marketing management
TRANSCRIPT
WHAT ARE THE DIFFERENT LEVELS OF MARKET SEGMENTATION
POSSIBLE LEVELS OF SEGMENTATION
Full Market Coverage Multiple Segments Single Segments Individuals as Segments
Shivam Verma || IIT Delhi
FULL MARKET COVERAGE
Shivam Verma || IIT Delhi
FULL MARKET COVERAGE
A firm attempts to serve all customer groups with all the products they might need.
Only large firms can undertake a full market coverage strategy
Cam cover a whole market in 2 broad ways Differentiated marketing Undifferentiated marketing
Shivam Verma || IIT Delhi
FULL MARKET COVERAGE
Undifferentiated Marketing or Mass marketing The firm goes after the whole market with one offer to the bradest number of buyers
Mass distribution mass communication Appropriate when all consumers have same preferences and market has no natural segments
Henry Ford, Model-T ford in one colour, black Lowest cost lower prices higher margins Increasing Splintering of market, proliferation of channels & communication is making difficult and expensive to reach mass audience
Shivam Verma || IIT Delhi
FULL MARKET COVERAGE
Differentiated Marketing The firm sell different products to all the different segments of the market
Creates more total sales Increase cost of doing business No generalizations about its profitability are valid
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MULTIPLE SEGMENTS
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MULTIPLE SEGMENTS
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Selective Specialization.
A firm selects subset of possible segments(suprasegments), each attractive and appropriate
May or may not be synergy among the segments
Diversifies the firm’s risk
Example: symphony orchestras
MULTIPLE SEGMENTS
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Synergy can be achieved with-
Product specialization- Sells a certain product to several different market segments Building strong reputation on specific product area Product maybe supplanted by entirely new technology
Market specialization- Firm concentrates on serving many needs of a particular customer group Building strong reputation among this customer group Customer group may suffer budgt cuts or shrink in size
SINGLE SEGMENTS
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SINGLE SEGMENTS
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Markets to only one segment
Example: Porsche on sports cars and Volkswagen on small cars
Deep knowlegde on segment’s need
Strong market presence
Operating economies by specializing its production, distribution and promotion
NICHE MARKETING
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NICHE MARKETING
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Niche- narrowly defined customer group seeking distinctive mix of benefits within a segment.
Marketers aim to understand customers’s needs so well that hey willingly pay a premium
Example: Revolution plus sized apparel for women.
Niche is fairly small but has size, profit and growth potential (‘chasing the long tail’)
Unlikely to attract competition
INDIVIDUAL MARKETING
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INDIVIDUAL MARKETING
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Segments of one
One to one marketing
Major source- Internet
Customerization mass customization that empowers consumers to design products and services according to their needs
Firms provide platform and tools and rents to customers the means to design their own product
Raises costs
CREDITS
All Photos are taken from google images
Shivam Verma || IIT Delhi
IN WHAT WAYS CAN A COMPANY DIVIDE A MARKET INTO SEGMENTS?
BASES FOR SEGMENTING CONSUMER MARKETS
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• Geographic
Segmentation
• Demographi
c Segmentation
• Psychograph
ic Segmentation
BehaviouralSegmentation
GEOGRAPHIC SEGMENTATION Divides into geographical units such as nations, states, regions, countries, cities or neighbourhood
There are differences in consumer preferences, purchase patterns, and behaviours across regions
Hence different market effortsShivam Verma || IIT Delhi
DEMOGRAPHIC SEGMENTATION
Age and life cycle stage Lifestage
Gender Income Shivam Verma || IIT Delhi
AGE AND LIFE CYCLE STAGE
Titan’s Zoop targets 6-14 year-old-children by using design elements that reflect the preferences of the target segment
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LIFE STAGE
iBall Aasaan, targeted at citizens, has features that are compatible with the needs of the segment
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GENDER
Today, many companies are targeting women, and not just men, for their two-wheeler brands. Mahindra Rodeo, for example, uses Kareena Kapoor as its brand ambassador, suggesting the brand’s qualities of power and style
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INCOME
With the increase in income, luxury wristwatch brands such as TAG Heuer are increasing their visibility and presence in the Indian market
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SOCIO-ECONOMIC CLASSIFICATION
Rural areas are emerging as important markets for many products and services.
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PSYCHOGRAPHIC SEGMENTATION Psychographics is the science of using psychology and demographics to better understand consumers
Buyers are divided into different groups on the basis of psychological/personality traits, lifestyle, or values
Popular and commercially available classification system is Strategic Business Insight’s (SBI) VALS framework.
Shivam Verma || IIT Delhi
BEHAVIOURAL SEGMENTATION
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BEHAVIOURAL SEGMENTATION
Shivam Verma || IIT Delhi
Marketers divide buyers into groups on the basis of their knowledge of, attitude toward, use of, or response to a product.
•Occassions•User Status•Usage Rate•Buyer Readiness Stage•Loyalty Status•Attitude•Multiple Bases
Needs and Benefits
Decision Roles
User and Usage- Real user and Usage-Related Variables
BUYER-READINESS STAGE
LifeCell uses celebrity endorsements to introduce umbilical cord stem cell banking in India.
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BUYER-READINESS STAGE
Example of Marketing Funnel
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LOYALTY STATUS
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Hard-core loyals- Consumers who buy only one brand all the time
Split loyals- Consumers who are loyal to two or three brands
Shifting loyals- Consumers who shift loyalty from one brand to another
Switchers- Consumers who show no loyalty to any brand
CREDITS
All Photos are taken from google images and Book on ‘Marketing Management’ by Kotler
Shivam Verma || IIT Delhi
WHAT ARE THE REQUIREMENTS FOR EFFECTIVE SEGMENTATION ?
STEPS IN SEGMENTATION PROCESS
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Needs-Based Segmentation
Segment Identification
Segment Attractiveness
Segment Profitability
Segment Positioning
Segment Acid Test
Marketing-Mix Strategy
BUT NOT ALL SEGMENTATION SCHEMES ARE USEFUL
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We need an effective segmentation criteria
EFFECTIVE SEGMENTATION CRITERIA
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Market segments must rate favourably on five key criteria:
Measurable
Substantial
Accessible
Differentiable
Actionable
MARKET SEGMENTS SHOULD ALSO BE ATTRACTIVE IN THE LONG RUN
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Michael Porter’s five forces can determine the intrinsic long-run attractiveness of a market segment
MARKET SEGMENTS SHOULD ALSO BE ATTRACTIVE IN THE LONG RUN
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Threat of intense segment rivalry
Threat of suppliers’ growing bargaining
power
Threat of substitute products
Threat of new entrants
Threat of buyers’ growing bargaining
power
CREDITS All Photos are taken from google images
Shivam Verma || IIT Delhi
HOW SHOULD BUSINESS MARKETS BE SEGMENTED?
SEGMENTING BUSINESS MARKETS
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Business markets can be segmented using same variables to segment consumer markets Ex- geography, benefits sought, usage rate etc.
But other variables can also be used for business markets Ex- operating variables, situation factors, personal characteristics etc.
MAJOR SEGMENTATION VARIABLES FOR BUSINESS MARKETS
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Demographic
Operating Variables
Purchasing Approaches
Situation Factors
Personal Characteristics
SEQUENTIAL PROCESS OF SEGMENT IDENTIFICATION
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Example-
1. Macrosegmentation1. End use market to serve- Automobile,
Residential, Beverage containers2. Product application- semifinished
material, building components, aluminium mobile homes
3. Customer size- large customers
2. Microsegmentation1. Distinguished among customers
buying on price, service, quality
FLEXIBLE MARKET OFFERING
NAKED SOLUT
ION
Product and service elements that all segment members value
DISCRETION
ARY OPTIO
NS
Some segment members value options but not all.
Buyer has to pay more
Shivam Verma || IIT Delhi
CREDITS
All Photos are taken from google images
Shivam Verma || IIT Delhi
HOW SHOULD A COMPANY CHOOSE THE MOST ATTRACTIVE TARGET MARKETS?
EVALUATING DIFFERENT MARKET SEGMENTS The firm must look at 2 factors:
Overall attractiveness of the segment
Company’s objectives and resources
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THE MARKET MUST HAVE ATTRACTIVE CHARACTERISTICS
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SizeGrowth
ProfitabilityScale Economies
Low Risk
SOME QUESTIONS THAT SHOULD BE ANSWERED
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oHow well does a potential segment score on the effective segmentation five criteria?
oDoes investing in the segment make sense given the company’s long run objectives?
oDoes the company lack one or more necessary competencies to offer superior value?
oWhich level of segmentation is required?
ETHICAL CHOICE OF MARKET TARGETS
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oAvoid consumer backlash
oPublic controversy due to unfair advantage of vulnerable groups
oFaulty products
CREDITS
All Photos are taken from google images
Shivam Verma || IIT Delhi
THANK YOU
DISCLAIMER
Created by Shivam Verma, IIT Delhi, during an internship with Prof. Sameer Mathur,
IIM Lucknow,www.IIMInternship.com ”