boomers
Who are they?
Baby Boomers is the name given to the generation of Americans who were born in a "baby boom" following World War II. The Boomers were born between 1944 and 1964. They currently represent about 29% of the U.S. population (75 million boomers) and expected to reach 35% in 2015. Boomers comprise the largest population boost in American history.

Economic Facts
The influential over-50 segment has $2.3 trillion in annual spending power and today controls 50% of all discretionary income. Boomers have enjoyed the longest period of prosperity known to Americans, and the majority of them have reached their peak earning potential. Companies reached out to them through all stages of life: newlyweds, first baby, sending the kids to college, and then as empty-nesters.

Boomers are also interested in living longer. A Time article stated they fully expect to live to 100. They also want to live better, so when marketing to boomers it's important to focus on wellness and understand that healthy foods and supplements are important to this group, according to Business Week More importantly, they control the bulk of the nations wealth . . . and they shop! According to a recent study by Nielsen and Hallmark Channels, households with baby boomer members account for nearly $230 billion in sales of consumer packaged goods and represent 55% of total consumer packaged goods sales. Americans who were 50 or older as of 2001 controlled $28 trillion, or 67% of the country's wealth.

Number of Americans Age 65 and Older (in millions), Years 19002000, and Projected 20102050

General Mills
The worlds 6th largest food company: Some of its most popular brands: Betty Croker Green Giant Nature Valley Fiber One Hagen-Dazs

Products Deigned For Baby Boomers

1. 2. 3. 4. 5. 6. Fiber One Multigrain Cheerios Honey Nut Cheerios Progresso soups and Yoplait yogurt. Single serving versions of green giant vegetables. What was a $600 million category in U.S. grocery is a $5 billion category today,,.

Other Large companies that targets baby boomers:

Lions club international Best buy (Geek squad) Chicos retail stores record $359 million in sales Herba Life (Health products)

References
http://www.pr101.biz/pr-101-lesson-68-we-boomerscan-be-hard-to-reach/ http://www.herbalife.com/ http://www.generalmills.com/Company.aspx http://adage.com/article/news/advertising-generalmills-targets-3-groups-fuel-growth/142138/ http://www.12manage.com/description_market_segm entation.html http://www.scribd.com/doc/19080033/KentuckyFried-Chicken-KFC-Marketing-Mix-four-Ps

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