1. Market Segmentation

2. Objectives: Describe the characteristics of markets and market segments. Discuss criteria for successful market segmentation. Discuss alternative strategies for selecting target markets.

3. Market Segmentation Market Segment Market Segment Market Segmentation Market Segmentation People or organizations with needs or wants and the ability and willingness to buy A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. The process of dividing a market into meaningful, relatively similar, identifiable segments or groups.

4. Reasons behind Segmentation- Segmentation enables the identification of groups of customers with similar needs, and the analysis of the buying behavior of these groups. Segmentation provides information for the specific matching of the design of marketing mixes with the characteristics of the segment. Segmentation helps marketers satisfy customers wants and needs while meeting the organization’s objectives.

5. Criteria for Segmentation Substantiality – Segment must be large enough to warrant a special marketing mix. Identifiability & Measurability – Segments must be identifiable and their size measurable. Accessibility – Members of targeted segments must be reachable with marketing mix. Responsiveness – Unless segment responds to a marketing mix differently, no separate treatment is needed. Actionable – Effective programs can be formulated for attracting and serving segments

6. Steps in Segmentation, Targeting, and Positioning 1. Identify Bases for Segmenting the Market 2. Develop Profiles of Resulting Segments 3. Develop Measures of Segment Attractiveness 4. Select Target Segment(s) 5. Develop Positioning for Each Target Segment 6. Develop Marketing Mix for Each Target Segment Market Positioning Market Targeting Market Segmentation

7. Levels of Market Segmentation Mass Marketing Same product to all consumers (no segmentation) Mass Marketing Same product to all consumers (no segmentation) Segment Marketing Different products to one or more segments (some segmentation)Segment Marketing Different products to one or more segments (some segmentation) Micro marketing Products to suit the tastes of individuals and locations (complete segmentation) Micro marketing Products to suit the tastes of individuals and locations (complete segmentation) Niche Marketing Mahindra Corporate Mahindra Corporate Different products to subgroups within segments (more segmentation) Niche Marketing Mahindra Corporate Mahindra Corporate Different products to subgroups within segments (more segmentation) Local Marketing Tailoring brands/ promotions to local customer groups Individual Marketing Tailoring products/ programs to individual customers

8. Market Segmentation Categories and Selected Variables SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Geographic Segmentation.. ad clip\23309_201083_Print_inside_529x529.jpg.. ad clip\23309_201083_Print_inside_529x529.jpg Climate Density of area City Size Region North, East, West, South Major metropolitan areas, small cities, towns Urban, suburban, exurban, rural Temperate, hot, humid, rainy Demographic Segmentation..\ad clip\idbi_bank_03012007.jpg..\ad clip\idbi_bank_03012007.jpg Income Marital status Sex AgeUnder 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+ Male, female Single, married, divorced, living together, widowed Under Rs. 25,000, Rs.25,000-Rs. 34,999, Rs. 35,000- Rs.49,999, Rs.50,000-Rs.74,999, Rs.75,000-Rs.99,000 etc Occupation EducationSome high school, high school graduate, some college, college graduate, postgraduate Professional, blue-collar, white-collar, agricultural,

9. continued SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Psychological Segmentation..\ad clip\psychographic seg.jpg..\ad clip\psychographic seg.jpg Learning-involvement Perception Personality Needs-motivationShelter, safety, security, affection, sense of self-worth Extroverts, novelty seeker, aggressive, low dogmatic Low-risk, moderate-risk, high-risk Low-involvement, high-involvement Subcultures (Race/ethnic) Religion Cultures (Lifestyle) Segmentation..\ad clip\woodland.jpg Economy-minded, couch potatoes, outdoors enthusiasts, status seekers ad clip\ZOYA.jpg..\ad clip\ALLEN SOLLY.jpg ad clip\ZOYA.jpg..\ad clip\ALLEN SOLLY.jpg Indian, Anglo-Indian Hindu, Shikh, Jewish, Moslem, other Punjabi, South-Indian, Bengali, Marathi Family life cycle Social classLower, middle, upper Bachelors, young married, full nesters, empty nesters AttitudesPositive attitude, negative attitude Sociocultural Segmentation ad clip\incredible_india_28032006.jpg ad clip\TIMES OF INDIA.jpg ad clip\incredible_india_28032006.jpg ad clip\TIMES OF INDIA.jpg

10. continued SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Use-Related Segmentation Brand loyalty Awareness status Usage rateHeavy users, medium users, light users, non users Unaware, aware interested, enthusiastic None, some, strong Use-Situation Segmentation Location Objective TimeLeisure, work, rush, morning, night..\ad clip\kurkure.jpg..\ad clip\kurkure.jpg Personal, gift, fun, achievement..\ad clip\naukri.jpg..\ad clip\naukri.jpg Home, work, friend’s home, in-store PersonSelf, family members, friends, boss, peer Benefit Segmentation Convenience, social acceptance, long lasting, economy, value-for-the-money

11. Bases for Segmenting Business Markets Bases for Segmenting Business Markets Bases for Segmenting Business Markets Geographic Buyer Characteristics Situational Factors Operating Characteristics Purchasing Approaches

12. Developing Segment Profiles Need to develop a profile or description of the “typical” customer in a segment. Segment profile might include demographics, location, lifestyle, and product-usage frequency.

13. Target Market  Marketers evaluate the attractiveness of each potential segment and decide in which they will invest resources to try to turn them into customers  A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.

14. Targeting To determine which, if any, of the segments uncovered should be targeted Evaluation of Market Segments - DAMP – Distinct – is each segment clearly different from other segments? – Accessible – can buyers be reached through appropriate promotional programmes and distribution channels? – Measurable – is the segment easy to identify and measure? – Profitable – is the segment sufficiently large to provide a stream of constant future revenues and profits?

15. Market Targeting Evaluating Market Segments Segment Size and Growth – Analyze sales, growth rates and expected profitability for various segments. Segment Structural Attractiveness – Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers. Company Objectives and Resources – Company skills & resources relative to the segment(s). – Look for Competitive Advantages.

16. POSITIONING

17. Positioning: Al Ries & Jack Trout Positioning is owning a piece of consumer’s mind Positioning is not what you do to a product; it’s what you do to the mind of the prospect You position the product in the prospect’s mind You concentrate on the perceptions of the prospect, not the reality of the product

18. Positioning Developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general.

19. Positioning for Competitive Advantage: Strategies Against a Competitor..\ad clip\xylo.jpg Against a Competitor..\ad clip\xylo.jpg Usage Occasions..\ad clip\scorpio.jpg Usage Occasions..\ad clip\scorpio.jpg Away from Competitors..\ad clip\outlander.jpg Away from Competitors..\ad clip\outlander.jpg Product Attributes..\ad clip\i10.jpg Product Attributes..\ad clip\i10.jpg Product Class ad clip\polo.jpg ad clip\polo.jpg Product Class ad clip\polo.jpg ad clip\polo.jpg Benefits Offered..\ad clip\spark.jpg Benefits Offered..\ad clip\spark.jpg User Class..\ad clip\Mahindra Quanto.jpg User Class..\ad clip\Mahindra Quanto.jpg B B A A E E D D C C H H G G F F

20. Positioning in B2B Market Product differentiation – Feature, Conformance, Performance, Durability, Reliability, Style, Design ad clip\Ozone Safe.jpg ad clip\Ozone Safe.jpg Service differentiation – Delivery, Installation, Customer Training, Consulting services, Repair, Replacement..\ad clip\HCL.jpg..\ad clip\HCL.jpg Personnel differentiation – Empathy, Competency, Credibility, Reliability, Responsiveness, Communication..\ad clip\MINT.jpg..\ad clip\MINT.jpg Image differentiation – Symbol, People, Events, Media, Community..\ad clip\dell.jpg..\ad clip\dell.jpg

21. Point of Parity (POP) & Point of Difference (POD)

22. POP & POD Points-of-Parity-Shared brand values – Necessary – Competitive

23. Identifying & Choosing POD Desirable ( Customer Perspectives) – Personality Relevant – Distinctive & Superior – Believable & Credible Deliverable ( Firm Perspectives) – Feasible – Profitable – Pre-emptive, defensive & Difficult to attack Differentiating ( Competitive Perspectives) – Unique

24. Positioning Guidelines Get the key consumer Insight: Find the GAP to occupy Main unique proposition/promise that the brand is going to offer/fulfill Make it specific, short and tangible Keep the positioning up-to-date