Segment and Segmentation A segment is a group of end-users that share a unique set of wants/needs and/or purchase behaviors Segmentation is the process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs Collins, Sean R,, Peter W. Dahlstrom, and Marc Singer(2006), "Managing Your Business as if Customer Segments Matter, in Profit from Proliferation, McKinsey Company, 85-95 O Copy rights reserved, Zou Deqiang 11
11 11 © Copy rights reserved, Zou Deqiang Segment and Segmentation • A segment is a group of end-users that share a unique set of wants/needs and/or purchase behaviors • Segmentation is the process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs Collins, Sean R., Peter W. Dahlström, and Marc Singer (2006), “Managing Your Business as if Customer Segments Matter,” in Profit from Proliferation, McKinsey & Company, 85-95. Collins, Sean R., Peter W. Dahlström, and Marc Singer (2006), “Managing Your Business as if Customer Segments Matter,” in Profit from Proliferation, McKinsey & Company, 85-95
Business and Consumer Travel Markets O Copy rights reserved, Zou Deqiang
12 12 © Copy rights reserved, Zou Deqiang Business and Consumer Travel Markets
Why Segment? End-users have a diversity of Wants Needs and Behaviors Consumers are people, and people are different In what ways are people different? (YES(NO >Segmentation base O Copy rights reserved, Zou Deqiang
13 13 © Copy rights reserved, Zou Deqiang Why Segment? • End-users have a diversity of ¾Wants, ¾Needs, and ¾Behaviors • Consumers are people, and people are different • In what ways are people different? ¾Segmentation base
Why Segment? Differentiated end-user segments Imply differentiated marketing mixes Increase the marketers ability to create value for end-users Segmentation enables a company to tailor its products and services to suit a distinct set of end-users Fact of Life Markets are already segmented If you do not target segments, someone else will O Copy rights reserved, Zou Deqiang
14 14 © Copy rights reserved, Zou Deqiang • Differentiated end-user segments: ¾Imply differentiated marketing mixes ¾Increase the marketer’s ability to create value for end-users • Segmentation enables a company to tailor its products and services to suit a distinct set of end-users Why Segment? Fact of Life Markets are already segmented. If you do not target segments, someone else will. Fact of Life Markets are already segmented. If you do not target segments, someone else will
Segmentation Base Geographic Demographic Region, City or Metro Age, Gender Family size Size, Density climate and life cycle, Race Occupation or income Psychographic Behavioral Lifestyle or Personality Occasions, Benefits, Uses, or Attitudes Farrell, Diana, Ulrich A Gersch, and Elizabeth Stephenson(2006), The Value of Chinas Emerging Middle Class, "McKinsey Quarterly, (Special Edition) O Copy rights reserved, Zou Deqiang
15 15 © Copy rights reserved, Zou Deqiang Segmentation Base Geographic Geographic Region, City or Metro Size, Density, Climate Demographic Demographic Age, Gender, Family size and life cycle, Race, Occupation, or Income .. Lifestyle or Personality Psychographic Psychographic Occasions, Benefits, Uses, or Attitudes Behavioral Behavioral Farrell, Diana, Ulrich A. Gersch, and Elizabeth Stephenson (2006), “The Value of China’s Emerging Middle Class,” McKinsey Quarterly, (Special Edition). Farrell, Diana, Ulrich A. Gersch, and Elizabeth Stephenson (2006), “The Value of China’s Emerging Middle Class,” McKinsey Quarterly, (Special Edition)