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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

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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 SEGMENTATIONFor 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 –

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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. 4.

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