Services Marketing

Chapter 6 : Market Segmentation and Targeting

Market Segmentation in Services

Undifferentiated Marketing Approach
Differentiated Marketing Approach
Concentrated Marketing Approach

Bases for Market Segmentation

Demographic Segmentation
Geographic Segmentation
Psychographic Segmentation
Behavioristic Segmentation
Benefit Segmentation
Purchase Occasion Segmentation
User Status Segmentation
Usage Rate Segmentation
Loyalty Segmentation
Buyer Readiness and marketing Factors

Requirements for Effective Segmentation

Measurability
Accessibility
Substantiability
Actionability

Process of Market Segmentation

Identifying Customer Segments
Developing Measures for Structural Attractiveness
Selecting Customer Segments

Market Targeting in Services

On What Basis do Marketers Target the Identified Segments
Segment Size and Growth potential
Targeting Strategies

Mass Customization

What are the Factors that Companies Need to Consider Before Adopting Mass Customization
What are the Various Approaches to Mass Customization

Chapter Summary

Companies have realized that though no two customers have the same preferences or needs at the same time, some of their purchasing patterns are similar. Therefore, marketers identify groups of customers who exhibit similar needs and offer products and services to these groups. Marketers call these groups segments. They segment customers on the basis of geograhics, demographics, psychographics, or on behavioral characteristics.

After segmenting the market, marketers analyze each segment on factors like profitability, compatibility, competitive advantage, and growth potential. A thorough analysis of these factors gives the marketer an idea of whom to target or which customer segment to target. There are five strategies to target a market segment.

These are single-segment strategy, selective specialization, product specialization, market specialization, and full-market coverage. Further, marketers develop various marketing mixes for different target segments by adopting any of these targeting strategies. A new topic called mass customization has evolved from the customers'desire to purchase products or services that can satisfy their individual needs.

Companies enjoy the advantages of mass production by adopting mass customization. At the same time, they satisfy the needs of individual customers. Companies that want to survive in the global environment have no other way but to accept and adopt mass customization to some extent, depending on their operations and resources. Marketers are developing new standards in customization to delight their customers.

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