Principle of Marketing Topic Identifying & Targeting Market Segments Lecture No 7,8. By: Salman Shahid

Market Segmentation Targeting & positioning Market Segmentation: Dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products or marketing mixes.

Market Segmentation

Features of market segmentation It must be identifiable It must be accessible It must be optimum in size It must be profitable It must be durable It must be compatible

Levels of Market Segmentation Mass Marketing Segment Marketing Niche (concentrated) marketing Micro Marketing

Mass Marketing Mass Marketing is a market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer

Example of Mass Marketing

Segment Marketing Isolating broad segments that make up a market and adapting the marketing to match the needs of one or more segments (different income & age groups)

Example “Nokia” of Segment Marketing Price Rupees: 19290Price Rupees: Price Rupees: 9190

Niche (concentrated) marketing Focusing on sub-segments or niche with distinctive traits that may seek a special combination of benefits

Micromarketing The practice of tailoring products and marketing programs to suit tastes of specific individuals and location – includes local marketing and individuals marketing. (Software companies, weapons companies)

Bases for Segmenting Consumer Markets Geography –Nations –Country –Region of the country –State –City –County

Bases for Segmenting Consumer Markets Demography –Age –Gender –Family size –Family life cycle –Income –Occupation –Education –Ethnicity –Nationality

Bases for Segmenting Consumer Markets Psychographics –Social class (lower lowers, upper lowers, working class, middle class, upper middles, lower upper, uppers uppers) –Lifestyle (Achievers, strivers, strugglers) –Personality (compulsive, gregarious, authoritarian, ambitious)

Bases for Segmenting Consumer Markets Behavior –Purchase occasions –Benefits –User status –Usage rate –Loyalty status –Readiness stage

Bases for segmenting business markets Demography –Industry which industries that buy this product should we focus on? –company size what size companies should we focus on? –Location what geographical areas should we focus on?

Bases for segmenting business markets Operating variables –customer technologies –usage rate –user status –customer service requirements

Bases for segmenting business markets Purchasing approaches –centralized vs. decentralized purchasing –current vs. potential customers –purchasing criteria

Bases for segmenting business markets Situational factors –urgency of need –application of product –size of order

Evaluating market segments Segment characteristics –Measurable –Adequate size –Different response –Accessible –Actionable

Evaluating market segments Segment structural attractiveness –number & strength of competitors –availability & strength of substitute products –potential market entrants –supplier power –buyer power

Evaluating market segments Fit with company objectives & resources

Market Targeting Evaluating market segments In evaluating different market segments, a firm must look at three factors: segment size and growth Segment structural attractiveness Company objectives and resources Example of market targeting Technology, Agriculture, Textile, Education

Target market

Target market selecting market segments After evaluating different segments, the company must now decide and how many segments to serve. This is the problem target market selection.

Target market A set of buyers sharing common needs or characteristics that the company decides to serve.

Example of Target market Textile Females Males Children Senior citizens

Example of Target market Textile for males

Example of Target market Textile for Females

Example of Target market Textile children & senior citizens

Example of Target market Textile Bed sheets

Curtains

Woven garment

Market coverage strategies Undifferentiated marketing Differentiated marketing Concentrated marketing

Undifferentiated marketing A marketing-coverage strategy in which firm decides to ignore market segment differences and go after the whole market with one offer.

Example of Undifferentiated marketing

Differentiated marketing A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each.

Example of Differentiated marketing

Concentrated marketing A market-coverage strategy in which a firm goes after a large share of one or a few submarkets.

Positioning for competitive advantage Product position:- the why the product is defined by consumers on important attributes – the place the product occupies in consumers, minds relative to competing products

Example -1 Positioning for competitive advantage Honda civic advertises its low price.

Example-2 Positioning for competitive advantage BMW promotes performance