Transcript
Unit-2Unit-2
Market Segmentation
The STP ProcessThe STP Process
• Segmentation is the process of classifying customers
into groups which share some common characteristic
• Targeting involves the process of evaluating each
segments attractiveness and selecting one or more
segments to enter
• Positioning is arranging for a product to occupy a
clear, distinctive and desirable place relative to
competing products in the mind of the consumer
Steps in Target MarketingSteps in Target Marketing
1. Identify Basesfor Segmenting the Market
2. Develop Profilesof Resulting Segments
3. Develop Selection Criteria
4. Select TargetSegment(s)
5. Develop Positioningfor Each Target Segment
6. Develop MarketingMix for Each Target Segment Market
Positioning
MarketTargeting
Market Segmentation
Target MarketTarget Market
• A market is a set of all actual and potential buyers
• A target market is a group of people toward whom a
firm markets its goods, services, or ideas with a
strategy designed to satisfy their specific needs and
preferences.
• Any marketing strategy must include a detailed
(specific) description of this.
What is a Market Segment?What is a Market Segment?
According to Philip Kotler and Armstrong , “Market segment is a group of consumers who respond in a similar way to a given set of marketing stimuli”
What is a Market Segmentation?What is a Market Segmentation?
According to Philip Kotler , “ Market segmentation is the process of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviour who might require separate products or marketing mix.”
Market Segmentation Conti..Market Segmentation Conti..
Market Segmentation is a method of “dividing a market (Large) into smaller groupings of consumers or organizations in which each segment has a common characteristic such as needs or behavior.”
Requirements for Effective SegmentationRequirements for Effective Segmentation
• Size, purchasing power, profiles of segments can be measured.
• Segments can be effectively reached and served.
• Segments are large or profitable enough to serve.
Measurable Measurable
AccessibleAccessible
SubstantialSubstantial
DifferentialDifferential
ActionableActionable
• Segments must respond differently to different marketing mix elements & programs.
• Effective programs can be designed to attract and serve the segments.
Levels of SegmentationLevels of Segmentation
1. Mass Marketing or Undifferentiated Marketing
2. Micro Marketing: Micro-Marketing is the practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer groups. As it is difficult for many companies to bear the high advertising cost to reach mass media, they use micro marketing.
– It consists of:
–Segment Marketing or Differentiated marketing.
–Niche Marketing or Concentrated Marketing.
–Local Marketing.
– Individual Customer Marketing
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing Mix 1
CompanyMarketing Mix 1
CompanyMarketing Mix 2
CompanyMarketing Mix 2
CompanyMarketing Mix 3
CompanyMarketing Mix 3
MarketMarket
A. Undifferentiated or Mass Marketing
B. Differentiated Or Segmented Marketing
C. Concentrated Or Niche Marketing
Levels of Segmentation CONTI..Levels of Segmentation CONTI..
Henry Ford epitomized this strategy when he offered the Model- T Ford in one colour , black.-1- Undifferentiated Marketing
Henry Ford epitomized this strategy when he offered the Model- T Ford in one colour , black.-1- Undifferentiated Marketing
2. SEGMENTED MARKETING2. SEGMENTED MARKETING
Consists of a group of customers who share a similar set of needs and wants.
Identifiable Group with in a Market with Similar
•Wants• Purchasing Power• Geographical Location• Buying Attitudes
FLEXIBLE MARKET OFFERINGFLEXIBLE MARKET OFFERING
• Even in segments 100 % needs are not same – consists of two parts
1.Naked Solution :- products and services that all members of the segment values.
2.Discretionary options :- that some segment members value. Each option might carry an additional charge.
Example: Automobile industry – basic model is same but for A.C , power steering, power window buyer has to pay extra price.
SEGMENTED MARKETING CONTI..SEGMENTED MARKETING CONTI..
Delta Airlines offers all economy passengers a seat and soft drinks. It charges economy passengers extra for alcoholic beverages.
3. NICHE MARKETING CONTI.. 3. NICHE MARKETING CONTI..
Group of customers seeking a distinctive mix of benefits who are ready to pay extra premium.
Niche = segment sub – segments
Eg. Washing detergents hard & gentle washes . Surf excel for tough stains ( hard on clothes) & Ezee from Godrej for delicate clothes.
--- Astha , Sanskar , Q TV – focus on religion & spiritualism. DISTINCT NEEDSPAY PREMIUMSPECIALIZATIONLESS COMPETITIONPOTENTIAL
Gather.com: A Niche Social Networking SiteGather.com: A Niche Social Networking Site
4. LOCAL MARKETING4. LOCAL MARKETING
• Marketing programs tailored to the needs & wants of local customer groups in trading areas, neighborhoods , etc.
• this trend is called grass roots marketing.
Ex. – Spiderman 3 was released in 5 different language in India including Bhojpuri.
Pune sarees Kashmiri silk
Baskin Robbins Focuses on Local MarketingBaskin Robbins Focuses on Local Marketing
5. Individual Customer Marketing5. Individual Customer Marketing
• It refers to tailoring products and marketing programs to the needs and preferences of individual customers.
• The ultimate level of segmentation leads to:
–“Segments of one”.
–“Customized marketing”.
–“One to one marketing”.
INDIVIDUAL MARKETING Conti.. INDIVIDUAL MARKETING Conti..
• Ultimate segmentation – segments of 1 or customized marketing or one to one marketing.
• Customerization – empower the consumers to design the product or service offering of their choice.
• Ex. Paint companies have started doing this- Asian Paint , Nerolac , Berger Paints
• Arvind mills launched Ruff’n Tuff Jeans, branded ready – to – stitch
Bases for Segmenting Consumer MarketsBases for Segmenting Consumer Markets
GeographicGeographic
DemographicDemographic
PsychographicPsychographic
BehavioralBehavioral
1. GEOGRAPHIC SEGMENTATION1. GEOGRAPHIC SEGMENTATION
Divide the market into different group based on :• Region – South India , North , Western Region, East• City – metro cities, cities with population more than
1 million• World• Density• Climate• States
Ex.- Mcdonalds globally, sell burgers aimed at local markets, for example, burgers are made from lamb in India rather then beef because of religious issues. In Mexico more chilli sauce is added and so on.
2. Demographic Segmentation2. Demographic Segmentation
Age and Life CycleAge and Life Cycle
Life StageLife Stage
GenderGender
IncomeIncome
GenerationGeneration
Social ClassSocial Class
Age and Life CycleAge and Life Cycle
• For example, Hindustan Unilever Limited introduced pears soap in pink color, specially targeted towards children.
• For example, The magazine Magic Pot published by the Malayala Manorama Group in India is targeted at “nursery and primary school children”.
• For example, Television channels in India indicate segmentation based on age and life cycle.
Life StageLife Stage
• For example, Insurance companies offer schemes for people who are planning their retirement life.
• The Al Habib Bank of Pakistan targets senior citizens with special savings schemes that yield a higher interest rate.
GenderGender
• For example, ‘Virginia Slims’ is addressed to women and accompanied by appropriate flavor, packaging and advertising cues to reinforce a female image
• ‘Nike’ is viewed as more masculine than ‘Reebok’.
• For example, Emami launched a new fairness cream, fair and handsome, targeted exclusively at men, and in the process created a new product category.
• For example, Men prefer to drive motorcycles whereas for women there are specific brands of scooters for example Bajaj Wave and Scotty Pep.
IncomeIncome
• For example, ‘Blue-Collar Workers’ were among the first purchasers of color television sets, it was cheaper for them to buy these sets than to go to movies and restaurants.
• For example, Nirma washing powder was launched as the lowest priced detergent in India primarily targeted at the middle-income segment of the market.
GenerationGeneration
Social ClassSocial Class
3. Psychographic Segmentation3. Psychographic Segmentation
Divides Buyers Into Different Groups Based on:
4. Behavioral Segmentation4. Behavioral Segmentation
• Dividing the market into groups based on variables such as:
–Occasions
–Benefits
–User Status
–Usage Rate
–Buyer-Readiness
–Loyalty Status
–Attitude
OccasionsOccasions
• For example, “Orange Juice” is usually consumed at breakfast. But orange growers have promoted drinking juice as a cool and refreshing drink at other times of the day.
• For example, Biscuits are used as an accompaniment with tea or coffee in the evening.
BenefitsBenefits
• For example, Liril offers the benefits of “freshness” Dettol soap offers the benefits of “total protection”.
User StatusUser Status
• For example, Blood Banks cannot rely on regular donors to supply blood, they must also recruit new first-time donors and contract ex-donors and each will require a different marketing strategy.
Usage RateUsage Rate
• For example, Heavy beer drinkers accounts for 87% of the beer consumed-almost seven times as much as the light beer drinkers.
• For example, In the mobile phone service market, heavy users account for a significant proportion of the revenue earned by the service providers.
Loyalty StatusLoyalty Status
Switchers
Shifting loyals
Split loyals
Hard-core
Buyer-Readiness StageBuyer-Readiness Stage
AttitudeAttitude
• For, example, Door-to-Door workers in a political campaign us the voter’s attitude to determine how much time to spend with that voter.
• They thank enthusiastic voters and remind them to vote.
• They reinforce those who are positively disposed.
• They try to win the votes of indifferent voters.
• They spend no time trying to change the attitudes of negative and hostile voters.
Segmenting for Business MarketsSegmenting for Business Markets
DemographicDemographic
Operating VariableOperating Variable
Purchasing ApproachesPurchasing Approaches
Situational FactorsSituational Factors
PersonalCharacteristics
PersonalCharacteristics
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Process Of Market Segmentation Process Of Market Segmentation
Step 1. Identifying Customer Segments
Step 2. Developing Measures for Structural Attractiveness
Step 3. Selecting Customer Segments
Advantages of Segmentation Advantages of Segmentation
Facilitates Proper Choice of Target Market
Facilitates Tapping of the Market, Adapting the Offer to the Target
Helps “Divide the Markets and Conquer Them
Makes the Marketing efforts More Efficient and Economic
Advantages of Segmentation Conti.. Advantages of Segmentation Conti..
Helps Identify Less Satisfied Segments and Concentrate on Them
Benefits the Customer as Well Helps Distinction one Customer
Group from another within a Given Market
Helps Spot the less Satisfied Segments and Succeed by Satisfying such Segments
Limitations of Market SegmentationLimitations of Market Segmentation
• Market segmentation can be expensive proposition in both production and marketing of products.
• Other expenses like keeping adequate inventories of each style, colour, promotional expenses also go up because different promotional mixes have to the formulated for different elements.
• Administrative expenses also go up because marketer must plan an important several different marketing programmes.
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