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INDUSTRIAL MARKET
SEGMENTATION, TARGET
MARKETING AND POSITIONING
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MARKET SEGMENTATIONIt is the process of dividing the total
market for a product into several
segment of distinct homogeneous
group of buyers.
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STP FRAMEWORK STP FRAMEWORK
Market segment
1.Carry out
market research
2.Identifysegmentation
variables
3.Prepare
profiles of the
resultingsegments.
TARGET
MARKETING
1.Evaluate the
resulting segment
2.Select the target
segments
3.Decide target
market strategy
POSITIONING
1.Identify target
customers
attributes for differentiation
2.Select the right
attributes or
benefits
3.Communicate
the chosen
position to each
target market
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3. Profiling:- each buyer group is profiled by its
specific characteristic like:-
a. Use of product
b. volume of requirementc. location
d. type of industry
e. purchasing policies etc.
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BBENEFITS AND LIMITATION OF
MARKET SEGMENTATIONMARKET SEGMENTATION
Benefitsy Help to compare marking opportunity of
different market segment
y helpful in planning of different market
segments
y Effective budgeted allocation of resources
Limitation
y INCREASE IN MARKETING EXPENSESy DIFFICULTY IN SEGMENTING
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CRITERIAUSED FOR SELECTION OF
SEGMENTATION VARIABLE
measurable
differentiable
substantial
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VARIABLE USED FOR SEGMENTING
INDUSTRIAL MARKETS:-
Micro variables Macro variables
1.Type of industry
2. Company size
3. Customer location4. End use
1. Customer interaction
2. organisational
capability3. purchasing policies
4. purchasing criteria
5. personal
characteristics
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EALUATING MARKETEALUATING MARKET
SEGMENTSSEGMENTS
Evaluation of different segments is done by
following four factors:-
1.
Size and growth
2. Profitability analysis
3. Competitive analysis
4. Company objective and resources
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TARGET MARKET STRATEGY
1. CONCENTRATED MARKETING
2. DIFFERENTIATED MARKETING
3. UNDIFFERENTIATED MARKETING
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CONCENTRATED MARKETING
y Focusing all efforts on single or few
segments
y n arrow range of product & service
y high price, high quality, high promotional
distribution strategy
y Done by companies having limited
resources.
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DIFFERENTIATED MARKETING
y aim to target several segments whose
needs, product usage is different
y develop separate market strategy for
each segment
y increase overall cost
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UNDIFFERENTIATED
MARKETINGy lack of effective market segment
y develop a single plan for all market
y standardized products
y Main advantage is that it keeps total cost
low.
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NICHE MARKETING
Industrial marketers who would like to follow
niche marketing approach should understand
the following:-
y customers have a different set of needsy customers are willing to pay a higher price to
company which best satisfies their special needs
y Difficulty for competitors to gain by attacking
the co. which is a niche leader
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y Key idea in niche marketing is of
specialization which can be achieved in
several ways :-
Geographical specialization
End user specialization
Customer-size specialization
Product-line specialization
customer specialization
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POSITIONING
Positioning is how the firm want its
products to be perceived by the target
customers on important benefits. For e.g.
L&T, Infosys
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PROCEDURE FOR DEVELOPING A
POSITIONING STRATEGY
1. Identify major attributes for
differentiation
2. product variables
3. service variables
4. Personnel variable
5. Image variables
6. selecting the differentiating attributes
7. communicating the co.·s positioning