MARKET SEGMENTATION

Market segmentation i s t h e p r o c e s s i n marketing o f   g r o u p i n g   a market (i.e. customers) into smaller subgroups. These markets are often termednic he markets or specia lty   markets These segments are fairly homogeneous in their attitudes about certain variables. Because of this intra-group similarity, they are likely to respond somewhat similarly to a given marketing strategy. That i s , they are likely to have similar feeling and ideas about a marketing mix comprised of a given product or service, so ld a t a g iven  price, distributed in a certain way, and promoted in a certain way. The purpose of segmentation is to identify and target prime customer groups (eg the 20% that account for 80% of your sales) so that you get the maximum return from a limited marketing budget (the most bang for your buck).

Market Segmentation Of Amul

•Homogeneity within the segment

•Heterogeneity between segments

•Segments are measurable and identifiable

•Segments are accessible and actionable

•Segment is large enough to be profitable.....

These criteria can be summarized by the word SADAM :

•S Substantial: the segment has to be large and profitable enough

•A Accessible: it must be possible to reach it efficiently

•D Differential: it must respond differently to a different marketing mix

•A Actionable: you must have a product for this segment

•M Measurable: size and purchasing power can be measured .

The Process-Data Model Of Marketing Segmentation

Above given is a generic process-data model is given for the whole process of segmenting and positioning as a basis of deciding on the most effective marketing strategy and marketing mix. This model consists of the three main activities: segmenting, targeting and positioning. It shows the chronological dependency of the different activities. On the right side of the model the concepts resulting from the activities are showed. The arrows show that one concept results from one or more previous concepts; the concept can not be made when the previous activities have not taken place. Below the three main activities are shortly described as well as their role as a basis for  the next step or their dependency on the previous step.

 

MARKET TARGETING

 After the most attractive segments are selected, a company should not directly s tar t   ta rge t ing  a l l   these  segments .  The a t t rac t iveness  of   the  segments   i s  a l so depending on o ther impor tant fac tors . In the main ac t iv i ty of def in ing a ta rge t market, four sub activities are given which are the bases for deciding on which segments will actually be targeted.

The four sub   activities performed by Amul while targetingare:-

•Defining the abilities of the product and resources needed to enter a market

•Analyzing competitors on their resources and skills

•Considering the company’s abilities compared to the competitors

•Deciding on the actual target markets.

 The first three sub activities are described at the topic competitor analysis. The last sub activity of deciding on the actual target market is an

i n f o r m a t i o n   m a d e   a v a i l a b l e   w h e n   c o m p a r i n g   t h e   c o m p an i e s   a b i l i t i e s   t o   t h e competitors’. This analysis leads to a list of segments which are most attractive to target and have a good chance of leading to a profitable market share. Obviously, targeting can only be done when segments are predefined; there have to be segments to analyze the competitors which are in this market. When the process of targeting is ended, the markets to target are selected, but the way to u s e   m a r k e t i n g   i n   t h e s e   m a r k e t s   i s   n o t   y e t   d e f i n e d .   T o   de c i d e   o n   t h e   a c t u a l marketing strategy, knowledge of the differential advantages of each segment is needed. When positioning a product, the segments are first analyzed, this process is described next

MARKETING MIX.

  The major marketing management decisions can be classified in one of the following four categories:

•PRODUCT

•PRICE

•PLACE

•PROMOTION

These variables are known as the marketing mix or the 4 P's of marketing. They are the var iables tha t market ing managers can cont ro l in order to bes t sa t i s fy customers in the target market. 

The Marketing Mix

The firm attempts to generate a positive response in the target market by blending these four marketing mix variables in an optimal manner. Now, lets see the marketing mix for new launch of AMUL’S i.e., their products, price, place and promotion.

Pricing strategy:

Competition Based Pricing

Setting the price based upon prices of the similar competitor products.

Amul’s new launch Pricing is based on three types:-1) Product is lasting distinctiveness from competitor's product. here we can assume a) The product has low price elasticity.b) The product has low cross elasticity. c) The demand of the product will rise.

2) Products have parishable distinctiveness from competitor's product, assuming the product features are medium distinctiveness.

3) Products have little distinctiveness from competitor's product. assuming that: a) The product has high price elasticity.b) The product has some cross elasticity.c)  No expectation that demand of the product will rise.

Price is the factor that beats out  all other choclates in the competition. Such as Cadbury. If you have been you must have seen that Amul and Cadbury frenchise are right next to each other. But if given the choice people would prefer Amul products and not Cadbury as the prices of Amul product is quite cheap as compared to their competitors like Cadbury and this has worked as an advantage for Amul since most of the customers prefer amul product over cadbury’s product, due to this price factor. The prices for an average milk product ranges between Rs. 20 and Rs. 35 By comparing the prices of the products of Amul and cadbury, we can see that the prices offered by Cadbury are on the higher side as compared to Amul. Thus we can see that cadbury’s target customers are professionals, working couples and families in the sec- a and sec-b categories that detest the loud ambience of Amul and who are willing to pay higher prices. Whereas Amul’s typical customers are

between the age of 07-50 years, which shows that these include children’s, youngsters and also aged people’s or are from the upper middle class or middle class families, who can afford these prices and looking at these target customers the company has designed its outlet to look young and trendy with vibrant colors such as brownie, black current(purple) and Butter scotch predominating the outlets.

Promotion strategy

ADVERTISING

Its advertising has also started using tongue-in-cheek sketches starring the Amul baby commenting jovially on the latest news or current events.This formed a large chunk of the collective memory of us Indians. We grew with them as the ads grew with us. They are quirky, poke fun at no one in particular and are pure eye-candy! We almost admire the speed with which the ad-people come up with copy and illustration for the ads, that change every few days!! From the Sixties to the Nineties, the Amul ads have come a long way. While most people agree that the Amul ads were at their peak in the Eighties they still maintain that the Amul ads continue to tease a laughter out of them The Amul ads are one of the longest running ads based on a theme, now vying for the Guinness records for being the longest running campaign everWhere does Amul's magic actually lie?Many believe that the charm lies in the catchy lines. That we laugh because the humour is what anybody would enjoy. They don't pander to your nationality or certain sentiments. It is pure and simple, everyday fun.

BRANDING

The first products with the Amul brand name were launched in 1955. Since then, they have been in use in millions of homes in all parts of India, and beyond. There is something more, though, that makes the Amul brand special and that something is the reason for the commitment to quality and value for money. Amul is the brand name of 2million farmers, members of 10,000 village dairy cooperative societies through out Gujarat. This is the

heart of Amul, it is what gives strength to Amul, and it is what is so special about the Amul saga. The Amul Pattern has established itself as a uniquely appropriate model for rural development. Amul has made India one of the largest milk producers in the world. Amul, therefore, is a brand with a difference. That difference manifests itself in a larger than life purpose. The purpose – freedom to farmers by giving total control over  procurement, production and marketing .Our commitment to the producer and our contract with the consumer is the reasons we are confident that cooperative brands, like Amul, will have an even bigger role to play in the next fifty years.

BANNERS:-

POSITION STRATEGY

 When the list of target markets is made, a company might want to start on deciding on a good marketing of a product. But an important step before developing the marketing mix is deciding on how to create an identity or image of the product in the mind of the cus tomer . Every segment i s d i f ferent f rom the o thers , so d i f ferent cus tomers wi th different ideas of what they expect from the product.

The Process Of Positioning The Product Of A Company:

1. Identifies the differential advantages in each segment2. Decides on a different positioning concept for each of these segments. This process is described at the topic positioning, here different concepts of positioning are given. The process-data model shows the concepts resul t ing f rom the d i f ferent ac t iv i t ies  before and within positioning. The model shows how the predefined concepts are the basis for the positioning statement. The analyses done of the market, competitors and abilities of the company are necessary to create a good positioning statement. When the positioning statement is created, one can start on creating the marketing mix.

B2C and B2B

The process descr ibed above can be used for both bus iness-to-cus tomer as wel l as  bus iness- to-bus iness  market ing .  Al though  most  var iables  used   in  segment ing   the market are based on customer characteristics, business characteristics can be described using the variables which are not depending on the type of buyer. There are however methods for creating a positioning statement for both B2C and B2B segments. One of these methods is MIPS: a method for managing industrial positioning strategies by Muhlbacher, Dreher an Gabriel-Ritter (1994)

MRAKETING RESEARCH & INFORMATION

Market research is discovering what people want, need, or believe. It can also involve discovering how they act. Once that research is complete it can be used to determine how to market your specific product. Whenever possible, try to reduce risks at the earliest possible stage. For example you could carry out market research early on and not wai t unt i l you are a lmost ready to enter the market . I f ear ly market research reveals tha t your bus iness idea has rea l potent ia l , you can use th is informat ion in  planning the build-up of your business. [I lar 1998]For starting up a business there are a few things should be found out through market research in order to know if your business is feasible. These are things like

Market Information

Market information is making known the prices of the different commodities in the market, the supply and the demand. Information about the markets can be obtained in several different varieties and formats. The most basic form of market information is the best quotation and last sale data, including the number of shares, with respect to a particular security at a given time. [Market research 2006]

Examples Of Market Information Questions Are:

•Who are the customers?

•Where are they located and how can they be contacted?

•What quantity and quality do they want?

•What is the best time to sell?

•What is the long-term or historical price data over a number of years?

•What is the expected production in the country?

•Is there more demand for one product or another? Etc.

CONCLUSION

Competition will never end so let's not  avoid it but face it confidently,"For a chief executive, unless he knows where he is going no one can take him there".What's the use of Marketing & Advertising if it does not reach the right people and y i e l d   d e s i r e d   r e s u l t s ?   T h e r e f o r e   i t   i s   n e c e s s a r y   f o r e v e r y   i n d i v i d u a l   w h o   h a s s o m e t h i n g t o s e l l b u t n o o n e t o b u y , t o d e t e c t t h e p r o b l e m a r e a s a n d t r y t o s o l v e t h e m .   B u t   f o r   t h i s ,   k n o w i n g   t h e   r i g h t   p r o b l e m   i s   e x t r em e l y e s s e n t i a l o t h e r w i s e hitting the target in dark means nothing. Therefore ,   i t i s   r igh t ly sa id   tha t a  "wel l  def ined problem is  ha l f done" .  Once  you k n o w   y o u r   d r a w b a c k s   o n l y   t h e n   y o u   c a n   c o r r e c t   i t .  T h e r e f o r e ,   t o   k n o w   y o u r   d r a w b a c k s   y o u   n e e d   t o  c o n d u c t   a   s u r v e y   a n d   g e t   i n f o r m a t i o n   r i g h t   f r om   t h e u l t imate users of your product . They should be asked to br ing out your drawbacks . T h i s w i l l h e l p y o u t o n o t o n l y k n o w y o u r p i t f a l l s b u t a l s o w h a t y o u r c u s t o m e r s w a n t a n d t h e i r l i k e s a n d d i s l i k e s a n d w h i l e d o i n g s o b u i l d a g o o d r a p p o r t w i t h your customers. While conducting such surveys you can also advertise your products among those customers who are not much aware of it."There are three ways of doing a thing—- the wrong way, the right way and our way"w h i c h e v e r   m a y   b e   y o u r   w a y   t h e   u l t i m a t e   a im   i s   t o   a c h i e v e   t h e   r e s u l t s   a n d i m p l e m e n t   t h e m   t o   m a x i m i z e c u s t o m e r   s a t i s f a c t i o n w e   a l l k n o w c o m p e t i t i o n i s i n t e n s e t h e n w h y n o t t a k e i t p o s i t i v e l y s o t h a t i t h e l p s u s t o i m p r o v e o u r p r o d u c t q u a l i t y ,   m a k e s   c u s t o m e r s   l o y a l   t o   u s ,   h e l p s  u s   k n o w   o u r   s h o r t c o m i n g s   a n d rectify them. The best way to overcome your competitors is to give your customers what they expect or probably more than that. T o   k n o w   t h e   c u s t o m e r s   e x p e c t a t i o n s   t o w a r d s   A m u l ,   I   ha d   c o n d u c t e d   a   m a r k e t R e s e a r c h   o f   t h e e x i s t i n g   c u s t o m e r s , w h i c h   h e l p e d   m e   t o   k n o w t h e   s a t i s f a c t i o n , a w a r e n e s s   a n d l i k i n g a m o n g   c u s t o m e r s   f o r t h e   p r o d u c t s o f   A m u l a n d   a n a l y s e t h e situation and provide them suggestion to improve the situation.