[ppt]segmentation, targeting & positioning · web viewbases of segmentation demographic...
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Segmentation, Targeting & Positioning
Concept of Market Segmentation Market segmentation is the process of dividing a potential
market into distinct sub-markets of consumers with common need and characteristics
Benefits of Market Segmentation Helps to understand the customer need To adopt better positioning strategies Proper allocation of marketing budget Helps in preparing a better competitive strategy Provides guidelines in preparing media plan of the company Different offerings in different segments enhances the sales Customer gets more customized product Helps company to identify niche markets Provides opportunities to expand market Encourages innovations
Requisites of Effective Segmentation
To be effective, segmentation should have the following characteristics
1. Measurable and Obtainable The size profile and other relevant characteristics
of the segment must be measurable and obtainable in terms of data
If the information is not obtainable, no segmentation can be carried out
2. Substantial The segment should be large enough to be
profitable For consumer markets, the small segment might
disproportionably increase the cost and hence products are priced too high
Requisites of Effective Segmentation
Accessible The segment should be accessible through
existing network of people at affordable cost
Differentiable The segments are different from each other
and require different 4Ps and programs Actionable The segments which a company wishes to
pursue must be actionable in the sense that there should be sufficient finance, personnel and capability to take them all
The Process of Market Segmentation
The process of market segmentation passes through the following stages:
Identify the existing and future wants in the current
market
Examine the attributes
that distinguish among the segments
Evaluate the proposed segment
attractiveness on the basis of
measurability, accessibility and
size
The Process of Market Segmentation
1. Identify existing and future wants in the current market
Marketers must examine the changing needs of the customer
This process provides opportunity to examine whether customers are satisfied with existing products or not
If they are not satisfied what are the features they are looking for the product
E.g.. Titan watches
The Process of Market Segmentation
2. Examine the attributes that distinguish among segments
In this process marketers should segregate different types of wants into homogeneous categories
This may be on the basis of product features, lifestyle or behavior
The process of market segmentation
3. Evaluate the proposed segment attractiveness on the basis of measurability, accessibility and size
Segments selected in second steps should be evaluated against the requisites, ie. Measurability, accessibility, substantial, actionable and differentiability
Bases of Segmenting Consumer Markets
Geographic Segmentati
on
Psychographic
Segmentation
Demographic
Segmentation
Behavioral Segmentati
on
CONSUMER MARKET
SEGMENTATION
Bases of Segmentation1. Geographic Segmentation Dividing the market into different
geographical units such as nations, states, regions, cities or neighborhoods
The company can operate in one or a few geographic areas or operate in all buy pay attention to local variations
Bases of segmentationDemographic Segmentation In demographic segmentation the market is
divided into groups on the basis of variables such as age, family size, family life-cycle, gender, income, occupation, education, religion, race, generation, nationality and social class
This is the most popular bases for distinguishing customer groups
One of the major reason is that consumers’ wants, preferences and usage rates are often associated with demographic variables
Bases of segmentation Some of the demographic variables are:A. AGE & LIFE-CYCLE STAGE On the basis of age, a market can be
divided into four parts viz. children, young, adults and old
A successful marketing manager should understand the age group for which the product would be sold and determine his marketing policy, pricing policy, advertising policy etc
Bases of segmentation B. Gender This segmentation is very common in
clothing, hair-styling, cosmetics etc C. Income Income segmentation is very popular in
such product and services such as automobiles, clothing, cosmetics, travel etc
But income does not always predict the best customers for a given product
Bases of Segmentation 3. PSYCHOGRAPHIC SEGMENTATION When the customers are categorized on the basis of life
style, personality or values People belonging to the same demographic group may
exhibit different psychographic profiles The major psychographic factors are: A.LIFE STYLE People exhibit different life style and goods they consume
express their life styles One of the most used psychographic profiling schemes is
called VALS developed by SRI International Inc. VALS-1 (First Version) groups the entire US population into 8
groups
Bases of SegmentationB. PERSONALITY When marketers use personality variables to
segment the markets, they endow their products with brand personality that corresponds to consumer personalities. Eg. Raymonds
C. SOCIAL CLASS It has a strong influence on consumer
preferences and the products they buy or consume
Social class becomes the key factor in buying
Bases of Segmentation4. BEHAVIORAL SEGMENTATION OR CONSUMER
RESPONSE SEGMENTATION: In behavioral segmentation, buyers are divided into
groups on the basis of their knowledge or attitude towards the use of , or response to a product
Some of the behavioral factors are:a. Occasions According to occasions, buyers develop a need,
purchase a product or use a product A company should consider critical life events to
see whether they are accompanied by certain need
Bases of Segmentationb. Benefits Buyers can be classified according to the
benefits they seek from the productsc. User Status Market can be segmented into non-users,
potential users, first time users and regular users of a product
Market leaders will focus on attracting potential users, whereas smaller firms will try to attract current users away from the market leader
Bases of Segmentationd. Usage Rate Markets can be segmented into light, medium and heavy users of
the product Heavy users are small percentage of the market but account for
high percentage of total consumption Marketers try to attract heavy users than light userse. Loyal Status Consumers have varying degree of loyalty to specific brands,
stores and other entities. Buyer can be divided into four groups according to brand loyalty status: Hardcore Loyals – Consumers who buy one brand all the time Split Loyals: Consumers who are loyal to two or three brands Shifting Loyals: Consumers who shift from one brand to another Switchers : Consumers who show no loyalty to any brand. When there
is a low involvement and few significant perceived brand differences, consumer try to purchase different brands in the category
Bases of Segmentationf. Buyer-Readiness Stage A market consists of people in different
stages of readiness to buy a product Some are unaware of the product, some
are aware, some are informed, some are interested, some desire the product and some intend to buy
Targeting Targeting is defined as a group of people or
organizations for which an organization designs, implements and maintains the marketing mix
Once the bases of segmentation are selected, the marketer has to identify the people or organization to whom the product is meant
SELECTING TARGET MARKET SEGMENTS Depending upon the emerging patterns of
market segmentation, there exists various segments in a market. They are:
Targeting Homogeneous Preference Showing no natural segments as in case of
soft drinks Diffused Preference Showing clear preference as in case of
automobile market Clustered Preference Market showing natural segments as in case
of occupation having impact on the types of clothes worn
Targeting The general strategy adopted for market
segmentation are:a. Undifferentiated Marketing It is a market coverage strategy in which the
company treats the target market as one and does not consider that there are market segments that exhibit uncommon needs
The company focus on the centre of the target market to get maximum advantage
The feature of ‘one product all segments’ calls for presenting one marketing mix for the target market. Example Coca Cola
Targetingb. Differentiated Marketing It is a market coverage strategy in which the
company goes for proper market segmentation as depicted by the analysis of the total market
The company goes for several products or several segment approach which calls for preparing different marketing mixes for each of the market segment
This is followed by Hindustan Lever that sell soap in different segments
Targetingc. Concentrated Marketing It is a market coverage strategy in which company
follows ‘one product one segment’ principle. The manufacturer gets maximum knowledge
about the segment’s needs and therefore acquires special reputation.
This strategy helps the small companies to stand against a large corporation because small companies can create niches in its one-product one segment approach by providing maximum varieties
Choosing a Market Coverage Strategy
FOCUS UNDIFFERENTIATED MARKETING
DIFFERENTIATED MARKETING
CONCENTRATED MARKETING
PRODUCT ONE/FEW MANY ONE/FEW
SEGMENT ALL MANY ONE/FEW
MARKETING MIX
ONE MANY ONE/FEW
COMPARISON OF MARKET COVERAGE STRATEGIES
Choosing a market coverage strategy
Undifferentiated Marketing
Differentiated Marketing
Concentrated Marketing
Constrained Firm Resources
More suitable Least suitable Most suitable
Common usage of products
Most suitable More suitable Least suitable
Different need satisfying products
Least suitable Most suitable More suitable
Market Positioning Each firm needs to develop a distinctive
positioning for its market offering Positioning is the act of designing the company’s
offering and image to occupy a distinctive place in the target market’s mind
Many marketers advocate promoting only one central benefit and Rosser Reeves called it as ‘ a unique selling preposition’ (USP)
Some of the USP includes ‘best quality’, ‘best service’, ‘lowest price’, ‘best value’, ‘safest’, ‘more advanced technology’ etc
Market Positioning Sometimes double benefit positioning may be necessary if two or more
firms claim to be best on the same attribute A company must avoid four major positioning errors:1. Under Positioning Some companies discover that buyers have only a vague idea of the
brand. The brand is seen as just another entry in a crowded market place
2. Over-positioning Buyers may have too narrow image of the brand3.Confused Positioning Buyers might have a confused image of the brand resulting from the
company’s too many claims or changing the brand’s positioning too frequently
4.Doubtful Positioning Buyers may find it hard to believe the brand claims in view of the
product’s features, price or manufacturer
Positioning Maps Is a two dimensional graph of how a product, brand
or company is perceived versus competition These maps are drawn on important buying
dimensions of consumer for company products as well as competitors products
Construction of Position Map Evaluate the buying dimension of customer Select two buying dimensions of consumer - Eg. Price
and quality Identify the relative market share Draw the circles according to relative market share on
two dimension graph
Bases of Positioning the Product
The bases for positioning strategies are:1. Attribute Positioning: A company positions itself on an
attribute such as size or number of years in existence
2. Benefit Positioning The product is positioned as the leader
in a certain benefit3. Use or Application Positioning Positioning the product as best for use
Bases of Positioning the Product
4. User Positioning Positioning the product as best for some user
group5. Competitor Positioning The product claims to be better in some way than
a particular competitor6. Product Category Positioning The product is positioned as the leader in a certain
product category7. Quality or Price Positioning The product is positioned as offering the best value