Market Segmentation: Does One Size Fit All

With the changing players in the supermarket industry in Kenya, the conversation most
businesses could be having is how to segment the market to improve and increase sales.

So, What is Market Segmentation?

It’s the division of a market into distinct groups of buyers that require different products
of marketing mix. Targeting the marketing mix helps minimize differences between
respondents within each segment and maximize differences between each segment
A key factor is finding little differences to give a business the marketing edge. A
business that targets speciality markets can promote its products and services more
effectively than a business aiming at the "average" or “broad” customer base.
Opportunities in marketing increase when segmented groups with varying needs and
wants are recognized. Markets can be segmented or targeted using a variety of factors.

The bases for segmenting consumer markets include:
 Demographic bases (age, family size, life cycle, occupation)
 Geographic bases (states, regions, countries)
 Behavior bases (product knowledge, usage, attitudes, responses)
 Psychographic bases (lifestyle, values, personality)

Marketing Segmentation Approaches

Demographic Geographic Behavior Psychographic
Age Country Occasions Lifestyle
Family Size County Degree of Brand loyalty Social Class
Occupation City Usage Social Values
Income Climate Benefits Sought Attitudes
Education Population User Status AIOs[activity,
interest, opinion]

Bus Station

Let’s look at Safaricom
At a 30,000ft level:
1. Do they segment their market?
2. How are their products segmented?
3. Do they have product segmentation?
Safaricom talks about their customers

Why Use Market Segmentation?

There are many good reasons for dividing a market into smaller segments. The primary
reasons:
Easier marketing. It is easier to address the needs of smaller groups of customers,
particularly if they have many characteristics in common (e.g. seek the same benefits,
same age, gender, etc.).
Find niches. Identify under-served or un-served markets. Using “niche marketing,”
segmentation can allow a new company or new product to target less contested buyers
and help a mature product seek new buyers.
Efficient. More efficient use of marketing resources by focusing on the best segments
for your offering— product, price, promotion, and place (distribution). Segmentation can
help you avoid sending the wrong message or sending your message to the wrong
people.

When Do You Use Market Segmentation?

Any time you suspect there are significant, measurable differences in your market, you
should consider market segmentation. Identified segments must be:
Big enough. A market must be large enough to warrant segmenting. Don’t try to split a
market that is already very small.
Different. Differences must exist between members of the market and these differences
must be measurable through traditional data collection approaches (i.e., surveys).
Responsive. Once the market is segmented, you must be able to design marketing
communications that address the needs of the desired segments. If you can’t develop
promotions and advertising that speak to each segment, there is little value in knowing
that those segments exist.

Reachable. Each segment must be reachable through one or more media. You must be
able to get your message in front of the right market segments for it to be effective. If
one-eyed, green aliens are your best marketing opportunity, make certain there is a
magazine, cable program or some other medium that targets these people (or be
prepared to create one).
Interested in different benefits. Segments must not only differ on demographic and
psychographic characteristics, they must also differ on the benefits sought from the
product. If everyone ultimately wants the same things from your product, there is no
reason to segment buyers. However, this is seldom the case. Even commodities like
sugar and paper plates can benefit from segmentation.
Profitable. The expected profits from expanding your markets and more effectively
reaching buyer segments must exceed the costs of developing multiple marketing
programs, re-designing existing products and/or creating new products to reach those
segments.