MARKET SEGMENTATION

Mahajan Samant

MARKET SEGMENTATION
BASIC IDEAS ( for M.S) 1. Selection of target market. 2. Effective Marketing programs.

RATIONALE
WHAT NEEDS AND WHOSE NEEDS PRINCIPLE OF DISTINCTIVE COMPETENCE Homogeneous --------------------------------------------------------------SuoenegoreteH

Targeting Options
1. Undifferentiated Mktg.ONE PRODUCT 2. Concentrated Mktg.. PARTICULAR MARKET SEGMENT 3. Differentiated Mktg..DIFFRENT

PRODUCT FOR DIFFERENT M.S

MARKET SEGEMENTATION (DEFN.)

Process of identifying group of buyers with different buying desires or requirements.

MARKET TARGETING (Defn.) Decision Which M.S to serve

ENTERING A MARKET? FIVE STEPS

1. Determine those attribute along which to identify the possible existence of distinct M.C. 2. Determine size & value of diff / vari. M.S 3. Determine how existing brands are positioned. 4. Look for opportunities in M.ss not / inadequately being served. 5. Determine co-related characteristics of attractive M.S.

REQUIREMENTS FOR EFFECTIVE MARKET SEGMENTATION

1. Measurability

2. Accessibility
3. Substantiality

BENEFITS OF SEGMENTATION
1. For guiding Marketing Strategy. 2. Better position to spot & compare mktg. opportunities. 3. Finer adjustments of products & mktg. appeals possible. 4. Mktg. programs & budgets based on clearer ideas of the response characteristics of specific M.Ss

BASES FOR SEGMENTATION

1. GEOGRAPHIC 2. DEMOGRAPHIC 3. PSYCHOGRAPHIC

MARKET TARGETING

I. UNDIFFERENTIATED MARKETING
Focus : What is common (not What is different) Appeal : Broadest number of buyers. Rely on : Mass channels/ advts./ universal themes. (Coke) Endow product, superior image in prosps MIND {Cost Economics, Mass Production} Low M.R. COST(?) Later, Less profitable segment (!)

II. DIFFERENTIATED MARKETING

Focus : Two or more segments & separate product. Appeal : Customers Desires Rely On : Creating more total sales, Concern about increasing cost, optimality of strategy. Later, over differentiation reverse(!) CGL MEMO

III. CONCENTRATED MARKETING

Focus : Large share in one or a few sub-market. Appeal : Customers Delight (Good MKT Position) Rely on : Greater Knowledge, Special Reputation. Enjoy operating economics (due) specialization Earns high rates of ROI. Later, higher than normal risk.

FIVE FACTORS FOR ACTUAL CHOICE

1. Company resources 2. Product homogeneity 3. Product stage in life cycle 4. Market homogeneity

5. Competitive MKTG. STRATEGIES

MAJOR SEGMENTATION VARIABLES

I. GEOGRAPHIC
1. Region 2. City or Metro

3. Density
4. Climate

II. DEMOGRAPHIC
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Age Family size Family life cycle Gender Income Occupation Education Religion Race Generation Nationality Social class

III. PSYCHOGRAPHIC
1. Life style 2. Personality

IV. BEHAVIORAL
1. 2. 3. 4. 5. 6. 7. Occasion Benefits User status Usage rate Loyalty status Readiness stage Attitude towards product

Levels of market segmentation

Starting point Mass Marketing Example: Ford T car Coke 6.5 Ounce Bottle ! MANY CRITICS HENCE , MICRO MARKETING

MICRO MARKETING
SEGMENTS NICHES LOCAL INDIVIDUALS

MARKET SEGMENT.. Consists of group of customers who share a similar set of wants.

NICHE.. is a more narrowly defined group seeking a distinctive mix of benefits

Customers willing to pay a PREMIUM. Niche unlikely to attract competitors. Niche gets certain economics through specialization Profit size & growth potential. e.g. Estee lauder, Hallmark

LOCAL. Target Marketing is leading to mktg. programs tailored to the needs & wants of local customer groups, areas, neighborhoods. e.g. Citibank's different services to its branches.

INDIVIDUAL.. Customized.. One to one marketing! Leading to mass customization, On-line CHOICEBOARD!

ADVERTISING
1. 2. 3. Any paid form of non-personal presentation of ideas, goods or services by an identified sponsor. Kotler. Contribution to brand image. .David Ogilvy Intervener in all aspects of economic & cultural life. . Pope VI Paid, non-personal communications through various media by business firms, non profit organizations & individuals who are in some way identified in the advertising message & who hope to inform or persuade members of a particular audience. Nourishes consuming power. ..Sir W. Churchill.

4.

5.

POSITIONING
BATTLE FOR YOUR MIND.
AL RIES

&
JACK TROUT

New approach to communication POSITIONING to overcome universal reason given for problems that develop failure to communicate. Positioning starts with a product, a piece of merchandise, a service, a company, an institution or even a person. Perhaps yourself. P is what you do to the mind of the prospect i.e. position your product in mind of the prospect 6 INCHES OF GREY MATTER = MIND = BATTLEGROUND

VARIOUS ERAS
1. PRODUCT ERA Fifties in USA & Seventies in India. Attention on product feature. Attention on customer benefits Unique selling proposition Rosser Reeves Decline due technology + me too products new & improved jokes

2. IMAGE ERA
Architect David Ogilvy Every advertisement is a long term investment in the image of a brand. Me too companies kill image era. E.g. Rolls Royce, Marlboro Xerox exceptions due to technical achievement.

3. POSITIONING ERA
IBM. Invented the computer? first company to build a computer position Sperry Rand

Amerigo Vespucci..who discovered USA? {15th Century} Separate Continent Not Asia Wrote!! Christopher Columbus