Exam Prep: TU MBS Marketing
Unit 4: Market Segmentation

Unit 4: Market Segmentation

* Focus: Dividing a heterogeneous market into smaller, homogeneous groups.

1. Core Definitions (Entry Points)

Market Segmentation Dividing total market into smaller groups with distinct needs/behaviors.
Target Market Specific sub-markets a firm chooses to focus on and serve.
Consumer Market Products purchased for individual/household use.
Business Market Purchased for further production, resale, or institution facilitation.
Product Positioning Showing targets how brand differs within their minds.

2. High-Yield Strategic Points

Requirements for Effective Seg.

  • Measurability: Quantify behavior & size.
  • Substantiality: Must attract ENOUGH customers (profitable).
  • Actionability: Firm has resources to act.
  • Accessibility: Reachable via distribution/comms.

Consumer Variables

  • Geographic: Region, density, climate.
  • Demographic: Age, income, life cycle.
  • Psychographic: Lifestyle, personality.
  • Behavioural: Brand loyalty, benefits sought.

Business Variables

  • Geographic: Physical location.
  • Demographic: Industry type, user size.
  • Operating: Technology, usage rates.
  • Purchase-Related: Structure, negotiation periods.

Benefits of Segmentation

Identify opportunities, tailor strategic planning, achieve resource efficiency (withdraw from unprofitable segments), and market specialization.

3. Visual Blueprints (Must Draw!)

Model 1: 5-Stage Segmentation Process
1. Survey Data collection 2. Identify Similar needs 3. Profile Similar/Dissimilar 4. Select Evaluate contribution 5. Position Mind-share
Model 2: 6 Market Coverage Patterns
1. Single Segment 2. Multi-Segment 3. Full Market (e.g. Coke) 4. Product Specialization (One product, all markets) 5. Market Specialization (All products, one market) 6. Niche Marketing Ignored gap!

4. Exam Triggers & Keywords

High-Probability Questions:

  • 5-Mark: Define Market Segmentation and list requirements for effectiveness. OR Explain benefits of segmenting.
  • 15-Mark: Discuss variables used for consumer/business mkts. OR Describe step-by-step process & target selection.

"Must-Include" Keywords

  • Substantiality: Ability to attract enough customers to be profitable.
  • Actionability: Firm's capability/resources to serve.
  • Segment Invasion Plan: Strategy to enter one market, then attack others later.
  • Super-Segmentation: Combining segments to save resources (similar mix).

5. Final Review Canvas (Nepal Context)

1. Topic Overview

Concept: Dividing heterogeneous markets into homogeneous sub-sections.
Kotler/Stanton: Focus on "homogeneity" & distinct marketing mixes.
Benefits: Better customer understanding, strategic planning, & resource use.

2. Strategic Framework

Requirements: Measurable, Substantial, Stable, Accessible, Actionable.
Process: Survey $\rightarrow$ ID $\rightarrow$ Profile $\rightarrow$ Select $\rightarrow$ Position.
Bases: Consumer (Geo, Demo, Psych, Behav) / Business (Op, Purchase).

3. Nepal Practical Context

Topography: Markets segmented heavily by Mountain, Hill, and Terai regions.
Climate: Based on local weather (e.g., Kathmandu winters).
Niche vs Mass: Niche marketing (e.g. TATA Nano in specific hills) vs. Full Market (e.g. Coca-Cola).