Question

Describe the four steps in a segmentation process. Then, pick a market offer (a brand, a product, a service or any other type of market offer) that you think is struggling in the market, and conduct a segmentation process in order to improve the situation for this offering.

Answer 1

Market Segmentation of Samsung Smart Phones :

1] Geographic Segmentation – In this type, the market is segmented as per the different geographical regions which could be local like urban & non-urban region or as per countries or world regions such as Europe or Asia. The factors considered in geographic segmentation are language, climate, lifestyles, culture & values, etc.

Example : Samsung Guru with basic features and budget range for rural regions and Samsung galaxy series with advanced features in medium to high price range for urban regions

2] Demographic Segmentation – In this type, the market is divided into groups based on the demographic profile of consumers considering different factors like age (teen or young adult or elderly), gender, religion, family life cycle (single or married or divorced), income (low, medium, high), education, etc.

Example : Galaxy Youth / Star for young population and Galaxy Note series for professionals

3] Psychographic Segmentation – This includes segmentation based on the study of consumer personality by measuring psychological attributes like lifestyle or way of living, interests, opinions, social class, etc.

Example : Samsung Galaxy Zoom or Galaxy S7 with advanced features in camera targeted for people with special interest in photography

4] Behavioural Segmentation – The market segments are formed based on the study of consumer’s behavior towards the product by considering factors like their knowledge, attitude, usage rate, loyalty and response to the product.

Example : Introduction of different variants in Samsung Galaxy for people loyal to Galaxy series

5] Benefit Segmentation – The market is divided into groups of people who expect simple or specific benefits form the phone at a reasonable price range.

Example : Samsung Galaxy Grand comes with all the regular features expected from a smart phone and at a reasonable price.

Segmentation relevant to my purchase : - Psychographic

Since I have purchased Samsung Galaxy S7 which has the best features of camera among all its variants, I come under the Psychographic segmentation. I have special interest in photography and expect best camera quality. Apart from the regular use, this phone will be mostly used for taking pictures. Below variables are considered in Psychographic segmentation with its relevance to my purchase:

1. Lifestyle – Follows modern lifestyle with strong presence on social media like facebook, Instagram and frequently posting pictures on these platforms. Hence, advanced camera features are desired.
2. Interests – Has special interest in photography and hence, camera must be of best quality in the phone
3. Social Class – Belongs to urban high class and hence, price is not a constraint so phone is affordable to buy.

Below are the other two market segments with examples in some of the variables and difference in expectations about product attributes / price.

1] Demographic Segmentation - In this type, the market is divided into groups based on the demographic profile of consumers considering different factors like age (teen or young adult or elderly), gender, religion, family life cycle (single or married or divorced), income (low, medium, high), education, etc.

1. Age – The elderly people will expect basic features from the smart phone at a budget range
2. Income – A high income group working professional may afford the Samsung Galaxy S7 phone but he will prefer features useful in his work like able to read and write business documents on the phone easily and will not be keen about the camera features. He may prefer Galaxy Note series instead of Galaxy S7.

2] Behavioural Segmentation – The market segments are formed based on the study of consumer’s behavior towards the product by considering factors like their knowledge, attitude, usage rate, loyalty and response to the product.

1. Brand loyalty – A person may have brand loyalty towards an Apple Iphone or some other brand and hence, even if the features or price of Samsung Galaxy S7 don’t match, he will chose to buy phone from his most preferred brand
2. Attitude – A person may have had bad experience about the service provided or the phone usage of Samsung’s products and hence developed a bad attitude towards the brand. Hence, he will chose to buy a different brand phone.