Segmentation bases for marriotts hotels marketing essay. Demographic segmentation is one of the most popular bases for segmenting customer groups. Demographic segmentation involves dividing the market into groups that are identifiable in terms of physical and factual data. The purpose of segmentation is the concentration of marketing energy on a smaller group or segment. Demographic segmentation is seen almost in every industry like automobiles, beauty products. Well address the development of market segmentation, how it serves as the foundation of a marketing strategy, the types of segmentation to consider and the process of developing a market segmentation strategy. However, our focus is on the demographic segmentation, which generally involves grouping the markets into subcategories based on demographic variables such as occupation, age, religion, nationality, gender, income, race, family size and education. Market segmentation when the term market segmentation is used, most of us immediately think of psychographics, lifestyles, values, behaviors, and multivariate cluster analysis routines. The definition of market segmentation, why it matters and the nuts and bolts of how to do it will be presented within this blue paper.
Geographic segmentation can be classified by parameters like countries, states, cities, villages, urban rural, climatic conditions, density of population. Marketer will identify the customer need and want then only decide if it is practical to develop marketing mix to satisfy those wants. This segmentation helps organizations understand consumer behavior accurately that in turn helps them perform better. Psychographic segmentation is a way to categorize audiences and customers by factors that relate to their inner personalities and characteristics. However, with the prevalence of consumers online footprint and in particular. Segments are constructed on the basis of customers a demographic characteristics, b psychographics, c desired benefits from productsservices. Market segmentation and target marketing pearson canada. Behavior segmentation a variety of strategies for segmentation is available. Geographic segmentation is the market segmentation strategy in which the market is divided on the basis of regions or geographies. Moreover, businesses that have not traditionally embraced marketing in general or segmentation in particular, see it as imperative for success and even survival.
They include the demographic segmentation, which is. Demographic segmentation is defined as a market segmentation method based on variables such as age, gender, income etc. Let us examine each one of these segmentation variables. Abstract excerpt almost any marketing textbook will tell you that the key to successful marketing can be summed up by the stp strategythat is, segmentation, targeting, and positioning. May 15, 2020 geographic segmentation is the market segmentation strategy in which the market is divided on the basis of regions or geographies. Market segmentation 223 globalization of business expands the scope of operations and requires a new approach to local, regional and global segments. Demographic segmentation demographic segmentation is the method of dividing markets on the basis of demographic variables, such as age, gender, income, ethnic background and family life cycle. Segmentation can take many forms, more than just psychographic, or demographic segmentation. Demographic segmentation slices the market on demographic variables like age of the customer, gender, income, family life cycle, educational qualification, socioeconomic status, religion etc. Demographic segmentation meaning, factors and example. The outcome is a manual which describes in detail how to segment a. Segments are constructed on the basis of customers a demographic characteristics, b psychographics, c desired benefits from productsservices, and d pastpurchase and productuse behaviors. Learn all about psychographic segmentation definition, variables, examples, and advantages to implement it.
Demographic, geographic, geodemographic, psychographic and behavioural segmentation as product markets tend to mature, customer needs often become more specialized. Pdf the use of demographic and psychographic segmentation to. Behavioral segmentation combined with demographic or geographic segmentation is much more powerful. A segmentation base is identified as the distinguished base and a model is developed for predicting this base from other possibly external variables. The 5 main types of variables used for demographic segmentation are as below. Only individuals falling in high income groups are realistic customers of this specific product.
Types of market segmentation 1 demographic segmentation. Demographic segmentation is one of the simplest and most widest type of market segmentation used. Market segmentation is one of the marketing concepts that are relatively long applied in business practice. Dec 18, 2019 segmentation generally divides a population based on variables. See how you can leverage market segmentation by learning.
This approach groups customers based on geographic location. Demographic segmentation definition, importance, advantages. Demographic segmentation is market segmentation based on various demographic factors, like age, gender, social class, etc. The demographic segmentation by starbucks is between 25 and 40 years of age with high incomes, the. Demographic segmentation is market segmentation according to age, race, religion, gender, family size, ethnicity, income, and education. For b2c segmentation, there are four basic segmentation approaches.
It helps the firm divide the market into several segments or groups, each having a common variable, and target each of these. Demographic characteristics include gender, generation, race and. In practice, demographic segmentation can potentially employ any variable that is used by the nations census collectors. Cornell university school of hotel administration the. Psychographic segmentation is a market segmentation technique where groups are formed according to psychology, lifestyle, personality, social status, daily activities, interests, and opinions. Moreover, businesses that have not traditionally embraced marketing in general or segmentation in particular, see.
Thus demographic segmentation too has its own variables such as age, gender, family size, income, occupation, religion, race and nationality. Demographic and psychographic variables based on the differentiation of consumer brand preference were used to elicit the characteristics of market segments. This is a product that cannot be afforded by people from every income group. Demographic segmentation examples include age, gender, income, religion, race and nationality.
Demographic segmentation divides customers based on aspects such as age, gender, education, religion, occupation, income and marital status. Marketers use demographic information to segment markets because it is widely available and often related to consumers purchasing and consuming. This is one of the most common segmentation practice among marketers. Market segmentation is the process of dividing prospective consumers into different groups depending on factors like demographics, behavior and various characteristics. Explain the importance of segmentation and targeting.
Demographic segmentation variables are most often used to develop a customer profile. Basic explanation of demographic segmentation with. However, with the dynamic marketing trends and changing market, we can expect more kinds of grouping. Through marketing research, a company collects demographic. The use of demographic and psychographic segmentation to creating marketing strategy of brand loyalty article pdf available in scientific annals of economics and business 661. Geographic segmentation definition, importance, advantages.
These insights are possible by combining demographic data with consumer spending, market potential, and lifestyle segmentation data to create. An analysis on the conditions and methods of market segmentation. American journal of business education june 2011 volume 4. The age of the customers is a general indicator of how appealing certain goods and services are to them.
A marketer has to try different segmentation variables, alone. The word demographic is derived from demography, meaning the study of population. That is the primary basis of segmentation for the car manufacturer that forms. Segmentation is the core process leading to, inter alia, market positioning, product denition, campaigns, pricing and distribution channels. Learn all about psychographic segmentation definition, variables, examples, and advantages to implement it for your target market. In the section of the market segmentation process the different types of market segmentation and the variables of each type will first be explained. Market segmentation is a much broader concept, however, and it pervades the practice of business throughout the world. Market segmentation is the process of dividing a target market into smaller, more defined categories. Demographic variables and marketing strategies udemy blog.
Market segmentation in which consumers are grouped according to demographic variables, such as income and age, and identified by a geographic variable, such as post code or zip code. Market segmentation involves dividing your market into groups. Demographic segmentation is the most often used approach because we can count the number of individuals within a segment who have similar characteristics such as gender, age. Segmentation generally divides a population based on variables. Most companies use it to get the right population in using their products. In demographic segmentation, the market is divided into different groups on. Demographic segmentation is the market segmentation strategy in which the total market is divided on the basis of customer demographics. Count the absolute numberof a population or demographic event e. This type of segmentation helps to reach out to customers living in a similar region or area and have. Basic explanation of demographic segmentation with examples. Although with apparel and sports the market can be broad, for the most part nike primarily targets consumers who.
Marketing possibilities of market segmentation based on geographic and demographic variables sasa veljkovic belgrade university. Demographic segmentation is a factor used by nike to target individuals according to their age, lifecycle stage, gender, occupation, and generation. The following are examples of the demographic variables in marketing segmentation. Each of the above variable is discussed in detail below.
The present paper highlights the definition and major basis of market segmentation. A field study investigated the relationships between five demographic factorssex, female working status, age, income, and marital statusand a wide range of variables associated with. This helps in creating groups exhibiting a similar. May 08, 2018 demographic segmentation is the simple process used by marketers to divide the total potential customers based on their different demographic factors such as gender, age, family, income, educational background, religion, socio economic status, race, etc.
What demographic data wont reveal is what members of a group spend money on or how to reach and appeal to them. Businesspeople or business travelers are one of the customers that marriott focus the most. Rate the frequencyof a demographic event in a population for a given time period divided by the population at risk for the same time period. There are lots of bases or variables to segment markets which include. Demographic segmentation divides the market into groups based upon variables such as age, sex, family size, income, education and so on. Demographic segmentation and the important variables. This helps in creating groups exhibiting a similar need and want. May 09, 2020 demographic segmentation divides the market on the basis of demographic variables like age, gender, marital status, family size, income, religion, race, occupation, nationality, etc. These segmentation methods are a popular way of segmenting the customer markets, as the demographic variables are relatively easy to measure. Unlike demographic and geographic segmentation, which focus on quantifiable and visible details, psychographic segmentation focuses on less obvious details. Demographic variables used in businesstobusiness are typically of such nature that. Demographic and background characteristics this subsection summarizes background characteristics of respondents.
It not only uses demographic segmentation in terms of gender, income, age, and ethnic background but also employ geographic segmentation drawing upon country or region of the world and its market size in that specific region and climate. Demographics can be segmented into several markets to help. Develop strong positions in spealized market segment. The management can respond to meet changing market demand. Their parents are called old generation and pay much attention to setting good examples. Market segmentation and its impact on customer satisfaction with especial reference to commercial bank of ceylon plc. Psychographic segmentation marketing in the public sector. Demographic segmentation divides the market into segments based on variables. Psychographic segmentation variables the variables that come into play when we speak of psychographic segmentation are primarily psychological in nature. Knowledge networks has previously compiled a great deal of information on the demographic characteristics of its panel members. Depending on the level of competition in the product market, segmentation is the natural response of marketers to deal with the situation in market. There is also geographic, time, distribution, media, and occasionbased segmentation methods. Which market segmentation variables are most effective to. Market segmentation, chapter targeting and positioning.
Demographic segmentation primarily takes into consideration the age and the gender of the targeted customer group. These types are significant when identifying the right target customers to a product. Using different types of market segmentation allows you to target customers based on unique characteristics, create more effective marketing campaigns, and find opportunities in your market. Demographic variables and measures demography is the study of how human populations are structured and how human populations change. Demographic segmentation consists of demographic factors such as age, ethnicity, nationality. Pdf with growing competition, loyal customers have become the key to the. The results of the correlation analysis regarding the different variables 33. Saturation of the market and consumer heterogeneity caused that segmentation, despite some criticism, continues to be an important marketing. Learning objectives discuss the term market from a marketing perspective.
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