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Market Segmentation

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Shani Breytenbach

on 13 May 2014

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Transcript of Market Segmentation

Market Segmentation
design by Dóri Sirály for Prezi
South Africa has a heterogeneous consumer market.Use your knowledge of South African consumers and critically discuss the importance of market segmentation with reference to consumers' clothing and coffee shopping
South Africa is a country rich in diversity
Ways in which consumers are different is defined as diversity
This concept can be seen in South Africa, a country with a verity of cultures, languages, races and believes
Heterogeneous consumer market= diverse market with consumers that have different wants and needs
Case Study
For retailers and marketer to be able to target consumers and position their product in the market it is necessary to first identify and chose a market segments
As South Africa is a culture rich in diversity, using market segmentation can organise and group South African consumers together to enable retailers and marketers to provide products to chosen market segments
Products provided and marketing campaigns will be successful when retailers and marketers identify and chose a market segment and provide products specifically for the target markets needs
Conclusion
South African consumers market
Identifying distinct groups in the South African market and grouping people together according to shared characteristic is defined as market segmentation
Market segmentation
For a market segment to be effective it should comply to the following criteria, 1) sizable, 2) identifiable, 3) stable, 4) accessible and 5) compatible with marketers and retailers objectives
Targeting
By dividing the South African market according to characteristics that they share market segments are created
Demographic segmentation
Segmentation is based on factors such as age, gender, marital status, family life cycle and income
Logical way to segment consumers
Located consumers effectively
Measures more precisely than other segmentation methods
Figure is a PEP store, consumers who earn a low income will have the need for inexpensive clothing
This segment is the targeted market for this store as it provides low prices
Consumers who earn higher income will not necessarily be interested in the products that PEP provides and would rather buy clothing at Cape union mart
Figures can be classified by using demographics
Try to identify to what market segment this product and advertisement is aimed at (demographic segmentation was use to identify this market segment)
Was it a successful product aimed at the segment?
Geodemographic segmentation
When the fashion choices of consumers living in a city is compared with the fashion choices of a person living in a rural area there will be an significant difference
In what is available in the different areas and what the consumer will purchase to fulfill their needs
Climate also has a large impact on the choice of clothing and availability of products
Geographic destinations can lead to formation of new market segments
Geodemographic are often used to target consumers who live close together because it assumed that these consumers will have many shared characteristics
The market segment that will purchase products from the retailer in the figure will be different from consumer that will purchase clothing from Zara
South African consumers who live in rural areas may only have access to a local retailer
Consumers in Pretoria will have a larger variety of stores in their area
Psychographics segmentation
Consists of dividing the market according to shared attributes these attributes are, social class, lifestyle, personality, beliefs, culture and subculture
Innovator (personality trait) used to segment consumers who have this trade
Lifestyle consists of activities, interests and opinions and can be used to segment a market
Segment retired elder consumers together according to their lifestyle
Nesspresso is a relive innovative product in South Africa aimed at consumers with innovative personality trait,not all consumers are the segment market for the product
Consumers who are not open to new experiences would rather choice Ricoffy because it is a well know brand used by a large amount of consumers
Demographic segmentation=income
Geodemographic segmentation=availability of products
Usage/behaviour segmentation
Consumers can be segmented according to the amount that they purchase and use a product or service
Consumers' classification consist of non-users, light users, medium users and heavy users
What product is advertised?
Who was the segmented market?
Was the advertisements successful?
Many products and services are specifically produced and promoted for a special occasion
Nespresso is advertised consumers that are heavy coffee drinkers will be the segmented group of this product because it is aimed at frequent coffee users who drink a verity of coffee and would be interested to purchase the product
After a market segments has been identified by using single or multiple segmentation methods retailers have to choose a target market using the criteria mentioned above
Positioning
When retailers have chosen their target market, after selecting a segment market they will have sufficient knowledge regarding their target market to fulfill their wants and needs.
Product positioning conveys the image of the product to the target market, according to the image retailers and marketers want their consumers to have regarding their product
Advantages of using market segmentation
Increased competitiveness, by providing products that will fulfill consumers needs
Market expansion by identifying new market segments that have unfulfilled needs and want
Customer retention because product fulfill wants and needs
Increased profitability for retailers
References
Cant, M., Brink, A. & Brijball, s. 2006. Consumer behaviour. Cape Town: Juta.

Schiffman, L.G. & Kanuk, L.L. 2010. Consumer behaviour: buying, having and being. 9th ed. New Yersey: Prentice Hall.
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