In-Depth Analysis of Market Segmentation: Strategies and Examples

This report provides an in-depth analysis of market segmentation, a crucial tool for companies to understand and cater to customer demands effectively. It explores four main types of market segmentation: demographic, behavioral, psychographic, and geographic, using advertisements as practical examples. The report details how demographic segmentation targets specific groups based on age, gender, income, and other socio-economic factors, exemplified by a L’Oréal advertisement. Behavioral segmentation, illustrated by a Heinz advertisement, focuses on consumer buying habits and brand loyalty. Psychographic segmentation divides consumers based on lifestyle, interests, and opinions, while geographic segmentation considers regional differences. The analysis demonstrates how each segmentation strategy allows companies to tailor their marketing efforts and product offerings to specific consumer groups, ultimately enhancing customer satisfaction and brand loyalty. Desklib provides this assignment as a solved example to aid students in understanding market segmentation concepts and applications.

Running head: MARKET SEGMENTATION
Market Segmentation
The Name of the Student:
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1MARKET SEGMENTATION
Table of Contents
Introduction....................................................................................................................3
Literature Review...........................................................................................................4
Demographic Segmentation:......................................................................................4
Behavioural Segmentation:........................................................................................7
Psychographic Segmentation:....................................................................................9
Geographic Segmentation:.......................................................................................12
Conclusion....................................................................................................................14

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Executive Summary
Marketing segmentation is a tool that guides a company to serve customers products that
fulfil their demands. This report aims to provide a better understanding of how the market
segmentation works for companies. Different segments have different aspects, yet all of them
help a company to understand the market demand and classify it according to some
parameters in order to produce effective marketing strategy in a very cost-efficient way. With
the reference of four advertisements taken from various print sources, detailed
demonstrations of the four segments have been given. A detailed analysis has been done on
the advertisements to gain an improved perspective of marketing segmentation.

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Introduction
In order to increase profit, a company has to increase its sales. The sales of a company
are directly related to two factors, the company’s ability to attract consumers and to satisfy
their necessities. Both factors need effective and logical assessment of the target market,
which can be done by the segmentation of market. Segmenting a market is a procedure in
which the market is divided into different segments on the basis of some common traits and
choices1. It takes customers, both potential and existing, and breaks them into fragments.
Each fragment includes customers who have similar attributes and interests. The fundamental
concept of market segmentation is to provide customized products to the consumers to satisfy
their needs properly. Every person has some similar and some dissimilar qualities to other
persons. Consumers in today’s world are being more demanding and selective about their
purchases. On the other hand, the lifespan of a product in market is decreasing due to
powerful competition in the market. Hence, there is a need to observe and understand the
market thoroughly in order to produce the best possible products for the consumers and
increase their brand loyalty2. After the segmentation, it is possible to strategize marketing3
plans4 and prepare products according to the different categorical needs of the consumers.
Market segmentation efficiently helps the companies to target a specified market cost-
effectively. Age, gender, geographical position, religion, occupation, education, earning,
1Sharma, Deepak et al. "Market Segmentation". Ijaert.Org, 2015,
http://www.ijaert.org/wp-content/uploads/2015/01/131160.pdf. Accessed 3 July 2018.
2Romaniuk, Jenni, and Magda Nenycz-Thiel. "Behavioral brand loyalty and consumer brand
associations." Journal of Business Research 66.1 (2013): 67-72.
3Proctor, Tony. Strategic marketing: an introduction. Routledge, 2014.
4Jackson, Downtown. "Target Market Analysis". Jaxanchor.Org, 2018, http://jaxanchor.org/wp-
content/uploads/2015/02/Jackson-TMA-Market-Strategy.pdf. Accessed 3 July 2018.

4MARKET SEGMENTATION
attitude, emotion, hobbies are some variables on which the segmentation depends5. This
report is prepared to present an elaborate analysis of how market segmentation should be
done with reference to four advertisements as examples of each segment. After choosing an
advertisement for each category, descriptions have been given on how that advertisement
utilizes the specific segmentation to create a more attractive advertisement for its product.
Literature Review
Marketing segmentation is a tool to do an extensive market research in order to
identify the prospective market as per their requirement. It helps the company to recognise
the potential customers in order to approach them differently. Based on the variables market
segmentation can be of four types6.
Demographic Segmentation:
Diversity is one of the important features of a society. The choices change between
different religions and races. Diverse age group also has diverse preferences. In fact, men and
women of same age group, religion and race may have different inclinations. The variables
on which demographic segmentation of the target market depends are age, educational
background, gender, religion, income and other socio-economic factors in order to target the
market more efficiently7. Advantages of this segmentation is that it helps the company to
5Thomas, Jerry W. "Market Segmentation". Decisionanalyst.Com, 2017,
https://www.decisionanalyst.com/media/downloads/MarketSegmentation.pdf. Accessed 3 July 2018.
6Pratap, Abhijeet. "Types Of Market Segmentation". Cheshnotes, 2017,
https://www.cheshnotes.com/2017/02/market-segmentation-types/. Accessed 3 July 2018.
7Ahmed, Gulzar. "Definition & Types Of Market Segmentation | SLN". Studylecturenotes.Com, 2014,
http://www.studylecturenotes.com/mba-marketing/definition-types-of-market-segmentation. Accessed 3 July
2018.

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understand the needs of its market and to create advertisement that will be gender and age
appropriate and will fit their budget8.
L’Oréal group is a French company that sells personal care products. Currently it is
one of the largest companies that do business in cosmetics9. It produces hair and skin care
products, make up, hair colour, pefume, both in professional and consumer level, to its
worldwide customer range. Any business needs a thoroughly planned marketing strategy for
promotions, especially a brand like L’Oréal. It deals with skin care and make up where visual
convenience and trust is essential. Therefore the company has employed many celebrities into
their ahigh quality and visually attractive dvertisements. Identifying the target market is
crucial in advertising. L’Oréal uses demographic market segmentation to identify its target
market.
8Bhasin, Hitesh. "6 Advantages Of Segmentation - Benefits Of Market Segmentation". Marketing91,
2018, https://www.marketing91.com/6-advantages-segmentation/. Accessed 3 July 2018.
9"L'oréal - L’Oréal Group". Loreal.Com, https://www.loreal.com/. Accessed 2 July 2018.

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The above displayed advertisement aims to promote a new range of lipcolours named
as Infallible Lipcolours. The advertisement evidently targets women who are employed.
Hence the age range of targeted customers should be anything above 25 years. Attractingly,
this advertisement offers two products in one package, one is a lipcolour and the other is a lip
balm. L’Oréal promises that this new Infallible range of lipsticks will last till twenty four
hours. This specification is particularly created for working women who stays out for most of
the days time. Applying lipstick again and again is annoying and often inconvenient too.
A lipstick that promises to stay intact for twenty four hours will certainly turn their heads.
This new range of lipsticks have been produced with help of the all new gel technology that
keeps the colour intact for such a long time. Along with each lipstick, a lip balm is also
offered that acts as a conditioner. The lip balm conditions the lips and keeps them soft and
moisturised. This means L’Oréal is offering a package that keeps the lips coloured for a long
time and at the same time keeps them soft n smooth too. The two in one offer comes as
a lucrative one to those women who work for long hours, have dry lips and travel long
distance. Associating celebrities to utilize their fan base and appeal is a well practised device
in the world of advertising. L’Oréal had made contracts with several celebrities for
promotional purposes. Here, the company employs a prominent face of the music world
Beyoncé to promote their product. Using Beyoncé in the promotion indicates the companies
target to raise their brand equity10. Asociating with celebrities help to achieve greater sales
and profit using the huge fan base of that celebrity, which in this case is Beyoncé. It also
signifies that the product L’Oréal is selling is for women who are young or middle aged and
hard working. As this particular advertisemnet of L’Oréal targets the working women who
belong to middle class and upper class of the society, demographic segmemtation is the
correct choice for them.
10Buil, Isabel, Leslie De Chernatony, and Eva Martinez. "Examining the role of advertising and sales
promotions in brand equity creation." Journal of Business Research 66.1 (2013): 115-122.

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Behavioural Segmentation:
Different customer has different aspects while purchasing, some look for better
quality while some look for cheaper price. There are customers who wait for a discount to
buy an item; also, there are customers who never buy from a sale. Behavioural segmentation
strategy is to classify the customers based on the behavioural pattern of the customer while
buying a product. After observing the customers’ usage frequency of a particular product, the
qualities needed for purchasing, the timeline of the purchase, their brand loyalty; the
company groups together the buyers with similar buying habits11. This is how they keep
focused on their target market12 and their requirements. It means focusing on customer
satisfaction13 will give customer loyalty in return.
11Kampamba, Johnson. "An Analysis Of The Potential Target Market Through The Application Of The
STP Principle/Model". Mediterranean Journal Of Social Sciences, 2015. Walter De Gruyter Gmbh,
doi:10.5901/mjss.2015.v6n4s3p324.
12Aghdaie, Mohammad Hasan, and Maryam Alimardani. "Target Market Selection Based On Market
Segment Evaluation: A Multiple Attribute Decision Making Approach". International Journal Of Operational
Research, vol 24, no. 3, 2015, p. 262. Inderscience Publishers, doi:10.1504/ijor.2015.072231.
13Gichuru, Mwenda J., and Elsy K. Limiri. "Market Segmentation As A Strategy For Customer
Satisfaction And Retention". Ijecm.Co.Uk, 2017, http://ijecm.co.uk/wp-content/uploads/2017/12/51231.pdf.
Accessed 3 July 2018.

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H. J. Heinz Company which is more famously known as Heinz, is a company that
precesses food. The company was founded in 186914 and currently serving more than
a thousand of food products across the whole world. Among the various products that it sell,
tomato ketchupand sauce are still the most popular. Moreover, with each new generation, the
demand for fast food is growing. French fries, burgers, hot dogs, sandwiches, crispy fries –
no matter what the food item is, ketchup and sauce are always there beside it to enhance the
taste. Since ketchup are sauce are integral part of any fast food, its demand is also raising.
This 149 years old company has been creating many attractive and innovative advertise
thorough out the years. Such a long time in the food processing industry have gained them
a loyal consumer base.
14"Ketchup – Tomato Ketchup | Heinz Ketchup". Heinz.Com, https://www.heinz.com/. Accessed 2 July
2018.

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The object of this advertisement is to promote heinz products. Young generation is
trending towards fast foods like burgers, pizzas, fries and many more. Using the behavioral
segmenting approach, this advertisement targets the new generations who tend to consume
more fast food than others. The line in the advertisement says PASS THE HEINZ instead of
pass the ketchup or pass the sauce. This indicated that to mean one is in need of sauce is to
say one is need of Heinz sauce. Thois is a strong message that the company is conveying to
its customers. It is saying that there is only one true ketchup in the market which Heinz sells.
The minimalistic approach keeps it simple and straightforward, that if one has to buy ketchup
then it should be Heinz ketchup, as the other ketchups can never provide the taste and quality
that Heinz provides. Heinz is trying to promote their ketchup in the advertisement, and yet,
that ketchup is missing in the advertisement. This is another interesting technique of
advertising, to omit the product that is being advertised. This creates an additional interest in
the minds of the buyers. Insead of ketchup bottle or the word ketchup, the word Heinz is used
so that the consumers can easily associate the brand Heinz with their foods. This is also
majorly depends on brand loyalty. Heinz has been in the market of prcessed food for almost
150 years which allowed them the time to create a brand name. Along with thate brand name
came brand loyalty. The loyal customers only need to see the name Heinz on it and they will
give their attention to it. With the minimal use of words and the position of the brand name,
which is at the top written in bold, it is easy to attract the loyal customers.
Psychographic Segmentation:
Another way to segment market is to divide consumers based on the factors like
shared interests, common activities, lifestyle and hobbies, opinions and other usual aspects
that people share with each other. With this division, it is possible to separate the consumers
with common interests, lifestyle15 and opinions to target them specifically. This
15Weinstein, Art, and Dennis J. Cahill. Lifestyle market segmentation. Routledge, 2014.

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psychographic segmentation16 also helps to create advertisements that will derive the desired
reaction of a company from its target market. Understanding the psychology of a group of
people makes it easier and cost-efficient for a company to serve products and create
advertisements that will increase the consumer purchase.
Sime Darby is a Malaysia based trading company that deals in many sectors of
business. In the year of 2007, the Synergy Drive merger17 took place and the three companies
– Golden Hope, Sime Darby and Guthrie – joined together to create a single entity named
Synergy Drive. Later in the same year the name was changed to Sime Darby Berhad. Sime
16Jadczaková, Veronica. "Review Of Segmentation Process In Consumer Markets". Acta.Mendelu.Cz,
2013, https://acta.mendelu.cz/media/pdf/actaun_2013061041215.pdf. Accessed 3 July 2018.
17 Simedarby.com. (n.d.). History | Sime Darby Berhad. [online] Available at:
http://www.simedarby.com/company/history [Accessed 4 Jul. 2018].

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Darby Property is a part of the conglomerate that deals in the real estate industry and is one of
the largest corporations that develops property in Malaysia.
In this particular advertisement of Sime Darby, the company uses psychographic
market segmentation. Here, the object of the company is to promote and sale their Lifestyle
Collection and High Life Series – a luxuriously designed property which especially offers a
peaceful ambience amidst the chaotic city life. As a company that is trying to sale luxuriously
built properties, the target market18 for Sime Darby Property is obviously the upper class
people of the society who want to establish a statement through their lifestyle. The
advertisement is saying that the property has swimming pool and other activity zones for the
purpose of rejuvenating the people who will live there. In this way the company is attracting
people who want to indulge themselves in swimming or other refreshing activities after a
long stressful day or week. The picture used as a background in the advertisement gives a
preview of what the company is promising to provide its customers. It portrays a lavishly
designed pool and poolside area which confirms their promise of relaxation and luxury.
While selecting house or apartment, some people consider the spaciousness of the property as
the most valued aspect, while some prefers to select the design that has more practicality in it.
Semi Darby offers both. In their Lifestyle Collection, the company offers a range of properties
that is built to fulfill every criterion of the customer whether it is spaciousness or practical
designing or comfort. In the inset, the advertisement displays a picture of a model bedroom of
their High Life Series. The modernly designed luxurious and spacious bedroom has an
explicit view of the city. Many city people have this wish to have a clear view of the whole
city from their place. Sime Darby is offering that too through their High Life Series to their
customers. This series is for those people who prefer to live in an apartment based society or
community. This series assures the customers that it will provide proper privacy in their lives
18 Weinstein, Art. Handbook of market segmentation: Strategic targeting for business and technology
firms. Routledge, 2013.