market segmentation

YOGESH CHOUDHARY MT11IND013

Market Segmentation, Targeting & Positioning

Steps in Market Segmentation, Targeting,

and Positioning

• Market segmentation is the process of dividing the

total market into relatively distinct homogeneous sub-

groups of consumers with similar needs or

characteristics that lead them to respond in similar ways

to a particular marketing programme.

• A market segment is a portion of a larger market in

which the individuals, groups, or organisations share one

or more characteristics that cause them to have relatively

similar product needs.

LEVELS OF MARKET SEGMENTATION

SEGMENT MARKETING

LOCAL MARKETING

NICHES MARKETING

INDIVIDUALS MARKETING

SEGMENT 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 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

NICHE MARKETING Group of customers seeking a distinctive mix of benefits

who are ready to pay extra premium.

Eg. Washing detergents 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

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.

INDIVISUAL MARKETING• 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.

Requirements for Effective Segmentation

Five conditions must exist for segmentation to be meaningful:1. A marketer must determine whether the market is heterogeneous. If the

consumers’ product needs are homogeneous, then it is senseless to segment the market.

2. There must be some logical basis to identify and divide the population into relatively distinct homogeneous groups, having common needs or characteristics and which will respond to a marketing programme. Differences in one market segment should be small compared to differences across various segments.

3. The total market should be divided in such a manner that comparison of estimated sales potential, costs, and profits of each segment can be done.

4. One or more segments must have enough profit potential that would justify developing and maintaining a marketing programme.

5. It must be possible to reach the target segment effectively. For instance, in some rural areas in India, there are no media that can be used to reach the targeted groups. It is also possible that paucity of funds prohibits the development required for a promotional campaign.

How Segmentation Helps

• Segmentation studies are used to uncover needs and wants of specific groups of consumers for whom the marketer develops especially suitable products and services to satisfy their needs.

Bases for Segmentation

• A segmentation variable is a characteristic of individuals, groups or

organisations that marketers use to divide and create segments of the

total market.

• Segmentation descriptors fall under four major categories and include

geographic variables, demographic variables, psychographic

variables, and behaviouristic variables.

Geographic variables focus on where the customers are located.

Demographic variables identify who the target customers are.

Psychographic variables refer to lifestyle and values.

Behaviouristic variables identify benefits customers seek, and

product usage rates.

Behavioral SegmentationBehavioral Segmentation

PsychographicPsychographic

DemographicDemographic

GeographicGeographic

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.

DEMOGRAPHIC SEGMENTATION

DEMOGRAPHIC SEGMENTATION• As people age their needs and wants change, some organisations

develop specific products aimed at particular age groups for example  nappies for babies, toys for children, clothes for teenagers and so on.   

• Gender segmentation is commonly used within the cosmetics, clothing and magazine industry.

• In the UK we have also seen the introduction of Maxim, (www.maxim-magazine.co.uk)  a male lifestyle magazine covering male fashion, films, cars, sports and technology. \

Psychographic SegmentationPsychographic segmentation divides a market into different groups based on social class, lifestyle, or personality characteristics.

Behavioral Segmentation Occasion

Special promotions & labels for holidays.

Special products for special occasions.

Benefits Sought Different segments

desire different benefits from the same products.

Loyalty Status Nonusers, ex-users,

potential users, first-time users, regular users.

Usage Rate Light, medium,

heavy.

Targeting is a decision• Market Targeting is a process of

allocation of company effort and

resources towards a certain

market segment.• Targeting is a match between the

company’s products and services

and the inherent NEEDS AND

WANTS characteristics of the

target segment• WRONG TARGET…. LOW PROBABILITY OF

SUCCESS….

Types of target market• Multiple segments

– Especially if the needs are homogenous

• Single segment• Primary target market (PTM)

– Main focal point of all marketing programs

• Secondary target market (STM)– Used only as a consideration for marketing programs

Identify the Appropriate Targeting Strategy

• Undifferentiated Strategy

Differentiated

Concentrated

Undifferentiated Strategy

Single Marketing

Mix

Differentiated Strategy

Marketing Mix 2

Marketing Mix 1

Organization

Target Market

CannibalizatioN

• Cannibalization• Cannibalization

Situation that occurs when

sales of a new product cut into

sales of a firm’s existing

products.

What is Positioning?

• Creating a distinct and relevant differentiation between the brand and it’s competitors

• Key words– Distinct – being different– Relevant – difference being important

Why is Positioning important?

• Create a distinction between our brand and its competitors

• Reason for buying• Serves as a guide for marketing mix execution

Positioning of Procter & Gamble Detergents

• LO9 0.7%Fabric & skin safety on baby clothesIvory Snow

0.1%Tough cleaner, aimed at Hispanic marketAriel

1.0%Outstanding cleaning for baby clothes, safeDreft

1.2%Detergent and fabric softener in liquid formSolo

1.4%Bleach-boosted formula, whiteningOxydol

1.8%Value brandDash

2.2%Stain treatment and stain removalEra

2.6%Sunshine scent and odor-removing formulaGain

2.9%Detergent plus fabric softenerBold

8.2%Tough cleaning, color protectionCheer

31.1%Tough, powerful cleaningTide

MarketShare

PositioningBrand

THANK YOU