6. SEGMENTATION
Is Subdividing Of Market Into Homogeneous Sub Set Of
Customers Where Any Subset May Be Selected As Marketing
Target
TARGETING
a well-defined set of customers whose needs the organization
plans to satisfy
POSITIONING
Is the act of designing the company's image to occupy a
distinctive place in the target market's mind
THE MOST IMPORTANT DEFINITIONS
How do we define it ?
7. 7- 7
Identify
bases for
segmenting
the market
Develop
segment
profile
Develop
measures of
segment
attractivenes
s
Select the
target
market
Develop
positioning
for target
segments
Develop a
marketing
mix for each
segment
8.
9.
10. There is a lot of
definitions to the
market
segmentation
Market segmentation involves the subdividing of a market into
distinct subgroups of customers, where any subgroup can be selected
as a target market
Market Segmentation is the marketing process of identifying and
breaking up the total market into groups of potential customers
with similar motivations, needs or characteristics, who are likely
to exhibit homogeneous purchase behaviour. Undertaking this
process allows marketing efforts to be targeted at select groups.
11. creaminess
sweetness
creaminess
sweetness
creaminess
sweetness
C - Clustered Preference
-natural segments
-increases as number of competitors increases
A - Homogeneous Preference
-no natural segments
-all buyers have same preference
B - Diffused Preference
-no pattern (…or poor research)
-take center position
12. Why market
segmentation
????
To develop marketing activities
Increase marketing effectiveness
Generate greater customer satisfaction
Create savings
To identify strategic opportunities and niches
Allocation of marketing budget
Adjustment of product to the market need
To estimate the level of sales in the market
To overcome competition effectively
To develop effective marketing programmes
To contribute towards achieving company goals
13. 7- 13
• Segmenting
Consumer Markets
• Segmenting
Business Markets
• Segmenting
International
Markets
• Requirements for
Effective
Segmentation
• Geographical
segmentation
– Marketing mixes are
customized
geographically
• Demographic
segmentation
• Psychographic
segmentation
• Behavioral
segmentation
• Using multiple
segmentation variables
Key Topics
Market Segmentation
17. 7- 17
• Segmenting
Consumer Markets
• Segmenting
Business Markets
• Segmenting
International
Markets
• Requirements for
Effective
Segmentation
• Geographic segments
• Demographic
segmentation
• Psychographic
segmentation
– Lifestyle, social class,
and personality-based
segmentation
• Behavioral
segmentation
• Using multiple
segmentation
variables
Key Topics
Market Segmentation
18. 7- 18
• Segmenting
Consumer Markets
• Segmenting
Business Markets
• Segmenting
International
Markets
• Requirements for
Effective
Segmentation
• Geographic segments
• Demographic
segmentation
• Psychographic
segmentation
• Behavioral segmentation
– Based on knowledge,
attitude, use or response
to a product
– Typically done first
• Using multiple
segmentation variables
Key Topics
Market Segmentation
19. 7- 19
Behavioral Segmentation Variables
• Occasions: According to
occasions buyer get the
idea to buy or use the
purchased item.
• Benefits sought:
According to different
benefits consumers seek
from the product.
• User Status: Nonusers,
ex-users, potential users,
first-time users & regular
users.
• User Rates: Light, medium
& heavy product users.
• Loyalty Status: Loyalty to
brands, stores & companies
can be a base. Consumers can
be somewhat loyal &
completely loyal
Market Segmentation
21. 7- 21
• Segmenting
Consumer Markets
• Segmenting
Business Markets
• Segmenting
International
Markets
• Requirements for
Effective
Segmentation
• Demographic segmentation
– Industry, company size,
location
• Operating variables
– Technology, usage status,
customer capabilities
• Purchasing approaches
• Situational factors
– Urgency, specific
application, size of order
• Personal characteristics
– Buyer-seller similarity,
attitudes toward risk,
loyalty
Key Topics
Market Segmentation
22. 7- 22
• Segmenting
Consumer Markets
• Segmenting
Business Markets
• Segmenting
International
Markets
• Requirements for
Effective
Segmentation
• Geographic segmentation
– Location or region
• Economic factors
– Population income or level
of economic development
• Political and legal factors
– Type / stability of
government, etc.
• Cultural factors
– Language, religion, values,
attitudes, customs,
behavioral patterns
Key Topics
Market Segmentation
23. 7- 23
• Segmenting
Consumer Markets
• Segmenting
Business Markets
• Segmenting
International
Markets
• Requirements for
Effective
Segmentation
• Measurable
– Size, purchasing power,
and profile of segment
• Accessible
– Can be reached and served
• Substantial
– Large and profitable
enough to serve
• Differentiable
– Respond differently
• Actionable
– Effective programs can be
developed
Key Topics
Market Segmentation
24. – Consists of a set of buyers who share
common needs or characteristics that
the company decides to serve.
– The process of evaluating segments and
focusing marketing efforts on a country,
region, or group of people that has
significant potential to respond
Target Market
25. Criteria for Targeting: 9 W’s
• Who buys our product?
• Who does not buy it?
• What need or function does it serve?
• What are customers buying to satisfy the
need for which our product is targeted?
• What price are they paying?
• When is the product purchased?
• Where is it purchased?
• Why is it purchased?
26. FACTORS CONSIDERED
IMPORTANT IN THE SELECTION
OF TARGET MARKET STRATEGY
• 1. Company’s Resources
• 2. Product Homogeneity
• 3. Product Stage in the Life Cycle
• 4. Market Homogeneity
• 5. Competitive Marketing Strategy
27. • Target Marketing Strategies
Five basic strategies for target market
selection:
• (1) Single Segment Targeting
• (2) Selective Targeting
• (3) Mass Market Targeting
• (4) Product Specialization
• (5) Market Specialization
29. Strategies of Target Marketing
• Undifferentiated (mass)
Marketing
• Differentiated
(segmented) Marketing
• Concentrated (niche)
Marketing
• Micromarketing (local
or individual
marketing)
• Ignoring market segments
differences & make one offer
to whole market
• Target several segments &
designs offer for each
• Group of customers seeking a
distinctive mix of benefits who
are ready to pay extra
premium
• Tailoring to the needs & wants
of the locals or individuals
Key Topics