Tuesday, October 30, 2007

Segmentation and Demographics


If one were to actually try and understand the progression of the various bases on which segmentation is done, it initially started with use of basic demographic variables like age, income, education levels to segment the market. And moved on to non-demographic traits like values, tastes and preferences with the hope that these variables would have more influence on consumer purchases than their demographic traits.


The recent article in Harvard Business Review "Rediscovering Market Segmentation" has criticized that segmentation has become more of psychographic profiling diverting it from the original and true purpose of discovering customers whose behavior can be changed or whose needs are not being met. And the purpose of segmentation has become narrowly focused on the needs of advertising, which it serves mainly by populating commercials with characters that viewers can identify with.


But coming to the Indian context one can see many successful applications of the most elementary of segmentation variables that is sex or gender to design and market products which have been very successful in catering to a new segment of the markets which had not been tapped by the industry. The example of this trend is the case of the introduction of Emami Fair and Handsome, a fairness cream targeted at men. This was based on the findings that men were using fairness cream meant for women and there was a need to introduce a new fairness cream for men. And companies like Madura Garments which introduced the Allen Solly Women's Wear based on their finding that women buyers were behind the rapid sales of sizes 26 and 28 in its men's trousers.


Though one might want to keep moving to more and more complicated bases on which to segment the market but going back to basics in terms of understanding differences in consumer needs might not be a bad idea..............

1 comments:

Varun Reddy Sevva said...


If one were to actually try and understand the progression of the various bases on which segmentation is done, it initially started with use of basic demographic variables like age, income, education levels to segment the market. And moved on to non-demographic traits like values, tastes and preferences with the hope that these variables would have more influence on consumer purchases than their demographic traits.


The recent article in Harvard Business Review "Rediscovering Market Segmentation" has criticized that segmentation has become more of psychographic profiling diverting it from the original and true purpose of discovering customers whose behavior can be changed or whose needs are not being met. And the purpose of segmentation has become narrowly focused on the needs of advertising, which it serves mainly by populating commercials with characters that viewers can identify with.


But coming to the Indian context one can see many successful applications of the most elementary of segmentation variables that is sex or gender to design and market products which have been very successful in catering to a new segment of the markets which had not been tapped by the industry. The example of this trend is the case of the introduction of Emami Fair and Handsome, a fairness cream targeted at men. This was based on the findings that men were using fairness cream meant for women and there was a need to introduce a new fairness cream for men. And companies like Madura Garments which introduced the Allen Solly Women's Wear based on their finding that women buyers were behind the rapid sales of sizes 26 and 28 in its men's trousers.


Though one might want to keep moving to more and more complicated bases on which to segment the market but going back to basics in terms of understanding differences in consumer needs might not be a bad idea..............

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