RETAIL MARKET SEGMENTATION

1

Before Segmenting Retail Market, let us discuss the following 3 issues What is Market Segmentation? What are the factors that derive marketers to

segment their market or market of their product/service?

What are the bases for segmentation?

2

What is Market Segmentation?

Grouping customers depending upon their wants, which are governed by age, gender, lifestyle, aspiration, disposable income, esteem need, etc.

In fact, it’s a first and vital step of Strategic Marketing followed by Targeting and Positioning.

3

4

What is Segmentation

Segmentation Techniques

Based on Usefulness and Measurability

Low

U

sefu

lnes

s

Hig

h

Low Measurable High

Attitudes

Lifestyle

Ethnicity

Age

Generic need

sought

Income

Gender

socio-demographic segmentation

What are the factors that derive marketers to segment their market ?

Customer Fragmentation Efficiency Information Technology Resources

5

What are the bases for segmentation?

Geographic factors Demographic Factors Psychological Factors Psychographic (Lifestyle) Factors Socio-cultural Variables Use-related Characteristics Use-situation Factors Benefits sought Forms of Hybrid Segmentation

6

Segmentation of Retail Market

To segment the Retail Market we have to understand the Concept of Shopping and Shoppers because it is shoppers, whom we have to group in the background of their shopping pattern. Therefore, first we will learn about the concept of Shopping.

7

CONCEPT OF SHOPPING

Shopping is an activity that we perform with a high level of regularity and involvement. It is more than just a necessity – it is a desirable activity which appeals to the inherent nature of humans.

The concept of shopping can be understood from different perspectives – Shopping Environment Shopping in a Socio-cultural Context Shopping and an Individual

8

Shopping Environment

Economic growth, developments on public transport and new form of mass production contributed to the expansion of shops and the phenomenon of shopping.

9

10

Shopping in a Socio-cultural Context

We are basically a social species and most of us would like to spend some part of leisure time in socializing. Thus, markets are not only place to exchange goods and money but a place to see and be seen at.

Modern day shopping is a private place pursuit, involving the experience of wandering among crowd and responding to a wide range of stimuli.

11

Shopping and an Individual

People’s motives for shopping are a function of many variables some of which are unrelated to actual buying of products, which can be - Role-playing Diversion Self-gratification Learning about New Trends Physical Activity Sensory Stimulation

12

13

Now, let us discuss the

Shopping Process

14

The Shopping decision can be analyzed from two perspectives, viz. , the Decision Process the factors affecting the process

15

Decision Process

5 Basic steps: Identification of a need for the product or

service Information search Evaluation of alternatives Purchase Post-purchase behaviour

16

Factors influencing the retail shopper behaviour

Range of Merchandise Convenience of shopping at a particular

outlet Time to travel Socio Economic Background & Culture The Stage of Family Life Cycle

17

RETAIL MARKET SEGMENTATION

18

To increase their efficiency, retailers identify groups of customers (market segment) and target their offerings to meet the needs of typical customers in that segment rather than the needs of a specific customer.

A retail market segment is a group of customers whose needs are satisfied by the same retail mix because they have similar needs.

For example, families travelling on a vacation have different needs than executives on business trips. Thus, Marriot offers hotels with different retail mixes for each of these segments.

19

Criteria for Evaluating Market Segments

Customers are grouped into segments in many different ways. There’s no simple way to determine which method is best.

Four criteria for evaluating whether a retail segment is a viable target market are – Actionability Identifiability Accessibility Size.

20

APPROACHES FOR SEGMENTING RETAIL MARKET

-Consumer Behavior-Maslow’s Hierarchy Model

21

APPROACHES FOR SEGMENTING MARKETS

Consumer Behavior

22

Geographic Segmentation

Region of the countryUrban or rural

Climate, terrain, natural resources, population density, sub-cultural values, different population growths in different areas.

City size

23

Demographic Segmentation

Age

Gender

Family life cycle

Family income

Occupation

Education

Religion

Race

nationality

24

Geodemographic Segmentation

25

Psychographic Profile of Indian Shoppers(Men)

Traditional man- conservative, driven by values, cherishes family, avoid ostentation.

Pleasure seeker- self oriented person, driven by status and status symbol

Social chameleon- hypocrite of sorts who wants to project right image.

Intrinsic progressive man-believes in family values, equality of sexes, non-traditional

26

Psychographic Profile of Indian Shoppers(Women)

Contented conservative- house-wife who is happy with her state of life/society

Archetypal provider- believes of her role is to provide for and l;ook after the well being of her family

Anxious rebel- Working women, who is not happy with the existing state of affair.

Troubled homebody- House-wife who is not sure that she is doing the right thing by sitting at home.

Psychographic Profile of Indian Shoppers(Women)

Tight fisted traditionalist- Traditional women who believes in saving for tomorrow.

Affluent sophisticate- Affluent woman who is comfortable with the finer things of her life.

Contemporary housewife- Who plays an active role in her household and sees herself as equal to her husband.

Gracious hedonist- Working woman who believes in looking after herself.

Psychographic Profile of Indian Shoppers(Youth)

Homebodies- Traditional, low individuality, very few aspirations for self, morality, duty are core of their values.

Two-faced youths- Inwardly traditional, outwardly modern.

Wannabes- Materialistic show offs, want to be perceived as confident and cool.

Rebels- ??

Cool guys- they are influencers, others want to be like them. They bare confident and have strong sense of individuality.

Value & Lifestyle Profile of Indian Shoppers

Pre-independence shoppers- Anti British, take pride in India, support local products.

Post-independence shoppers- Idealistic, independent minded, sincere and hard working.

Pre-Rajeev Gandhi shoppers- Socialistic, anti-rich, license permit driver, ape and bait the west.

Post-Rajeev Gandhi shoppers- Capitalistic, global orientation, ape the west, tech. savvy.

30

Media graphics of Indian Shoppers(Men)

Media-mad fast trackers

Settled corpos

Couch potatoes

Sarkari babus

31

Media graphics of Indian Shoppers(Men)

Aiyappan sars

Common man

Retail patels

traditionalist

Media graphics of Indian Shoppers(Women)

Media-intense modern

Media medley south skews

Cine meenas

Kahani Kusum Ki Category

Media graphics of Indian Shoppers(Women)

Mrs. Traditionalist Category

Simple Sudhas

The Amma Brigade

Behaviour-based Segmentation

Choice Optimizers

Premeditated shoppers

Economizing shoppers

Support Seekers

Frequent Shoppers Vs. Infrequent Shoppers

Recreational Shoppers

35

Attitude or Orientation Based Segmentation

Post-purchase experience sharing

Managing Stress

Active Information Seeking

Exploring

Feeling Relaxed After Shopping

Loyal Shoppers

Bargain Seeking

“Go and Grab” shopping

List Sticking

Visiting Unplanned

Crowd Avoiding

36

APPROACHES FOR SEGMENTING MARKETS

Maslow’s Hierarchy Model

37

The notion that a comprehensive coverage of human needs can be organized into an understandable hierarchical framework is of obvious benefit.

If individuals are satisfying basic needs and seeking self-fulfillment, then the retailer has to understand the need to offer products which allow consumers the opportunity to fulfill their higher needs of self-improvement, the attainment of individuality, provide status and give some more meaning in life.

38

TYPES OF SHOPPER

Compulsive shopper Economic consumer Befriending consumer Ethical consumer Apathetic consumer Habitual shopper

39

Motivations are an important clue to the purpose and type of shopping individuals will undertake.

This helps retailers position their store to appeal to the different preferences based upon merchandise, price and quality.

This leads to decisions in terms of which type or types of shoppers to attract and how many of them are able to be targeted.

40