The Marketing Environment

PESTEL Factors

The Marketing Environment
Political - Legal Considerations
Component of the marketing environment consisting of laws and
interpretations of laws that require firms operate under
competitive conditions and to protect consumer rights
Political-Legal Considerations
Government Regulation
Procompetitive Laws
Consumer Protection Laws
Deregulation Laws
Legal and Regulatory Forces
Carbon Credits
Procompetitive Legislation (Antitrust Laws,
MRTP) v Protectionism
Preserve competition
Prevent restraint of trade and
monopolizing of markets
Prevent illegal competitive
trade practices
Political-Legal Considerations
Government Regulation
Laws enacted to protect consumers against unscrupulous
producers
Many of major consumer protection laws enacted during past 40
years
Consumer Protection Laws
Legal and Regulatory Forces (contd)
Consumer Protection Legislation
Adulterated and mislabeled food and
drugsGreen Dot, MRP
Deceptive trade practices and the sale of
hazardous products..Cigarettes, Liquor, Ban of
sales promotions in Norway
The invasion of personal privacy and the misuse of
personal information by firmsDoctors (MCI),
DND
Parlesuffering?
Maharashtra FDA
Pineapple and orange cream biscuits
Ambiguous laws
In a first-ever instance, global consumer goods giant Hindustan Unilever is under
government lens for making tall claims on its malted beverage Kissan Amaze' by
declaring that it gives 33% key brain nutrients required by children daily. The
multinational's claims are being investigated by a committee set up by the Food
Safety and Standards Authority to study whether the company violated certain
regulatory provisions relating to misleading or deceptive food claims.

"We have set up a committee specifically to examine claims made by Hindustan
Unilever and see how scientific they are. The company has submitted data which
the committee will examine and give its report by December," Food Safety and
Standards Authority chairman PI Suvrathan told TOI, adding "after which we will
have a detailed procedure in place on misleading advertisements on food and
beverages".

When contacted a HUL spokesperson said: "We had received a communication
from government about two months back and in response to that we had
submitted to the government all the research work and all technical inputs to
satisfy the concerned authorities that our claim is fully justified. We believe that
we have satisfied the government authorities as we have answered all the queries
raised".

Hindustan Unilever launched Kissan Amaze in February last year a specifically
designed brainfood for school going children. Amaze is being test-marketed in
Tamil Nadu, Karnataka and Andhra Pradesh. The company says that each serving of
Amaze provides the right type of brain nutrients, in the right combination, giving
children 33% of their required nutrients for mental development.


The five-member committee headed by Vasantha Muthuswamy, former
deputy director general Indian Council of Medical Research, will look into
such claims relating to brain development to establish whether these are
supported by scientific evidence. The company's product may also be
tested by scientists and experts. The committee will also study whether
these claims have an adverse impact or discourage healthy eating habits
of children.

Several food and consumer goods companies are airing advertisements or
printing labels that promise health, wellness with a whole lot of nutrients.
Most consumers are misguided and confused by such claims and have no
ways of knowing whether these are actually true. HUL and many such
companies will now be investigated under Food Safety and Standards Act
which says that advertising and communication in food and beverages
sector should not be misleading or deceptive.

There should be no false or misleading representation concerning the
usefulness of food in advertisements and food labels, and which may
exploit consumers' lack of experience or knowledge.

Committee will make recommendations regarding supporting evidence
required for food claims, and whether such claims can be allowed without
advertisements.

Consumer Protection Act
1986
6 rights
Safety
Information
Choice
Representation
Redressal
Education
Political Forces
Reasons for Maintaining Relations with Elected
Officials and Politicians
To influence the creation of laws and regulations affecting
industries and specific businesses
Governments are potentially large customers
Political officials can assist in securing foreign markets
Taxes
Exproporation

In 2005, Michael S. Dells namesake company was getting pounded. His competitors were
selling personal computers and servers built on cheap, popular and powerful chips from
Advanced Micro Devices, while Mr. Dell had stuck loyally with slower chips from Intel.
In an e-mail note to Intels chief executive, Paul S. Otellini, Mr. Dell threatened to switch to
A.M.D. I am tired of losing business, Mr. Dell wrote. We are losing the hearts, minds and
wallets of our best customers.
Mr. Otellini reminded Mr. Dell that Intel had paid Dell more than $1 billion in the last year.
This was judged by your team to be more than sufficient to compensate for the
competitive issues, he wrote. Dell delayed buying A.M.D. chips, and Mr. Otellini said in a
later e-mail message to a colleague that Dell was the best friend money can buy.
Such payments to PC makers, along with other aggressive business tactics, are at the heart
of the antirust lawsuit filed against Intel on Wednesday by New Yorks attorney general,
Andrew M. Cuomo. Mr. Cuomos case the first antitrust charges against the company in
the United States in more than a decade follows similar actions by regulators in Europe
and Asia.
According to Mr. Cuomos lawsuit, Intel, the worlds largest chip maker, has for years used
large rebates and co-marketing arrangements to talk Dell and other manufacturers into
sticking with its products rather than increasing their businesswith A.M.D., a much smaller
chip maker.
Intel, based in Santa Clara, Calif., is no stranger to antitrust controversy. The company has
spent the last five years defending itself against antitrust allegations, first in Asia and then
in Europe.
In May, the European Commission hit Intel with a record $1.45 billion fine for antitrust
violations, which the company is appealing. Intel also faces a four-year-old antitrust lawsuit
filed by A.M.D. in Federal District Court in Delaware and a continuing investigation by the
Federal Trade Commission.
Although Intel has faced various antitrust claims for two decades, the cases against it have
picked up steam in recent years because of developments in the chip industry.
In 2003, A.M.D., Intels longtime nemesis, began selling a new line of chips widely regarded
as superior in design and performance to Intels products. The chips were good enough to
lift A.M.D. from the PC market into the higher-profit server computer market for the first
time and begin selling to Hewlett-Packard, I.B.M. and Sun Microsystems.
It took Intel about four years to come up with chips that matched or surpassed A.M.D.s
products in performance.
While A.M.D. did well both in sales and market share gains during that period, the
companys top executives have long argued that it could have sold far more products had
Intel not used strong-arm tactics to blunt its advantage.
The major complaints surrounding Intel concern its use of rebates and marketing dollars to
keep customers. The New York suit argues that Intel executives threatened to take away
such incentives from customers if they did more business with A.M.D.
In addition, the lawsuit contends that if businesses were close to buying A.M.D.-based
computers from a company like H.P. or Dell, Intel would jump in to help the computer
makers sell Intel-based machines at a large discount.
Over all, the hardware makers often became dependent on Intels incentives to keep their
computer businesses profitable, making them reluctant to make a meaningful shift to
A.M.D., the lawsuit said.
The Marketing Environment
The competitive forces environment includes the number and type
of competitors, along with the market share each holds
Competitive Forces
The Marketing Environment
The social forces environment requires marketers
to stay abreast of cultural developments, changes
in consumer values, and social trends
Social Forces
Social and
Cultural Change
the way in which we lead our lives is also
changing: lifestyles and values
greater emphasis on quality of life
changing gender roles
different attitudes toward physical activity,
exercise, and diet among certain segments
increased emphasis on quality and value
environmentalism has affected marketing
increased demands for convenience
Trends in
Attitude Change
Changing male/female roles
Emphasis on quality of life
Growing interest in physical fitness, health and
wellness
Growing focus on service quality
Some aging population
Growing environmental awareness and
concern

Tea is British, Coffee American habit
Thanda matlab
Cadbury Temptation Kashmir ad
Haigan Daez
McDonalds Beef Burgers in India, cuisine in
France
Muslim boycott of American brands
Christianity in EU Constitution
China 2007 Year of the Pig



Unilever detergent ads in Mexico
Whirlpool tough stains in India
Henko experience
Whirlpool.usage in Punjab
GMs Nova in Spain
Diesel?
Dell Direct Sales in China!
Good Housekeeping in Japan
Death by Colgate! Spain

4 banned in China DMV death!
Never touch the head of a Thai localite
Bulgaria nod means no
The OK sign..money in Japan, vulgar in Brazil, zero in
France
Jews and German products
Bicycle exports?
Washing clothes warm (India), cold (australia), hot
(france)
Burping Arab v US!
Shiekh first class travel
United Airlines Hong Kong concierge carnation
Unilever in Brazil butter

Islamic Traditions
Shariah Quran
Ramzan
Social justice and equality
Women
Banking.No interest
Unethical businesses pork, alcohol, media


The Marketing Environment
Population and Demographics
Population growth
Population age mix
Ethnic markets
Educational groups
Household patterns
Geographical shifts
Marketing Environment
Economic Conditions
Economic factors that influence
consumer buying power and marketing strategies
Income
Resource Available
Inflation
Business Cycles
Business Cycles
Economic Conditions
Recession
Increasing unemployment
Reduced consumer spending
Reduced business opportunity
Recovery
Declining unemployment
Increased consumer spending
Increased business opportunity
Prosperity
Low unemployment
High income
Growth of FMCG business in India
Expansion of investments.and recession
Economic Conditions
Economic Conditions
Economic factors that influence
consumer buying power and marketing strategies
Income
Resource Available
Inflation
Business Cycles
Economic Conditions
Economic Conditions
Economic factors that influence
consumer buying power and marketing strategies.
Income
Resource Availability
Inflation
Business Cycles
Resource Availability
Economic Conditions

If resources are available
Prices decrease
Demand increases

If resources are not available
Prices increase
Demand decreases
Economic Conditions
Economic Conditions
Economic factors that influence
consumer buying power and marketing strategies
Resource Available
Inflation
Business Cycles
Income
Income
Spending More
Bottom of Pyramid
Need more exclusivity
Decreased savings, more spending on eating
out, clothes, personal care, durables (1999-
2009).
Age
Impacts product categories purchased
Entertainment, fast food, baby products, education.
Mobiles, automobiles.
Airtel prepaid @ 5
Levis Sykes
Titan Fastrack
Scooty Pep
MTV, Bindass & V Hinglish
Do the Dew
Pepsi
Karbonn
Hike


Also a sizable absolute no. of greying
population
Leisure class
Health and insurance products
Pharma
Travel industry

The Marketing Environment
The Marketing Environment
Technological Developments

New manufacturing process
New ingredients
New distribution
New advertising medium
New eCommerce strategies
Impact of
Technological Change
Launches entirely new industries, such as
multimedia, digital communications and electronic
commerce.mobile banking, Papa Jones Pizza
Alters or virtually destroys existing industries, such
as the effect of e-mail on regular mail and even
fax...Archies
Stimulates other markets and industries, such as
the effect of the credit card and Internet shopping
on the retailing industry
Natural Environment
Shortage of raw materials
Increased energy costs
Anti-pollution pressures
Governmental protectionsMr. J Ramesh
Coke in Kerala
Euro II norms

Japan
El-Nino
SARSchicken @ 10
Toyota
Greenest global brand
Prius
Gas and electric engines

Andthe Reva
Electric car (2001)
80-20 JV
10 patents
90% indigenous ingredients
Thomas Elva Edison award in 2003 for innovation in
technology
European Economic Community certificate
Homologation
Export to 17 countries
Priced at $ 5500
Cheap to drive (50 p/km)
Low maintenance



Competition
Look at the Indian Industries:
Automobile/Telecom/Retail/Financial
Services/Pharma/Personal
Care/Airlines/Foodeven Politics!

Competition
Lets do an exercise..

Read the links..
http://articles.economictimes.indiatimes.com/2012-10-
05/news/34279526_1_toothpaste-market-colgate-
palmolive-india-market-share
http://articles.economictimes.indiatimes.com/2012-11-
07/news/34970830_1_toothpaste-market-oral-care-
sensitive-toothpaste
http://www.business-
standard.com/india/news/pepsodent-fights-on/396472/
http://www.business-standard.com/article/companies/p-
g-to-price-oral-b-toothpaste-at-10-15-premium-to-rivals-
113070100894_1.html
http://marketingcrow.wordpress.com/2013/02/18/colgate
-pepsodent-parodontax-and-becoming-small-by-
becoming-big/
http://paper.hindustantimes.com/epaper/viewer.aspx

Brand Team Colgate, Pepsodent, Sensodyne, Oral B
Competitive Strategy H2 FY 2013-14

Competitive Forces
Types of Competition
Competition Other organizations that market products
that are similar to a marketers products in
same geographic area..MUL & Honda
Generic
competitors
Firms that provide very different products
that solve the same problem or satisfy the
same basic customer need..Skype, Deccan,
Volvo, LinkedIn
Total budget
competitors
Firms that compete for the limited financial
resources of the same
customersstationary and cutlery
Different competitive structures
Monopoly no competition, few substitutes,
high barriers to entry..railways
Oligopoly few competitors, reasonable
barriers, differentiated products..airlines
Pure competition many competitors, low
barriers, low differentiationFMCG, personal
care
Barriers to Entry and Exit
Government Policy
Licencing Regime
Labour Laws
Initial Cost
Strong Brands presence
Customer service
Technology


Obtaining Information on Competitors
Competitors Website
Strategic vision
Values and culture
Portfolio of businesses clue to priorities and strategies
Assets such as plants, global access, brand symbols
Search Engines for articles and financials
Databases
Directories
People Poaching
Intermediaries
Government Reports
Trade associations, magazines, and meetings
Technical meetings and Journals
Marketing Research

Industry Analysis:
Forces Influencing Competition
Industrygroup of firms that produce
products that are competitors/close
substitutes for one another
Five forces influence competition in an
industry described by Michael Porter
Competitive Rivalry
Entry is likely
Commodity products or equally strong brands
Competitors are in balance
There is slow market growth
Global customers increase competition
There are high fixed costs in an industry
Markets are undifferentiated
There may be high exit barriers
Indian Auto Industry
Buyer power
Buyers = manufacturers and retailers, not consumers
Buyers seek to pay the lowest possible price
Buyers have leverage over suppliers when
They purchase in large quantities (enhances supplier
dependence on buyer)
Suppliers products are commodities
There are many small operators in the supplying industry
There are alternative sources of supply
Components or materials are a high percentage of cost to the
buyer leading to shopping around
Switching costs are low
There is a threat of backward integration
Organized retail

We do not quibble or argue with anyones right
to sing what they want, to print what they
want, and say what they want. But we reserve
the right to sell what we want.

Wal-Marts response to the accusation that it is
using its financial power to dictate what is
appropriate music and art
Supplier power
When suppliers have leverage, they can raise prices high
enough to affect the profitability of their customers

Leverage accrues when
There is a concentration of suppliers
Switching costs are high
The supplier brand is powerful
Critical Inputs
Few substitutes
Integration forward by the supplier is possible
Customers are fragmented and bargaining power low

OPEC

Threat of substitutes
Availability of substitute products places limits on the prices
market leaders can charge
High prices induce buyers to switch to the substitute

Substitutes take different forms:
Substitution of need
Generic substitution - mobiles for land based telephones
Doing without - no communication

Volvo, Skype
The threat of entry
New entrants mean downward pressure on prices and reduced
profitability

Dependent on barriers to entry such as following, being low:
Capital requirements of entry
Level of Innovation & tech
Access to distribution channels
Cost advantages
Expected retaliation competitor response
Legislation or government action

Airlines, Financial Services
Competitive Advantage
Achieved when there is a match between a
firms distinctive competencies and the factors
critical for success within its industry
Two ways to achieve competitive advantage
Low-cost strategy
Product differentiation
Generic Strategies for Creating Competitive
Advantage
Broad market strategies
Cost leadershiplow price
Product differentiationpremium price
Narrow market strategies
Cost focuslow price
Focused differentiationpremium price
Cost Leadership
Based on a firms position as the industrys low-cost
producer
Must construct the most efficient facilities
Must obtain the largest market share so that its per
unit cost is the lowest in the industry
Works only if barriers exist that prevent competitors
from achieving the same low costs
Japanese Electronics, Amul, Aravind Eye

Product Differentiation
Product that has an actual or perceived
uniqueness in a broad market has a
differentiation advantage
Extremely effective for defending market
position
Extremely effective for obtaining above-
average financial returns; unique products
command a premium price
Caterpillar construction equipment
Cost Focus
Firms lower cost position enables it to offer a
narrow target market and lower prices than
the competition Deccan/Jet Lite
Sustainability is the central issue for this
strategy
Works if competitors define their target market
more broadly
Works if competitors cannot define the segment
even more narrowly

Focused Differentiation
The product has actual uniqueness but it also
has a very narrow target market
Results from a better understanding of
customers wants and desires
Ex: High-end audio equipment

Competitive Advantage???
Axe
First mover advantage
Strong company backing
High ad recall
Industry growing at 18% p.a., Axe MS 25%
Then came Fogg
Differentiation no gas
No.1 today (13%)
Park Avenue & Engage also catching upJoint No.2 (8%)
Axe has slipped to No.3 (7%)
Wildstone no.4

Competitive Advantage???
Mercedes India
Earliest entrant in luxury segment in India
Nearly 100% market share
Admired brands, good variants
Enter Audi and BMW
Both companies realized focus on younger audience,
and SUV segment
Today, Audi MS 33%, BMW and Merc 25% each
Lower price cars sales stagnant in India since a year,
luxury segment growing at 15% p.a.

Competitive advantage is nearly always
relative, not absolute

Cant go on forever

Toyota, Bailey, Kodak, Nokia, Dell, LG, M&M
Scorpio, Blackberry, All Out, Anchor
Toothpaste..
Creating Sustainable Competitive
Advantage
Sustainable Competitive Advantage
SCA is an element (or combination of elements) of the
business strategy that provides a meaningful
advantage over both existing and future competitors.
An SCA needs to be meaningful, sustainable and
substantial.
An SCA needs to be supported and enhanced over
time.
The assets and competencies of an organization
represent the most sustainable element of a business
strategy, because these are usually difficult to copy or
counter.
Creating sustainable Competitive
Advantage via Strategic Intent
Building layers of advantage
Searching for loose bricks
Changing the rules of engagement
Collaborating
Building Layers of Advantage
A company faces less risk if it has a wide
portfolio of advantages
Successful companies build portfolios by
establishing layers of advantage on top of one
another
Illustrates how a company can move along the
value chain to strengthen competitive
advantage
Japanese TV industry: 1970slargest producer of black-and-white sets
and becoming world leading in color sets; competitive advantage = low
labor costs

Next, they built factories large enough to serve the world market; sold
under many brand names; added layers of competitive advantage of
quality and reliability

Next, they invested in marketing channels and Japanese brand-name
recognition; new layer of competitive advantage of global brand franchise

Led to the introduction of new products such as VCRs and photocopiers
and to the establishment of regional manufacturing to adapt products to
local market needs

Searching for Loose Bricks
Search for opportunities in the defensive walls
of competitors whose attention is narrowly
focused
Focused on a market segment
Focused on a geographic area to the exclusion of
others

Acer in Middle East, Southeast Asia, Latin America
Honda v Harley Davidson in US
Changing the Rules of Engagement
Refuse to play by the rules set by industry
leaders
Ex: Xerox and Canon
Xerox employed a huge direct sales force; Canon
chose to use product dealers
Xerox built a wide range of copiers; Canon
standardized machines and components
Xerox leased machines; Canon sold machines
Collaborating
Use the know-how developed by other
companies
Licensing agreements, joint ventures, or
partnerships
Competitor Types
Leader
Challenger
Follower
Nicher
Strategy for market leader
Expand market more usage (replacement
indicator battery, toothbrush), new
customers
Protect and increase its market share
Create barriers to entry cost, distribution,
goodwill, service, opinion leaders
Financial muscle - advertising
Innovation

Strategy of Challenger
Attack frontal challenge (Vodafone, P&G)
Flanking blind side, weak areas (geography
or segments) Docomo, LG Sampoorna,
Woodland, baileys
Guerrilla warfare advertising, flash mobs,
ambush marketing.nothing official about it!!






Strategy for Follower
Laid back
No challenge
Ability to replicate quickly speed to market
Low cost ability (with lower quality)

Strategy for Nicher
Smaller companies
Or with extremely focused expertise
Finding ignored segments (Anchor, Wagh Bakri,
Monte Carlo, Dolby, Blackberry)
Needs indepth knowledge of segment
Low volume, higher margins
Customization
Risk limited market (Zippo, I Ball)challenge of
diversification
What is CRM?
All about retaining customers
But not all customers.
Retaining customers = more sales, more
profits AND less costs
Customer value can be measured
CRM is system driven
Customer Retention
Acquisition of customers can cost 5 times more than
retaining current customers.
The average company loses 10% of its customers
each year.
A 5% reduction to the customer defection rate can
increase profits by 25% to 85%.
The customer profit rate increases over the life of a
retained customer.
Customer Profitability-Focused Marketing -
CRM
Tracks costs and revenues of individual
consumers
Categorizes them into tiers based on
consumption behavior
A customer pyramid groups customers into
four tiers
Customer Profitability-Focused
Marketing
Tier 1: Platinum
Tier 2: Gold
Tier 3: Iron
Tier 4: Lead
A Portrayal of the Characteristics of
Relationship Marketing
Products/Services
Individualized attention
Continuous information
Price offers
Customer services
Extras and perks, etc.
Repeat Purchase
Increased Loyalty
Goodwill
Positive word-of-mouth
Lower costs for the firm
Trust and
promises
The Firm provides The Customer provides
Objectives of CRM
Customer Retention - retain loyal and profitable
customers and channels
Customer Acquisition - acquire customer based on
known characteristics which drive growth and
increase margins
Customer Profitability - increase individual customer
margins by offering the right product at the right
time

Advantages of CRM
Reduces advertising costs
Increases awareness of customer needs
Tracks the effectiveness of promotional campaigns
Allows competition for customers based on service,
not prices
Prevents overspending on low-value clients and
under spending on high-value ones
Speeds the time it takes to develop and market a
product
Improves use of the customer channel
Segmentation, Targeting & Positioning
Once upon a time

There was Ambi & Fiat
And the Lambretta
Nowcustomer spoilt for choice
Economy, mid-size and luxury cars
In order to fight competition
The story of Surf and Nirma
Nirma : national brand after 1982, colour TVs
Low price, branded detergent
Upper class also used for inexpensive clothes
Surf lost
1984 fresh approach
Study on colour associations with cleaning
Yellow lower class, Blue middle class, white
upper class, also green
Sunlight, Wheel (green), Rin, Surf Ultra
What is a Market Segment?
A market segment consists of a group of
customers who share a similar set of
needs and wants.
Market Segmentation
Represents an effort to identify and categorize
groups of customers and/or countries
according to common characteristics

Market Segmentation
Mass
Market
Niche
Micro-
marketing
The
Individual
Personal-
ization
Micro-
marketing
Niche
Standardized
Marketing
Mix
Targeting
The process of evaluating segments and
focusing marketing efforts on a country,
region, or group of people that has significant
potential to respond
Focus on the segments that can be reached
most effectively, efficiently, and profitably

Positioning
Positioning is required to differentiate the
product or brand in the minds of the target
market.
Global Market Segmentation
Geographic
Demographics
Psychographics
Behavioral characteristics
Benefits sought
Geographic Segments
Can segment on basis of country but usually different
segments exist with countries as well
Intermarket segments Small car in EU v US
Intramarket segments Whirlpool washing machines in Italy v
Germany
Sweaters & Coolers
Coffee in South India
MDH masalas
Demographic Segmentation
Income
Population
Age distribution
Gender
Education
Occupation

What are the trends?
Demographic Facts and Trends
A widening age gap exists between the older populations in
the West and the large working-age populations in developing
countries - Singapore
In the European Union, the number of consumers ages 16 and
under is rapidly approaching the number of consumers ages
60-plus
Asia is home to 500 million consumers ages 16 and under
Half of Japans population will be age 60 or older by 2025

Demographic Facts and Trends
By 2030, 20 percent of the U.S. population70 million
Americanswill be 65 or older versus 13 percent (36
million) today
India has the youngest demographic profile among the
worlds large nations: more than half its population is
under the age of 25

Segmenting by Income and Population
Income is a valuable segmentation variable
Bhutta!
Do not read into the numbers
Some services are free in developing nations so there is
more purchasing power
Income information is an average disparities prevail
For products whose price is low enough, size of
population is a more important variable
Marketing to the Bottom of the
Pyramid
Grameen Bank
The $100 laptop
The Nano
The Re 1000 water purifier
Deccan identifying price sensitive customers
segment
Aravind Eye Care
Philips Hand Radio


India Income Segmentation (NCAER)
Rich fastest growing
Consuming FMCG & durables consumers,
cost benefit seekers
Climbers new jobs
Aspirants auto walla
Destitute


Age Segmentation
Global teensyoung people between the ages of 12
and 19
A group of teenagers randomly chosen from different parts
of the world will share many of the same tastes
Pepsi
Global eliteaffluent consumers who are well
traveled and have the money to spend on prestigious
products with an image of exclusivity
Carrefour DINKs
Aastha, Cartoon Network
CSR Magazine
Johnson & Johnson
Gender Segmentation
In focusing on the
needs and wants of one
gender, do not miss
opportunities to serve
the other
Companies may offer
product lines for both
genders
Nike, Levi Strauss
Wills Lifestyle, Lee
Madura Garments
Femina
Madame
Fair and Handsome
Psychographic Segmentation
Grouping people according to attitudes, values, and
lifestyles
SRI International and VALS 2

MTV India Psychographic Segmentation
Homebodies - traditional
Two faced
Wannabes largest number, show offs
Rebels 2
nd
largest segment
Cool guys influencers

Psychographic Segmentation
The Euroconsumer
Successful idealistcomprises from 5 to 20% of the
population, consists of persons who have achieved
professional and material success while maintaining
commitment to abstract or socially responsible ideals
Affluent materialistabout 30%, status-conscious
up-and-comers, many of whom are business
professionals, use conspicuous consumption to
communicate their success to others
Psychographic Segmentation
The Euroconsumer
Comfortable belongers
25 to 50% of a countrys
population
Conservative
Most comfortable with
the familiar
Content with the comfort
of home, family, friends,
and community
Disaffected survivors
Lack power and affluence
Harbor little hope for
upward mobility
Tend to be either
resentful or resigned
Concentrated in high-
crime urban inner city
Attitudes tend to affect
the rest of society

Psychographic Segmentation:
Sonys U.S. Consumer Segments
Lifestyle Segmentation
Kitchens of India, Ashirwaad


Behavior Segmentation
Focus on whether people purchase a product, as well as how
much and how often they use it
User status
Kellogs
China smoking
Bottled water Nestle
ATMs - Japan
Behavioral Segmentation
Behavioral Variables
OccasionsArchies, Cadburys
Benefits
User Status
Usage Rate
Benefit Segmentation
Benefit segmentation focuses on the value
equation
Value = Benefits / Price
Based on understanding the problem a
product solves, the benefit it offers, or the
issue it addresses
Toothpastes, Energy drinks
Effective Targeting Requires
Identify and profile distinct groups of buyers
who differ in their needs and preferences
Select one or more market segments to enter
Establish and communicate the distinctive
benefits of the market offering
Assessing Market Potential
Three basic criteria
Current size of the segment and anticipated
growth potential
Competition
Compatibility with companys overall objectives
and the feasibility of successfully reaching the
target audience

Current Segment Size and Growth
Is the market segment currently large enough
to present a company with the opportunity to
make a profit?
If the answer is no, does it have significant
growth potential to make it attractive in terms
of a companys long-term strategy?
Indian mobile market growth
Potential Competition
Is there strong competition in the market
segment currently?
Is the competition vulnerable in terms of price
or quality?
Japanese autos in US
Feasibility and Compatibility
Will adaptation be required? If so, is this
economically justifiable in terms of
expected sales?
Will import restrictions, high tariffs, or a
strong home-country currency drive up the
price of the product in the target market
currency and effectively dampen demand?
- China
Feasibility and Compatibility
Is it advisable to source locally? Would it make
sense to source products in the country for
export elsewhere in the region?
Is targeting a particular segment compatible
with the companys goals, brand image, or
established sources of competitive advantage?
Honda Jazz

Target Market Strategy Options
Standardized marketing
Mass marketing on a global scale
Undifferentiated target marketing
Standardized marketing mix
Minimal product adaptation
Intensive distribution
Ford : Any colour as long as its black! (Model T)
Usually niche luxury brands
Target Market Strategy Options
Concentrated marketing
Niche marketing
Single segment of
market
Ex: Chanel, Body Shop
Godrej Ezee detergent
woolens
Paras Pharma Crack cream
womens heels
Aastha channel
Meswak, Vicco herbal
toothpaste
Red Bus, Red Bull, Dolby
Differentiated
marketing
Multi-segment
targeting
Two or more distinct
markets
Wider market
coverage
Ex: P&G markets Old Spice
and Hugo Boss for Men
HUL - Axe & CK
MUL

Niche Marketing @ Revolution
Clothing
Plus sizes
Began 2001, today 27 outlets with sales of 10
Cr/month
Targeting a Local Market
Kerela Banks with NRI services
Discovery 7 languages
HSBC The worlds local banks UAE
experience
STAR - Adsharp

Positioning
Locating a brand in consumers minds over and
against competitors in terms of attributes and
benefits that the brand does and does not offer
Attribute or benefit Visa, Clinic Plus
Quality and price Audi, Deccan
Use or user Dettol Soap, Oral B
Competition DOCOMO
Service Dominos
Gender Hero Honda Pleasure, Pulsar
Positioning Strategies
Global consumer culture positioning
Identifies the brand as a symbol of a particular
global culture or segment - UCB
High-touch and high-tech products Nescafe
Foreign consumer culture positioning
Associates the brands users, use occasions, or
product origins with a foreign country or culture
Fosters, Budwieser