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MARKET SEGMENTATION

SEGMENTATION

Benefits of Market Segmentation

 Understand needs of consumers of that segment


 Allocation of marketing budget
 Meeting competition effectively
 Can design effective marketing programs ( 4 P’s)
 Also benefits the target consumers
 Provides opportunities to expand market
 Encourages innovation
SEGMENTATION

Levels of Segmentation

 Mass Marketing
 Micromarketing
– Segment
– Niche
– Local areas
– Individual
SEGMENTATION

Patterns of Market Segmentation


 Homogeneous Preferences
All consumers have similar preferences

 Diffused Preferences
Consumers have scattered preferences i.e. varied
preferences

 Clustered Preferences
Consumers have distinct preferences
SEGMENTATION

EFFECTIVE SEGMENTATION

Market segments should be:


 Measurable
 Substantial
 Accessible
 Differentiable
 Actionable
SEGMENTATION

BASES FOR SEGMENTATION

1. Geographic Segmentation
2. Demographic Segmentation
– Age & Life-Cycle Stage
– Gender
– Income
– Generation
– Social Class
SEGMENTATION

BASES FOR SEGMENTATION

3. Psychographic Sementation
– Lifestyle
– Personality
– Values
SEGMENTATION

BASES FOR SEGMENTATION

4. Behavioural Segmentation
– Occasion
– Benefits
– User Status
– Usage Rate
– Loyalty Status
– Attitude
– Buyer-Readiness Stage
SAMPLE SEGMENTATION-
For Cosmetics

DEMOGRAPHICS

Region: Mumbai and Delhi, metros of India


Occupation: Students and Professionals
Income: 600,000 p.a. +
Education: Graduates, Post-graduates,
professionals
Sex: Female
Religion: Insignificant
Social class: Upper
Family life cycle: Young, single
SEGMENTATION- For Cosmetics

PSYCHOGRAPHICS
Lifestyle:
She’s the new age generation, fashion conscious
and takes care of her image. Cosmetics are a feel
good factor for her, which she showcases. She’s
keeps up with the trends and has her hand on
the pulse of the what’s en vogue. She’s a
conformist looking for a unique twist, with a
subtle narcissism about her.
SEGMENTATION- For Cosmetics
BEHAVORIAL

 Occasions: Would-be regular user as above


 Benefits: Enhances beauty, Unique colors, Highest quality
ingredients, Environment friendly packaging
 User status: Current young consumers of Premium priced older
brands
 Loyalty status: None
 Readiness Stage: Inquisitive (may recognise brand from
international communications)
 Attitude toward product: Enthusiastic, positive
SEGMENTATION- For Cosmetics
· She is the kind of woman who loves life
· She is positive in her attitude towards life
· She has an individual point of view and will act according to her whims
· She is well groomed
· She shops with her friends
· She shops for pleasure and on impulse
· Dressing up is a part of her normal routine
· She works hard but parties harder
· She is well travelled and is aware of the international brands
· She is very quality conscious
· She is class conscious
· She is looking for variety more than anything else
· She needs to be made to feel special & unique
· She needs to be flattered and valued
· She wants to be seen at all the best places in town
· She eats at the best restaurants and parties at the best night clubs
· She is a regular party person
· She reads magazines like ELLE, COSMOPOLITAN etc
· She knows what she wants in life and knows she will get it eventually
· She is a fulfilled person
TARGETING
MARKET TARGETING

SELECTING TARGET MARKET

 Single Segment Concentration


– This is concentrated marketing in which the company gains
a strong knowledge of the segment’s needs & achieves a
strong market presence.
– The firm enjoys operating economies through specialising
its production, distribution & promotion. If it captures
leadership , then high return on investment..
– But if the demand for the product stops then it’s a risky
proposition.
SINGLE SEGMENT
CONCENTRATION
MARKET TARGETING

SELECTING TARGET MARKET

 Selective Specialisation
– Firm selects a number of attractive segments.
– There maybe little or no synergy between the
segments.
– Advantage is to diversify the risks.
SELECTIVE SPECIALISATION
MARKET TARGETING

SELECTING TARGET MARKET

 Product Specialisation
– Firm makes a product that sells to different segments.
– The product could have variations for various market
segments
– Builds a strong reputation in the specific area
– Disadvantage is that the product could be replaced by a
different technology.
PRODUCT SPECIALISATION
MARKET TARGETING

SELECTING TARGET MARKET

 Market Specialisation
– Firm focuses on offering products to a single
market segment.
– It gains reputation in serving this customer group
– Addition of different products is possible
MARKET SPECIALISATION
MARKET TARGETING

SELECTING TARGET MARKET

 Full Market Coverage


– Firm attempts to serve all customer groups with
all products they need.
– Very large firms can undertake a full market
coverage strategy.
– Large firms can cover full market through
differentiated or undifferentiated marketing.
FULL MARKET COVERAGE
MARKET TARGETING

UNDIFFERENTIAITED MARKETING
 Ignore market differences
 Designs one product & marketing program
 Appealing to broadest number of buyers
 Mass production,mass distribution & mass
advertising
 Low cost of production, inventory, marketing,
transportation
MARKET TARGETING

DIFFERENTIAITED MARKETING

 Firm operates in several segments & designs


products for each segment
 Higher product modification costs
 Higher administrative costs
 Higher inventory & promotion costs
PRODUCT POSITIONING
PRODUCT POSITIONING

Defn.:- “ Positioning is the act of designing the

company’s offering & image to occupy a


distinctive place in the mind of the target
market.”

The end result of positioning is a successful creation of


a customer-focused value proposition
PRODUCT POSITIONING
How many ideas to promote?
 Mostly marketers promote one central benefit
 Brand should tout itself as “leading”
 More benefits may lead to disbelief or loss of clear
positioning
 Avoid 4 positioning errors
– Underpositioning
– Overpositioning
– Confused positioning
– Doubtful positioning
PRODUCT POSITIONING
Different Positioning Possibilities
 Attribute Positioning
 Benefit Positioning
 Application Positioning
 User Positioning
 Competitor Positioning
 Product Category Positioning
 Quality/ Price Positoning
PRODUCT POSITIONING
Communicating the Company’s Positioning

“To (target group & need) our (Brand) is


(concept) that (point-of-difference).”

Eg To working wives who have less time for


household work, Kitchenqueen is a
dishwasher that offers you quality time & freedom
from slavery of household work.
PRODUCT POSITIONING

Communicating the Company’s Positioning

 This positioning strategy determines how


the elements of Marketing-Mix need to be
chosen.
 Also based on positioning strategy Marketing
plans need to be drawn out.
DIFFERENTIATION

“Differentiation is a process of adding a set of


meaningful & valued differences to distinguish
the company’s offering from competitors’
offerings”
DIFFERENTIATION

The differences should be:


 Important
 Distinctive
 Superior
 Preemptive
 Affordable
 Profitable
DIFFERENTIATION

Various Differentiation Tools

1. Product Differentiation
Eg. Form, Features, Performance Quality, Conformance Quality,
Durability,Reliability, Repairability, Design
2. Service Differentiation
Eg. Ordering Ease, Delivery, Installation, Customer Training,
Maintenance & Repair
3. Personnel Differentiation
Eg. Courtesy, Credibility,Reliability, Responsiveness
Communication
DIFFERENTIATION

Various Differentiation Tools

3. Channel Differentiation
4. Image Differentiation:
eg. Symbols, Colors, Slogans & Special Attributes,
Physical Plant, Events & Sponsorships

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