Market segmentation is the division of a market into distinct groups of buyers who might require different products or marketing mixes (Kotler et al, 1994). It is the division of a heterogeneous market consisting of buyers with different needs and wants, into homogeneous segments of buyers with similar needs and wants. The markets may be divided by geographic region, demographics, psychographic, benefits sought, and behavioristic. The segmentation process involves five steps (Belch pg.40):.
1) Finding ways to group consumers according to their needs.
2) Finding ways to group the marketing actions-usually the products offered-available to the organization.
3) Developing a market-product grid to relate the market segments to the firm's products or actions.
4) Selecting the target segments toward which the firm directs its marketing actions.
5) Taking marketing actions to reach target segments.
I researched a few products that are made by "Suave" and their motto is that "looking great doesn't have to cost a fortune." Suave believes that consumers should bring the same shopping savvy to health and beauty products that you bring to food or household goods. When two products offer the same benefits and have similar ingredients on the label, give the less expensive one a try. A higher price may only reflect fancier packaging and not necessarily product quality. But having said that, it's wise to go with names you recognize and trust. Price is only one part of the equation, and it's not a value if you're not getting the quality you thought you were buying. I believe Suave's target market are value minded consumers whose attitudes are that value priced items give the same results as high priced items. As you can see from the grid below that Suave's products are considered high quality with a low price.
Hi Price .
Nexus X .
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Hi Quality Lo Quality.
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Ivory X .