Segmentation And Criteria For Effective Segmentation

Advantages of effective market segmentation

Segmentation and criteria for effective segmentation

Segmentation is process through which wide homogenous market is divided into identified segments that have similar demands, wants, and need. The objective of market segmentation is to design a marketing mix according to the expectations of customers. While segmenting the market, normally potential customers are put in same segment so that it becomes easy for the company to target them based on their needs (Wedel & Kamakura, 2012). In creating the market segment, it is essential to use different offers such as promotion, price, and distribution. There are various basis of segmenting the market. Some of the basis of market segmentation is age group, gender, income, martial group and occupation. Four factors affect the market segmentation-

1. Identification of segment clearly.
2. Accessible with the help of promotional activities.
3. Appropriate as per the resources and policies of company.
4. Measurable in terms of size.

There are five criteria’s for effective market segmentation-

1. Measurable- Market segment is measured in terms of number of customers as well as sales value. Therefore, research on market should be able to properly identify the size of market segment accurately. This should be done so that strategist can take efforts on marketing.
2. Accessible- while making market segmentation, it is essential to consider that how the group will be accessed. It should also consider whether it falls under the ability or strength of the company. Various market segments might respond appropriate to social media campaigns, outdoor advertising, or any other approach (Weinstein & Cahill, 2014).
3. Differentiable- Market segment should be homogeneous internally. It means all the customers in same segment should have same characteristics or preferences. However, it should be heterogeneous externally. Market segment should be clearly differentiable so that products, campaigns and marketing tool that applied to them do not overlap at the time implementation.
4. Substantial- It is true that wasting budget on that market segment that has is too large or have insignificant spending power. An appropriate market segment is such which has clearly defined the social-economic background, age group as well as brand perception.
5. Actionable- Market segment should have practical value that means it should provide the data for sales approach as well position in the market. The outcomes must be measured in quantity so that action can be taken.

Three Advantages of segmenting consumer market

1. Helpful in determining market opportunities- Market segmentation helps in identifying the opportunities that are lying in market. Marketer can search the needs of every segment by seeing the current offering of its competitors. The study of from research also helps the marketer in finding the satisfaction of customers.
2. Developing marketing programmes and expansion- Organizations can initiate various marketing programmes based on the response of each market segment. It can also spend funds on the different segments depending on the response of buyers. Segmentation based on geography provides various advantages to the company. Market strategy based on geography helps the company in boosting its market share and demand of products (Dontigney, 2018).

1. Helps in providing better services to its customers- Market segmentation helps in identifying the needs of customers. By understanding the needs of customers, it can serve its customers by taking innovative approach. If an organization has innovative strategies for its customers, it helps the company in easily satisfying its customers.

1. Niche markets- It is defined as targeting a specific target audience by offering some unique product or service. These companies identify the specific need of the customers and offer the same. These companies only target high-class customers in their market segment. Organizations who are following niche market segment, usually offers the high quality products and services to the customers.

Company that cater to Niche market  

Apple (A standardised brand) caters to the niche market rather than target mass people. It focuses on the needs of high class target customers such as young generation or big businessperson’s. It prefers niche market by creating the awareness for its high standardised products.

Maslow’s need hierarchy theory by considering Apple products

Five needs come under Maslow’s need hierarchy theory. It has five needs named as physiological, safety, belongingness, esteem, and self-actualization. Apple as a niche market satisfies the higher need of customer that is self-actualization. It provides premium services because it believes that its products are effective as well as well engineered (Meyer, 2015).

Two relevant advertisements that  

1. Motivates a consumer to buy that product
2. Online advertising- It is an effective way to attract the customers. In addition, it can provide mass reach with the customers (Kireyev, Pauwels & Gupta, 2016). It is effective as most of the customers search online before deciding which brand to buy. Therefore, it is one of the effective advertising tools that motivate a person.
3. Television- It also one such effective too of advertising. It can cater the large number of audience worldwide. It provides advantage of sound, light, colour, and movement that persuade a consumer to buy a product. It also helps the companies to clearly state it uses, harmful effects as well as terms and condition of its use. Therefore, through advertising on television organizations are able to seek various benefits (Percy & Elliott, 2016).

1. Aims to create awareness among consumers

It is the main objective of advertising to create awareness among consumers. Advertisement on television gives a message to consumer and creates familiarity with the product. Creating awareness for the brand is also one such objective behind advertising of product. The selling of the product is also depends on the customer preference regarding the brand and its popularity. Both the advertisement strategies can create the awareness among people for the product (Al-Refaie & Bata, 2016).

1. Creates knowledge about the product or price

Advertisement on online sites and television helps the consumer in getting the knowledge regarding product and its price as well. When consumer searches the product online, online advertising reveal the whole information about product with its uses. Therefore, advertising on these two sites provides various benefits to its consumers.

1. Appeals to family, societal or environmental values

It is seen that advertising on television is done by giving an appeal. If the product is meant for some specific age group then it will be mentioned. Advertisement on television plays an important role in adding a message for society, family with the product. Whenever any product is meant some specific persons or age group only, it is clearly mentioned while giving the ads on television. It is not possible to convey a message on the magazines clearly, as various people do not prefer magazines in their daily life (De Mooij, 2018).

Retail business is almost 130 year old in New Zealand and Wellington is well known as the capital of New Zealand not only in the global map but also in the wealth section (Gardner & Sheppard, 2012). Retail federation was started in New Zealand in 1921 and was managed by chosen council selected by associations. For city like Wellington retail sector act as the important portion of economy because it holds the large portion of expenditure (Edwards et. al., 2008). Dominos is one of the largest fast food retail chains in the world by creating its presence with the help of franchise long chain. This growth in retail section is actually the growing buying power of the consumers due to lot of innovation in the technology like small starts to big giant business which is providing employment to the large portion of Wellington population (Chand, Eyles & Mhurchu, 2012).

Catering to Niche market: A Case Study of Apple

Segmenting: Entire population of Wellington is almost 0.25 million. In this population around 39% fits to the 20- 50 year age section and 12% of the population fits to the 11-19 years age section (Waters, Fraser, Maxwell & Rawlence, 2017). If both the age section will be combined, it will form around 51% of the total population of Wellington city.

Targeting: Domino’s actively wants to target almost every section of Wellington.  But according to the population segregation it main target should be youth part which comprise almost 39% of the population. Hence the Domino`s must focus on those areas which will near to University campus, colleges and offices.. The main target whom Dominos should keep on the top list will be age group of 16-50 years. According to demographic pattern, Dominos should attract that customer who is from both middleclass and upper middle class for the reason that these are the only section who spend their cash to adore the fast food within low price (DeSarbo, Grewal & Scott, 2008). Also their target should be those who want to take a break from their daily meal.

Positioning:

Domino`s should mainly focus on youth section both student as well as working because they form the majority of the population and these section money really matters (Natter, Mild, Wagner & Taudes, 2008). In order to gain their attention the Dominos will offer them meals within affordable price so that this section of population will think that they are getting more than what they are spending.

Although the overall focus of Dominos should be on youth but this section can be further divided in to two more sub sections.

College/University student

Price factor plays very important role in any students life and in this time if a product will be offered to them which seems to more valuable than its price, then this section will start attracting towards that product. Same idea will be follow by Dominos to keep their brand image positioned in the minds of this section. One Dominos will be able to position their brand image in the minds of the student; these students will automatically act as a kind of advocacy marketer for the company and will provide the Dominos a market which will not be easy for other player to target. 

Working youth

Similar price factor is also significant part for the working youth which will motivate this section to go for Dominos product but in addition to that this product will also act as a replacement or supplementary for their daily meal. This product will not only provide them a good food to enjoy within affordable price but also will provide them a place for formal meeting where they can share their gossips with each other to form a close bonding or form network.

Potential of each segment through attractiveness

This factor will be common for both the segment because for student life as well as for working youth, it is the time of exploring the world and try out new thing which can help them to understand which thing really works in this world (Parfitt, Barthel & Macnaughton, 2010).

Effective advertisement strategies and their benefits

Quality

This is another most important factor for both these section because quality is the main expectation which every customer already perceives in their mind while other that product or meal. Hence offering them quality product in such a low price will definitely trigger their need for this product in their daily busy life (Ryu, Han & Jang, 2010).

Offer formal meeting place

Every person in this world would love to discuss what happened with them on daily routine where they are students or working youths. Hence Dominos will provide them this place for formal meeting where they can discuss latest happening in their life with each other and many time this formal place will act as a most important platform for forming networks for future careers.

Discount offers

This factor will act as a supplement for attracting these two sections because this is one of most appreciable marketing strategy which is being used by giant companies to increase their customer base by providing attractive offers.

Target

From the above two segments the most favorable segment for Dominos will be students because they like these kinds of food while for working professional they are just supplementary choice for their daily meal and also they can spend more time with friends as compared to working young professionals. 

Positioning strategy

The strategy of Dominos for positioning their product in the minds of students will be providing them quality food in low price. As per many studies it has been found that often people form a very different perception related to price. For them low price is a kind of indicate for low quality. But here the Dominos will use a very unique positioning strategy which will be called as quality first. Under this strategy the Dominos will market their product in such a way that the people will believe that quality food can be available in low price (Postrel, 2018). For this the Dominos will display all the health nutrition’s contained in their food and will endorse it with the help of digital marketing as the mode of medium. Presently around half the world is connected to internet and same platform will be used by Dominos to promote their quality slogan in order to reach the maximum strength with cost efficiency. The company will make use of all tool available in social media like Facebook, Instragram , YouTube etc in which they will make use  of one of the popular health consultant which will explain the composition of essential notorious in their product. From various study it has been found that videos can form deep impression as compared to reading.

Conclusion

In order to capture the market of Wellington, Dominos has to mainly focus on the young population of the city because of their large percentage share in the total population. As it is known that competition in the fast food market is increasing day by day, dominos has to play very strategic role in capturing this market. With the help of price and quality related card the Dominos will be able to create its unique image in the minds of this segment by proving them that quality food can be available with in low price.

References

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