Memo to Pepsi

MEMO

To: Pepsi management team

From:

Date: dd/mm/yyyy

Subject: Importance and use of segmentation

When to use segmentation while making marketing decisions

Segmentation means that you divide the customers into separate groups based on their needs and likes and dislikes. After making segmentation your company can target those segments in order to earn maximum revenues.

It is really important to know as much as possible about your customers so that best match between your customer's needs and your products can be done.

There are various bases on which you can make segments for example demographic, geographic, psychographic and behavioral segmentation.

But before discussing when it is required to use these segments while making marketing decisions let's have a look at what these segments mean.

a) Demographic Segmentation

By demographic segmentation we mean that we create groups by dividing the market based on variables like gender, age, sex, income, education, occupation, religion, nationality and education.

The variables among demographic segmentation are the most common bases for making customer groups. This is just because customer needs are closely related to those variables like income, age etc. And if we see the practical application to apply this segmentation there is much more data available which can be used to make demographic segmentation process.

b) Psychographic Segmentation

Psychographic segmentation is done by dividing customers according to their personality, lifestyle, and values.

c) Geographic segmentation

This is done by offering products and services according to the needs of customers living in different countries, regions, cities, neighborhoods etc. We can't sell ice-cream in Antarctica and we can't sell winter clothes in hot regions.

d) Behavioral Segmentation

This segmentation is dependent upon the response of the customer for your product. It is based on your customer's behavior.

Segmentation is done in order to increase the customer base and also to expand and earn as much revenues as it can. It is needed because you cannot offer just one product for all. But in fact you need to identify that what are the needs of different customers and accordingly you need to design your product. For that you need to divide the customers into different groups and see whether it is profitable or not s it large enough or the access is easy to do or not.

If the company is willing and desiring for higher returns, then it needs to put its resources and efforts towards a specific goal and it needs to adopt the strategies to make different segments so it ...