Segmentation of Nissan

Home Assignment in Marketing

Segmentation, Targeting, Positioning

Prepared by: Eszter Olбh

Course: BABS 2.

Seminar Leader: Jуzsef Kapitбny

Seminar: Every alternate Monday 8.00 - 9.30

Satisfying people's needs and making profit along the way is the purpose of marketing. However, people's needs differ and therefore satisfying them may require different approaches. Identifying needs and recognising differences between groups of customers is at the heart of marketing. We cannot do everything, we cannot satisfy everybody. This means we have to be clever in targeting our offers at people who really do want and need them, and we have to be strong in setting aside those who do not. This early observation is fundamental as it requires us to think as hard about where do not want to sell our product as where we do.

Segmentation is simply the process of dividing a particular market into sections, which display similar characteristics or behaviour. There are a number of segmentation variables that allow an organisation to divide their market into homogenous groups.

These variables will be discussed briefly below:

Demographic Segmentation

Demographic originates from the world "demography" which means "a study of population". The population can be divided into age, gender, income, and lifecycle.

As people age their needs and wants change, some organisations develop specific products aimed at particular age groups for example nappies for babies, toys for children, clothes for teenagers and so on.

Gender segmentation is commonly used within the cosmetics, clothing and magazine industry.

Income segmentation is another strategy used by many organisations. Store like Harrods are predominantly aimed at the affluent market. Daewoo aim their vehicles at price sensitive buyers who require benefits for the price. 'In today's globally competitive environment brads are specifically developed and positioned within particular income segments in order to maximise turnover.' (Carlos Ghosn, CEO of Daewoo Europe, 25 January, 2001, BBC News)

Products and services are also aimed at different lifecycle segments. Holidays are developed for families, the 18-30's singles, and for those in their 50's.

Geographic Segmentation

Geographical segmentation divides markets into different geographical areas.

Marketers use geographic segmentation because consumers in different areas may display certain characteristics and behaviour in that particular region. An area can be divided by the town, the region or the country. On a global scale we may divided by global region such as Europe, North America, South America, Asia and Africa.

Geodemographics Segmentation

There are several commercial geodemographics segmentation schemes available, that combine demographics and geography segmentation basis. This approach aims to identify groups of small geographic areas that have similar demographic profiles. These tend to suffer from the fallacy of averages. Some areas may be genuinely relatively homogenous but many are not and this can be very misleading.

Psychographics Segmentation

Although demographic segmentation is useful, marketers can use alternative segmentation variables which aim to develop more accurate profiles of their target segments.

Lifestyles segmentation is show our lifestyle, our everyday activities, our interest, opinions and beliefs on certain issues. It also shows our everyday behaviour from where we shop to what we buy. Marketers develop and aim products/services at particular lifestyle groups and develop lifestyle profiles on their target market. If we understand the lifestyle of a particular group we can sell them a product/service on the basis that it will enhance their lifestyle- A lifestyle group is a particular segment defined by the organisation that is marketing a product or a service.

Personality characteristics mean that marketers try to develop personalities for their brands and products that mimic that of their target market.

Social class segmentation works on the assumption that the higher your profession the more you will earn. (www.learnmanagement.com)

Marketers use this type of information to sell products and services based on lifestyle behaviour, and your profession does have an impact on the way you behave.

Behavioural Segmentation

Refers to why people purchase a product or service. Behavioural segmentation can be broken down into the benefit a customer seeks from purchasing product.

Occasion is another variable. When should a product be purchased? (Christmas time, for birthday and so on) It aims to increase the reason to buy factors and thus increase sales.

Usage rate divides customers into light, medium and heavy users. Heavy users obviously contribute more to turnover then light or medium users.

Many firms are now trying to segment their markets by loyalty and are using loyalty scheme to do it. The effectiveness of loyalty scheme and segmentation by loyalty is limited by how people buy. Loyal customers are few and very hard to find in most markets. Most customers are promiscuous and polygamous in their relationship with brand. (Kotler, 2005, p 407)

Requirement of segmentation

Before an organisation can target a specific segment it must ask itself a number of questions.

Can we measure the size and growth of the segment?

Is it easy for us to target and reach our segment?

Does the organisation have enough resources to reach their segments?

It is no point in targeting segments we do not have the resources to cater for.

After the process of segmentation the next step is for organisation to decide how it is going