• Levels of Market Segmentation

    Posted on December 2, 2011 by admin in Marketing.

    Level of Market segmentation can be anything in the below list based on the marketing plan of the marketer and the product attributes. For some products, it can be marketed to all the customers and some products it can only be marketed to only high income group. Product attributes and branding play an important role while finalizing the level of market segmentation

    Level of Market Segmentation can be

    1. Mass Marketing
    2. Segment Marketing
    3. Niche Marketing
    4. Local Marketing
    5. Individual Direct Marketing

    Mass Marketing

    In mass marketing the seller or the marketer of the product targets the mass market or the entire consumer base. Here the seller engages in mass production and uses the mass distribution system to reach all the customers in the market. The promotional and advertisements are very much generic in nature attract the entire consumer base.

    Mass market can be profitable for the seller as it leads to lower cost of production and higher margin due to mass production.  For mass marketing, the price is kept low to attract customers from all income level.

    At the same time, Mass marketing leads to high competition in the market and high advertising and promotional cost to reach to all the potential customers.

    One best example of mass marketing would be Mosquito coil, Toothpaste, Detergent etc.

    Segment Marketing

    In Segment marketing, the seller or marketer divides the market into different segments depending on the consumers’ buying behavior, requirements, purchasing power, location and age level. Segment marketing helps the marketer to connect to each type of customers in the best possible way. Most company uses different market segments to market its entire list of products which caters to different market levels.

    The promotional and advertising activities for a particular focus only to the target market for that product only.

    The best example is a passenger car marker which has different range of passenger cars catering to different segment of markets. Its low cost cars cater to comparatively lower income level consumer group, Mid range cars cater to mid range consumer base, luxury segment caters to high net worth consumer base and SUV segment caters to mainly tourism segment.

    Niche Marketing

    In Niche marketing, the seller caters to a very specific market segment which requires more attention and very high quality of services. Here the market segment size is very small which enables the seller to provide the niche area of services. The main requirements or characteristics of Niche marketing are

    • Customers have distinct set of needs or requires distinct set of services
    • Seller or service provider needs more skill or niche skill to provide niche services
    • Niches services come up with some more specialized services
    • Comes up with premium prices for higher quality and niche services

    Here in Niche marketing, the competition is usually lower which helps the service providers or sellers to ask for higher prices. Here the customers are either high net worth individuals (for product) or any organizations needs high end services to improve its competitiveness. Examples would be Harley Davidson which manufacturers very high end Niche bikes, Mckinsey which provides specialized consulting services. All these have a niche market for themselves.

    Local Marketing

    In Local marketing, the seller or the marketer only concentrates in the local market. The products also have the local appeal or the local usage and the promotional activities are planned based on the location only with local flavors.

    Here the cost remains high due to lower production and competition is also less. Marketer can concentrate more in the local market to reach to all the customers in the region. The best example would be marketing of regional TV channels; regional chain of hotels or restaurants, Locally produced food products etc.

    Individual Marketing

    It is almost same as Direct Marketing where the marketers target the individual customers separately either through direct communication channels or salesmen. This is mostly used for Business-to-Business marketing where more attention is required to market a product or services.

    Sales persons are used to meet each individual prospective customer and provide demo of the product or services. Best example would be specialized IT services or Aquaguard water purifier. Eureka Forbes uses direct salesmen to visit different houses and sell their famous water purifier product Aquaguard after providing the proper demo and information about the product.

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