Market segmentation is theprocess of dividing the total market into smaller subsets (segments) that have similar characteristics, needs or behaviors. Because each segment is somewhat homogenous, they are likely to respond similarly to a given marketing strategy. Market segmentation is widely used in the commercial arena as companies seek to better serve both existing and potential clients and more efficiently allocate their resources. For commodity security, market segmentation holds similar benefits.
Market segmentation analysislooks at current patterns of demand and use for reproductive health commodities and the characteristics of users—socioeconomic, sociocultural, and behavioral—in order to find better and more efficient ways to meet existing demand or generate increased demand. Market segmentation variables can include—
Demographic: age, gender, marital status, income
Geographic: location, urban/rural
Behavioral: risk-behavior, product use
Psychographic: personality, attitudes, beliefs.
A common segmentation variable for reproductive health commodity security (RHCS) is to look at use patterns by income or wealth quintile. A secondary analysis of the Demographic and Health Survey (DHS) data can reveal which sectors are supplying which segments of the population, by wealth. Stakeholders can work together to rationally divide or segment the total market by income levels. For instance, the public sector can decide to try to better target free or heavily subsided products and services to lower-income groups with limited ability to pay, while commercial providers can target higher income groups. Social marketing groups may target groups somewhere in the middle. Commodity security provides a mechanism to bring these different stakeholders together to better coordinate their efforts and improve service delivery to the total market through market segmentation.
The USAID | DELIVER PROJECT, with other USAID projects like the Health Policy Initiative and PSP-One, has been working with host country public and private sectors to conduct market segmentation analyses. With such efforts, countries will be able to improve contraceptive security through targeting and improved market segmentation.
The USAID | DELIVER PROJECT has assisted several countries in completing market segmentation analyses, including Bangladesh, Ghana, Nepal, Mali, Nicaragua, Bolivia, Georgia, Romania, Albania, and Paraguay. For example, the project recently assisted the Albania Family Planning Project (AFPP) in analyzing the contraceptive market and identifying policy issues that affect market segmentation and how the issues impact the long-term availability of contraceptives in Albania. One of the critical issues identified in Albania was the very low uptake of reproductive health services in the public sector among young people, which lead the sector to look for ways to make services more attractive to youth.
