MARKET SEGMENTATION

Alduheza, Shynne B.
Bugais, Lislyn Megann D.
Flores, Chiena Mae S.
Espana, Lorebeth L.
Lo, Manuel Timothy Jude C.
Manzo, Marie Angeli F.
Tan, Marie Charmaine B.
 Marketers

identify individuals in the market who can

be served most effectively and profitably
use segmentation to identify similarities
within groups of consumers and benefit
from these similarities
 Marketers

Identify opportunities in the market.

Tailor a unique marketing mix.
Charge and receive higher prices.
Serve customers more efficiently.
Gain a competitive advantage.
Mass Marketing

attempts to serve the entire market

with the same marketing mix
no longer useful due to too much
competition for consumer demand
Definition of Terms

Market Segmentation
- dividing a market on the basis of
differences and forming subgroups
based on common characteristics
- goes hand in hand with targeting and
positioning
Segmentation
- identifies variables that can be used to
target desirable groups of individuals
Identifying Desirable Market Segments

identifiable
accessible
of sufficient size
responsive to the targeted marketing
mix
Selecting Segmentation Variables

through experience and intuition

adopting the ideas of others
analyzing customer data
 Segmentation Approaches
Empirical Hypothesis-Driven
based on professional tests hypotheses about the
experience or relationships between market
information colleccted segmentation variables and
from literature outcomes
resembles empirical gain insights about actual
treatment by and potential customers that
physicians and can be used to secure a
pharmacists competitive advantage
builds on information used in
empirical segmentation
rely on market research
techniques to identify
patterns of consumer
 Empirical Segmentation
Advantages Disadvantages
relies on marketer's
experience and ability to
complex
understand which variables
are useful
bombarded with
expensive as the amount of
tremendous amounts of
time devoted to it and the
information about
cost of the subcriptions to
customer behavior and
the publication
actions of competitors
time-tested
business owners rely on their
intuition and knowledge to
serve customers
 Hypothesis-Driven Segmentation

Advantages Disadvantages

uses methods from a variety of

the more rigorous
fields to gain greater
the methods used,
understanding of consumer
the higher the costs
behaviors and markets
Marketing Strategies Associated with
Segmentation
Differentiation Strategies
- selects two or more segments for
targeting
- attempt to select a portfolio of
products and services to meet the
needs of multiple customer groups

Focus Strategies
Niche: small, narrowly defined market
a. Niche / Microniche Strategies
- select a single, profitable segment that
offers the best opportunity for success
Characteristics of a Niche

large enough to be profitable

underserved or ignored by competitors
able to be exploited by the unique skills
and capabilities of marketers
Common Ways of Segmenting Markets

Demographic
Geographic
Psychographic
Behavioral
Benefits
Demographic Segmentation

most easily segmented

most common bases of segmentation
useful in developing targeting
strategies
variables: age, sex, income,
ethnicity,family size, ccupation,
education, family life cycle, religious
affiliation, nationality
Sources of geographic/demographic data
U.S. Bureau of Labor Statistics
U.S. Census Bureau
U.S. Department of Commerce
U.S. Internal Revenue Service
U.S. Social Security Administration
National Center for Health Statistics
Individual state and local government sources
Small Business Administration
Professional and trade associations and journals
American Demographics; Prevention magazine
Local chambers of commerce and libraries
Senior Market

users of prescription medications and

other forms of health care
fastest growing segment
with highest discretionary income
five variables for segmentation:
- discretionary income
- general level of health
- general activity level
- amount of discretionary time not taken
up with family, job, and social activities
- degree of social interaction with others
Cohort Segmentation

dividing consumers by age into a

cohort
Cohort: a group of people of the same
generation ; the same historical events
during formative periods
-Great Depression: thrifty
-Vietnam War: challenge authority
-Others: Depression Babies, Silent
Generation, Swing Generation,
Greatest Generaion, Baby Boomers,
Generation X, Generation Y, Millennials
Geographic Segmentation

permits pharmacists to target

patients on the basis of location
used to locate lucrative market
segments and target those segments
with promotional communications
variables: country, region,
metropolitan statistical area, city,
county, state, neighborhood, rural
Psychographic Segmentation

based on the premise that

consumers are influenced by
personality, lifestyle, and values
useful for shaping promotional
strategies, product development, and
communication decisions
uses psychological and socioogical
research methods
- identify consumer values, beliefs, and
attitudes
Methods of Psychographic
Segmentation
Personality Segment
-based on behavioral traits or
personality characteristics
a. compulsive
b. controlling
c. conservative
d. socializer
e. extrovert
f. need to achieve
Methods of Psychographic
Segmentation
Lifestyle Segment
Lifestyle: relates to the activities,
interests, and consumers' opinions
- reflects a group's priorities and
beliefs about various issues
- used to classify senior populations
 Barriers to
Segment Characteristics How to Reach Message
Treatment
remind,
obedient, trusting, pharmacists,
sometimes reinforce
Disciples highly compliant advertising,
forgetful benefits of
with therapies popular press
treatment
position
engaged, internet, treatment as
have string
adherent, trust medical patient-
Medical brands of
physicians but feel publications, physician
Buffs ideas, first to
in control of own brand-specific relationship,
switch brands
health ads stress brand
superiority
guerrilla
marketing,
position
distrust condition-
shun treatment as
traditional specific
pharmaceuticals in part of healthy
Naturalists treatments, website,
favor of holistic lifestyle,
anxious about nonbranded
remedies emphasize the
side effects ads, point-of-
natural
purchase
displays
family
devi-may-care deliver wake-up
members,
types, disregard ill-informed, call, clarify
Immortals peers,
physician's often in denial necessity for
telephone
Methods of Psychographic
Segmentation
Segmentation by Values
- identify values upon which people
base their lives and day
- includes: self-respect, security,
excitement, sense of fun and
enjoyment of life, having warm
relationships, self-fulfillment, sense
of beloging, accomplishment, being
well- respected
Psychographic Research and Drug Use

Realists
Authority Seekers
Skeptics
Hypochondriacs

According to Piepho:
Dissatisfied
Energetic
Sedentary
Combining Psychographic and
Demographic Variables
Ambivalent learners
Uncertain patients
Risk avoiders
Assertively reliants
 Behavioral Segmentation
uses information about consumer actions
and choices to group customers
deals with utilization of health care
services and products
criteria include:
- type of health insurance or plan choices
- frequency of visits to health care providers
- self-care habits
- prescription drug use
- nonprescription and heral medication use
- preventive care behaviors
- level of participation in pharmaceutical
care activities
Pareto Principle

a relatively small number of people use

a disproportionate amount of health
care services and products
approximately 80% of most problems
can be attributed to roughyly 20 of
their potential causes
pharmacists should target 20% of the
market associated with drug misuse,
health care spending, and other
behaviors
Types of Behavioral Segmentation

based on actual behavior

a. usage
- heavy, moderate, or light users
- disease management
- case management
b. occasion
- treating major and minor illness
- at home and on vacation
- for the respondents or for treating
family members
 c. user status and loyalty
- user status: previous use
- first-time, former, repeat, or potential
users
d. willingness to adopt innovations
Individuals Descriptions
first to adopt new ideas and products
venturesome, eager to try new things,
willing to take risks
Innovators
have a broader viewpoint, greater
education, and financial capability to
absorb failures
socially connected ad influenced by
Early Adopters innovators
(Opinion or sought out for advice, respected by
Individuals Descriptions
influenced by early adopters
Early careful, deliberate, willing to take more time in
Majority making decisions
well integrated socially
cautious and skeptical wth regards to
Late innovation
Majority
tend to wait to adopt innovations
traditional in outlook and look to the past in
Laggards decision-making
socially isolated and resist innovations
 based on potential behavior
- according to the readiness to buy or
act in some desirable manner
- unaware, aware, interest, evaluation,
trial, usage, repeat usage

based on a mix of actual and

potential behavior
- variables: at risk for drug-related
problems
Benefits Segmentation

according to the specific benefits the

customers seek
consistent with the total product concept
Customers Descriptions
seek the best product and
Quality buyers service without regard to
cost
Service look for personal and
buyers caring service
hunt for the best value for
Value buyers the money and expect
service to match the price
Economy
favor cheapest alternative
buyers
Consumers
of preventive
Descriptions
health
services
need and actively seek reassurance that they are
healthy
Hypochondri
tend to overuse health services
ac
good customers of vitains, self-diagnostic kits, and
prevenetive therapies
strive for a long, healthy life and use preventive care
as means to that end
Health actively participate in health behaviors
seeker actively seek information about healthy practices
and preventive sevices
respond to the marketing of healthy foods
like to brag how healthy they are
take great pride in how little the have needed to use
Band-Aider health care services
preventive health care is undesirable
Consumers
of preventive
Descriptions
health
services
use negative health behavior to cope up with the
Do not bug daily stresses of life
me.
avoid preventive health care
seek the guidance of others for preventive practices
seek advice from friends, family, other health
professionals
tend to do what others recommend but are skeptical
Follower that preventive health care will bring about the
promised improvements in health
more likely to put off health care until they get sick
unlikely to use vitamins, preventive remedies, or
attend health screenings
independent, self-reliant
Self-sufficient tend to be skeptical of traditional health care and
prefer self-treatment with nonprescription
 Segmentation for the Practising
Pharmacist
Goal: help identify and predict consumer
tendencies to act in specific ways

Pharmacists need to conduct research into

their needs and wants.
- Talk with Patients.
- Invite a group of patients to chat about
pharmacy services.
- Conduct surveys.
- Read the pharmacy and health care
literature.
- Use the internet.
- Mine patient files.
- Observe how customers shop.
- Test-market ideas.

Pharmacists can use segmentation to

target specific customer groups.
- Identify key market segments within your
practice.
- Learn as much as you can about the
segments in which you are interested.
- Describe a typical person in a market
segment.
- Determine the desirability of each
segment.
- Select those segments on which you
wish to focus and create a written plan
for each segment.
- Establish a budget for each segment.
- Develop measures for the success of
targeting efforts.
- Choose a future date when you will
reassess your marketing efforts.