1. S.No. - 2/3 LECTURE TITLE – MARKET SEGMENTATION MODULE – 2 (HEALTHCARE MARKETING AND PATIENTS RELATIONS MANAGEMENT 1

2. ICRI, Mumbai

3. Steps in Market Segmentation, Targeting, and Positioning 3 Market Segmentation (Research) 1. Identify bases for segmenting the market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment

4. Step 1. Market Segmentation Levels of Market Segmentation 4 Through Market Segmentation, Companies Divide Large, Heterogeneous Markets into Smaller Segments that Can be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs. Mass MarketingSame product to all consumers(no segmentation, e.gn early nineties - Coca-Cola/in eighties – Ford ; only black) MicromarketingProducts to suit the tastes of individuals and locations(complete segmentation)

5. Levels of Market Segmentation 5 Niche MarketingDifferent products to subgroups within segments(more segmentation, i.e. Standard or Luxury SUV’s) Segment MarketingDifferent products to one or more segments(some segmentation, i.e. Marriott/ airlines) Local Marketing Tailoring brands/ promotions to local customer groups, i.e Sears Individual Marketing Tailoring products and programs to the needs of individual customers, i.e. Dell

6. SEGMENT MARKETING FLEXIBLE MARKET OFFERING NAKED SOLUTION- value for all segment members DISCRETIONARY OPTIONS – some members value; each option for additional charge EXAMPLE- different models of car in the same segment/ airlines (business v/s economy PREFERENCE SEGMENTS – Homogenous preference Diffused preference Clustered preference

7. NICHE MARKETING A more narrowly defined customer group seeking a distinctive mix of benefits Segments divided into subsegments Distinctive set of needs Pay a premium to firm satisfying these needs Niche segment is not likely to attract other competitors Nicher gains economies through specialisation Niche has size, profit, growth potential “Guerilla against Gorilla” IBM/ ezee/ Crack/ Genentech (cancer drugs)/ Spirulina/ German tech firms

8. Step 1. Market Segmentation Geographic Segmentation 8 Density or Climate City or Metro Size World Region or Country

9. Step 1. Market Segmentation Demographic Segmentation Dividing the market into groups based on variables such as: Age Gender Family size or life cycle Income Occupation Education Religion Race Generation Nationality 9

10. Step 1. Market Segmentation Psychographic Segmentation 10 Divides Buyers Into Different Groups Based on:

11. Step 1. Market Segmentation Behavioral Segmentation Dividing the market into groups based on variables such as: Occasions Benefits User status Usage rate Loyalty status Readiness stage Attitude toward product 11

12. Segmenting Business Markets 12 Demographics Operating Variables Purchasing Approaches Situational Factors Personal Characteristics Business Marketers Use Many of the Same Consumer Variables, Plus:

13. Segmenting International Markets 13 Factors Used to Segment International Markets Geographic Location Economic Factors Political and Legal Factors Cultural Factors

14. Step 1. Market Segmentation Requirements for Effective Segmentation 14 Size, purchasing power, profiles of segments can be measured. Segments can be effectively reached and served. Segments are large or profitable enough to serve. Measurable Accessible Substantial Differential Actionable Segments must respond differently to different marketing mix elements & programs. Effective programs can be designed to attract and serve the segments.

15. Step 2. Market Targeting Evaluating Market Segments Segment Size and Growth Analyze current 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 needed to succeed in that segment(s). Look for Competitive Advantages. 15

16. Step 2. Market Targeting Market Coverage Strategies 16 Segment 1 Segment 2 Segment 3 Segment 1 Segment 2 Segment 3 CompanyMarketingMix CompanyMarketingMix CompanyMarketingMix CompanyMarketingMix CompanyMarketing Mix 1 CompanyMarketing Mix 1 CompanyMarketing Mix 2 CompanyMarketing Mix 2 CompanyMarketing Mix 3 CompanyMarketing Mix 3 Market A. Undifferentiated Marketing B. Differentiated Marketing C. Concentrated Marketing

17. Step 2. Market Targeting Choosing a Market-Coverage Strategy 17 Company Resources Product Variability Product’s Stage in the Life Cycle Market Variability Competitor’s Marketing Strategies

18. Socially Responsible Target Marketing Smart targeting helps companies and consumers alike. Target marketing sometimes generates controversy and concern. Disadvantaged and vulnerable can be targeted. Cigarette, beer, and fast-food marketers have received criticism in the past. Internet has come under attack because of the loose boundaries and lack of control in marketing practices. 18

19. Discussion Connection At the last Discussion Connection, you segmented the U.S. footwear market. Now, pick two companies that serve this market and describe their segmentation and targeting strategies. Can you come up with one that targets many different segments versus another that focuses on only one or a few segments? 19

20. How does each company you choose differentiate its marketing offer and image? How has each done a good job of establishing this differentiation in the minds of targeted consumers?

21. Step 3. Choosing a Positioning Strategy Product’s Position - the way the product is defined by consumers on important attributes - the place the product occupies in consumers’ minds relative to competing products. Marketers must: Plan positions to give their products the greatest advantage in selected target markets, Design marketing mixes to create these planned positions. 21

22. Step 3. Choosing a Positioning Strategy 22 Step 1. Identifying Possible Competitive Advantages Step 2. Selecting the Right Competitive Advantage Step 3. Communicating and Delivering the Chosen Position

23. Identifying Possible Competitive Advantages Key to winning and keeping customers is to understand their needs and buying processes better than competitors do and deliver more value. Competitive advantage is an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits, that justify competitive advantage, 23

24. Identifying Possible Competitive Advantages 24 Services Differentiation i.e. Delivery, Installation, Repair Services, Customer Training Services Product Differentiation i.e. Features, Performance, Style & Design, or Attributes Image Differentiation i.e. Symbols, Atmospheres, Events Personnel Differentiation i.e. Hiring, Training Better People Than Competitors Do

25. Choosing the Right Competitive Advantages 25 Criteria For Determining Which Differences To Promote Affordable Superior Profitable Preemptive Distinctive Important Communicable

26. Selecting an Overall Positioning Strategy (Fig. 7.4) 26 More for More for the same More for Less The same for less Less for much less Price More The same Less More The Same Less Benefits

27. Communicating and Delivering the Chosen Position Once position is chosen, company must take strong steps to deliver and communicate the desired position to target consumers. All the company’s marketing mix must support the positioning strategy. Positioning strategy must be monitored and adapted over time to match changes in consumer needs and competitor’s strategies. 27

28. Review of Concept Connections Define the three steps of target marketing: market segmentation, market targeting, and market positioning. List and discuss the major levels of market segmentation and bases for segmenting consumer and business markets. 28

29. Explain how companies identify attractive market segments and choose a market-coverage strategy. Discuss how companies can position their products for maximum competitive advantage in the marketplace.

30. Thank You