2 CONCEPT AND DEFINITION The concept of market segment is based on the fact that the market of commodities are not homogeneous but they are heterogeneous.Market represent a group of customer having common characteristics but two customer are never common in their nature, habits, hobbies income and purchasing techniques.
3 According to Philip Kotler , “ Market segmentation is sub-dividing a market into distinct and homogeneous subgroups of customers, where any group can conceivably be selected as a target market to be met with distinct marketing mix.”
4 LEVELS OF MARKET SEGMENTATION MARKETINGNICHES MARKETINGLOCAL MARKETINGINDIVIDUALS MARKETING
5 1. SEGMENT MARKETING Identifiable Group with in a Market with Similar Consists of a group of customers who share a similar set of needs and wants.Identifiable Group with in a Market with SimilarWantsPurchasing PowerGeographical LocationBuying Attitudes
6 FLEXIBLE MARKET OFFERING Even in segments 100 % needs are not same – consists of two partsNaked Solution :- products and services that all members of the segment values.Discretionary options :- that some segment members value. Each option might carry an additional charge.Example: Automobile industry – basic model is same but for A.C in the Car , power steering, power window buyer
7 has to pay extra price.Delta Airlines offers all economy passengers a seat and soft drinks. It charges economy passengers extra for alcoholic beverages.
8 Market Segments can be defined in many different ways Market Segments can be defined in many different ways. One way to carve up a market is to identify Preference segmentsSuppose ice cream buyers are asked how much they value sweetness and creaminess as two product attributes. Three different patterns can emerge.
9 Homogeneous preference : where all the consumer have roughly the same preferences.We would predict that existing brand would be similar and cluster around the middle of the scale in both sweetness and creaminess.Diffused preference :consumers vary greatly in their preferencesClustered preference :
10 Homogeneous Preference -no natural segments creaminesssweetnessHomogeneous Preference-no natural segments-all buyers have same preference
11 -no pattern (…or poor research) -take center position creaminesssweetnessDiffused Preference-no pattern (…or poor research)-take center position
12 -increases as number of competitors increases creaminesssweetnessClustered Preference-natural segments-increases as number of competitors increases
13 2. NICHE MARKETINGGroup of customers seeking a distinctive mix of benefits who are ready to pay extra premium.Niche = segment sub – segmentsEg. Washing detergents hard & gentle washes . Surf excel for tough stains ( hard on clothes) & Ezee from Godrej for delicate clothes.--- Astha , Sanskar , Q TV – focus on religion & spiritualism.DISTINCT NEEDSPAY PREMIUMSPECIALIZATIONLESS COMPETITIONPOTENTIAL
14 3. LOCAL MARKETING Chitle Pune sarees Kashmiri silk Marketing programs tailored to the needs & wants of local customer groups in trading areas, neighborhoods , etc.This trend is called grass roots marketing.Ex. – Spiderman 3 was released in 5 different language in India including bhojpuri.ChitlePune sareesKashmiri silk
15 4. INDIVIDUAL MARKETINGUltimate segmentation – segments of 1 or customized marketing or one to one marketing.Customization – empower the consumers to design the product or service offering of their choice.Ex. Paint companies have started doing this- Asian Paint , Nerolac , Berger Paints, Dell.
17 GEOGRAPHIC SEGMENTATION Divide the market into different group based on :Region – South India , North , Western Region, EastCity – metro cities, cities with population more than 1 millionWorldDensityClimateStatesEx.- McDonalds globally, sell burgers aimed at local markets, for example, burgers are made from lamb in India rather then beef because of religious issues. In Mexico more chili sauce is added and so on.
22 As people age their needs and wants change, some organizations develop specific products aimed at particular age groups for example nappies for babies, toys for children, clothes for teenagers and so on. Gender segmentation is commonly used within the cosmetics, clothing and magazine industry.In UK we have also seen the introduction of Maxim, (www.maxim-magazine.co.uk) a male lifestyle magazine covering male fashion, films, cars, sports and technology.
23 Income segmentationIt is another strategy used by many organizations.Daewoo aim their vehicles at price sensitive buyers who require a bundle of benefits for the price.In today's globally competitive environment brands are specifically developed and positioned within particular income segments in order to maximize turnover.Products and services are also aimed at different lifecycle segments. Holidays are developed for families, the 18-30's singles, and for those in their 50's.
27 OCCASIONS - Archies and Hallmark cards, Monaco at tea time. BENEFITS – Shampoo for hair conditioning, cleaning , hair fall defence dandruff controlUSER STATUS- light – medium – heavy userLOYALTY STATUS- hardcore loyal , split loyal- loyal to 2-3 brand ,shifting loyal, switcher
28 SegmentationThe most important base for segmentation is the Lifestyle as travelling decisions can be greatly influenced by the same.Other factors such as Level of Income, Availability of leisure time, etc.are secondary.
29 Targeting Mass Market: Consists of Vacationists that travel in large groupsThey prefer all-inclusive toursGenerally ConservativePopular Market:Smaller Groups going for inclusive or semi-inclusive toursGroups include pensioners, retired peopleIndividual Market:Consists of Chairmen, Sr. Executives, people on business visits.As lifestyle changes, preferences might change
30 SWOT Analysis Strengths: Geographical Diversity – Desert, Mountains, Forests and BeachesCultural DiversityWealth of archaeological sites and historic monumentsManpower costs are lowWorld class hotels presentWeaknesses:Lack of adequate infrastructureXenophobic attitude among certain sectionsNo proper marketing tools used
31 SWOT Analysis Opportunities: Proactive role of govt. in framing proper policiesAllowing entry of more multinational companiesGrowth of Domestic TourismThreats:Economic Conditions of the other countriesPolitical turbulence in Kashmir, GujaratAggressive strategies approached by other countries for tourism