Market Segmentation

ACCA P3考试：Market Segmentation

Market segmentation allows the company to vary its marketing mix to satisfy each of the market segments it chooses to enter.

Managers consider the following:

Customer needs that vary due to:

characteristics of people and organisations;

the purchase and use situation; and

users' needs and preferences.

Relative market share already achieved (share in relation to that of competitors); and

How segments can be identified and serviced (availability of customer data and processing).

1 Consumer Segmentation Bases

Geographic;

Psychographic or lifestyle aspects (feelings and attitudes);

Purchasing characteristics;

Demographic. There are two main models:

Socio-economic grouping

Family life cycle segmentation

2 Industrial Segmentation

Industrial markets can be segmented by applying the same bases used in consumer markets. Typically, the emphasis will be put on:

Geographic—most obvious for firms operating internationally;

Purchasing characteristics—frequency and size of orders;

Products manufactured (e.g. aircraft engines v car engines);

Benefit expectations (e.g. guarantee of supply, quality or innovative design); and

Company type and size—smaller customers need fewer deliveries, larger ones may expect JIT.

3 Segmentation Criteria

The following criteria should be considered when deciding on the most appropriate segments to develop and maintain a successful segmentation strategy:

Measurability/availability of information;

Accessibility of segment (i.e. distribution);

Substantiality (i.e. size) of market segment;

Stability of buying behaviour.

If a segment fails on some of these criteria, then it will be difficult to develop and maintain a successful segmentation strategy.