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The 3 “S” of Consumers in marketing. The first S stands for sensing the consumer, the second S stands for sewing the consumer, and the third S stands for satisfying the consumer. In doing so the marketer is basically looking towards its market, which is the set of actual and potential buyers of the product with want satisfying products and services.
The term market stood for the place where buyers and sellers gathered to exchange their goods, such as a village bazaar. Another popular way of describing a market is in the context of a particular place where several shops or buyers or users may be located.
From the marketing point of view it can be defined as group of people or organizations with needs to satisfy, money to spend, and the willingness to spend it. It can be identified by some common characteristic, interest, or problem; use a certain product to advantage; and be reached through some medium. However, within a total market there is always some diversity among the buyers. The size of the market depends on the number of people who exhibit the need, have resources to engage in exchange and are willing to offer these resources in exchange for what they want. Within the sane general market there we groups of customers with different needs, buying preferences, or product-use behavior
A consumer market is a market when individuals purchase products or services for their own personal use, as opposed to buying it to sell themselves. Consumer markets consist primarily of products that people use as part of their everyday lives.
It is generally considered that business organizations engage in selling their products and services to their consumers. This is tiue, but they also buy vast quantities of raw materials, ~nanufactured components, plants and equipments, supplies, and business services. Thousands of business, institutional, and government organizations represent a huge, lucrative buying market for goods and services purchased from both domestic and international suppliers. In fact, organizational markets involve many more lupees and items than do consumer markets.
The unique considerations of organization market, which are not present in consumer markets, are:
It is also called producer or business market. It consists of all the individuals and organisations that buy or acquire goods and services that enter into the production of other products and services that are sold, rented or supplied to others. The major industries making up the organizational market are agriculture, forestry and fisheries; mining; manufacturing; construction; transportation; communication; public utilities; banking; finance, and insurance; distribution; and services.
It consists of all the individuals and organisations that acquire goods for the purpose of reselling or renting them to others at a profit. The basic activity of resellers-unlike industrial or business market-is buying products from manufacturing organizations and reselling these products essentially in the same form to the resellers' customers. In economic terms resellers create time, place and possession utilities rather than form utility. Resellers also buy many goods and services for use in operating their businesses-items such as office supplies and equipment, warehouses, materials-handling equipment, legal services, and electrical services.
It represents the line of only one manufacturer. For example, an exclusive show room of cars from a single manufacturer.
It represents a given homogenous product family in depth, drawing on many manufacturers products.
For example, a TV dealer who keeps many brands of TVs from different manufacturers.
They represent a wide range of product lines that still fall within the natural coverage of reseller's type of business. For example, an electronic goods dealer that keeps different electronic goods from various manufacturers.
It represents many unrelated product families. For example, a grocery store or a super market that keeps thousands of products and brands in different product categories from hundreds of manufacturers, This choice of assortment may be available to a single reseller also.
In most countries, government organizations are a major buyer of goods and services. The government market consists of central, slate, and local governmental units that purchase or rent goods for carrying out the main functions of government. The government market constitutes a huge market potential for many companies.
For example, government market buys hundreds of products and services from large number of companies. The governmental agencies buy amazing range of products and services; they buy every thing from toiletries, clothing, furniture, computers, vehicles, and fuel to sculpture, fire engines, weapons, and practically everything.
d) The Institutional Market: This is also known as non-profit organization or "non-business" business market. This market consists of various non-profit institutions other than the government market. This includes: educational institutions (schools, colleges, universities, and research laboratories), hospitals, nursing homes, religious institutions, etc. Many non-profit institutions have low budgets and captive clienteles.
Market segmentation as the process of dividing the total market for a product or service into several smaller groups, such that the members of each group are similar with respect to the factors that influence demand. Therefore, companies through market segmentation divide large, heterogeneous marlcets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs.
Market segmentation makes it easier for marketing teams to develop highly targeted and effective marketing campaigns and plans.
Below we’ve outlined several benefits which exist with understanding and defining market segments.
When a company has identified specific market segments, it helps them to focus on what segments they want to target with specific products/ services/ content/ blogs and campaigns. When a company has a focus on specific segments, they ensure they are targeting the right segment with the right product which will see the greatest ROI.
Having defined segments enables companies to satisfy a variety of customer needs by offering different bundles and incentives. Different forms and promotional activities will be used for different segments based on that segments needs/ wants and characteristics.
When a company is focusing on a specific segment, their market competitiveness increases. Which in turn will lead to a higher ROI. The company is focused on specific segments and learns everything they need to know about that segment, to market their products to them.
With geographic segmentation as discussed earlier, market expansion is possible immediately. When a company understands their segments and how to market to a segment in a particular location, they can expand immediately into another nearby location. If segmentation is based on demographics, then once the company knows their demographic segment they can expand in that segment with similar products.
Even when product features and benefits are the same, it is important for companies to target segments with specific communication. For example, if your segment was senior engineers, they may respond better to technical information about a product in the form of white papers or infographics, but a project manager might respond better to information regarding cost savings, efficiencies etc in the form of a blog, case study or video. Messaging will be different for different segments. Platforms which are used to target different segments will be different also. The key is to understand your segments and target communication relevant to them on the relevant platforms.
To carry out effective market segmentation, the selected segments should be
(I) identifiable and measurable,
(2) sufficient (in terms of size),
(4) reachable (accessible) in terms of media and costs,
(5) differentiable, and
Basis of Segmenting Consumer Markets Consumer markets can be segmented on the following basis:
The marketer may use more than one variable to segment the market; however the key to success will depend on how the marketing program is adjusted to cater to the needs of the segment so chosen.
Under the geographic segmentation, the markets are divided into different geographical units. A company may for e.g. divide India into the Northern market, Southern market, Western market and Eastern market. Depending on the type of product being sold, this segmentation may happen till the extent of the pin codes that have been assigned to different areas throughout the country. For a company operating on a global basis the basis of segmenting the markets could be regions; Americas, Europe, Middle East and Asia. For a country operating in a country say India, the geographic segmentation could be done on the following basis:
• Region (North, East, West, South)
• State (Punjab, Haryana, Himachal)
• District (Amritsar, Ropar)
• City (Chandigarh)
• Pin Codes (160011,160036)
In addition to this, a company may segment the market on the basis of urban and rural markets and make their product offerings accordingly.
Under demographic segmentation the market is divided into sub parts on the basis of one or more of the following variables
• Family type, size and stage
Consumer needs, wants, usage rates, and product and brand preferences are linked to demographic variables for most product categories. Demographic variables are also easy to establish and measure, One of the variables of demographic segmentation that is routinely used by marketers is age.
Under the psychographic segmentation, a marketer makes the use of psychological as well as demographic variables to understand the consumers. Psychographic segmentation is also referred to as lifestyle and attitude segmentation. Under the psychographic segmentation, consumers are divided on, the basis of
• Personality Traits
• Activities, interests and opinions
Psychographic segmentation helps in grouping consumers in a manner that they react to a particular emotional appeal in an identical manner.
Under the behavioural segmentation, buyers are divided on the basis of their knowledge, attitude towards the use of, or response to a product. Many experts opine that behavioural variables are the ideal starting points for segmenting the markets. The important variables in the behavioural segmentation include
• User Status
• Usage Rates
• Loyalty Status
Occasions: Occasions can be defined in any time-frame like day, week, month or year
Benefits: While using benefits as the behavioural variable to segment markets, the marketer divides the consumers into different groups on the basis of the benefits that they seek.
User Status: Consumers may be categorized as non-users, ex-users, potential users, first-time users, and regular users of a product.
Usage Rates: Another behavioural variable to segment the market is the usage rate. The market may be divided into light, medium, and heavy users of the product.
Loyalty Status: Consumers may be divided into groups depending on how loyal they are towards a particular brand.
Attitude: A consumer may be enthusiastic, positive, indifferent, negative or hostile towards, a brand.
Hybrid segmentation can be defined as simply combining two or more different types of customer segmentation models to form a unique segmentation strategy. Some examples can include behavioral and psychographic segmentation, demographic and psychographic, or any other combination you feel fits best for your business.
Psychographic and demographic profiles are highly complementary approaches that work best when used together, By combining the knowledge gained from both demographic and psychographic studies, marketers are provided with powerful information about their target markets. The demographic information provide the marketer about the prospective customers' age, education, income, etc. and the psychographic information provides the basis of the prospective consumers personality, and lifestyle pattern.
This type of hybrid segmentation scheme is based on the notion that people who live close to one another are likely to have similar financial means, tastes, preferences, lifestyles, and consumption habits. Geodemographlc segmentation is most useful when advertiser's best prospects (in terms of personality, goals, and interests) can be isolated in learns of where they live. However, for products and services used by broad cross-sectional of people in a country, other segmentation schemes may be more productive.
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