2. What is a ‘Market Segmentation’?
• A market consists of people or organizations with wants,
money to spend, and the willingness to spend it. However,
in most markets, all the buyers' needs are not identical.
• Therefore, a single marketing program for the entire market
is unlikely to be successful.
• A sound marketing program starts with identifying the
differences that exist within a market.
3. What is a ‘Market Segmentation’?
• In a process called market segmentation, market segments
are identified and then the company decides, which
segments will be treated as target markets.
• Market segmentation is customer oriented and consistent
with the marketing concept.
• It enables a company to make more efficient use of its
marketing resources
4. Market Segmentation Defined
• Market segmentation is defined as ‘the process of taking the
total, heterogeneous market for a product and dividing it into
several submarkets or segments, each of which tends to be
homogeneous in all significance’.
• For instance, instead of mentioning a single market for
'shoes', it may be segmented into several sub-markets, e.g.,
shoes for executives, doctors, college students etc.
5. Requirements for Market Segmentation
• For successful market segmentation, the following principles
are to be followed
Measurability of Segments
Accessibility of Segments
Representability of Segments
6. Measurability of Segments
• The main purpose of market segments is to measure the
changing behaviour patterns of the consumer
• Variations in behaviour pattern of the consumer is numerous
and complex
• Segments should be capable of giving accurate
measurements
7. Accessibility of Segments
• Accessibility of segments is comparatively easier because of
distribution, advertising media, salesmen etc
• Newspapers and magazines also offer help in this direction
• E.g. there are many magazines which are meant specifically
for the youth
• The task of accessibility is achieved through the internet
these days
8. Respresentability of Segments
• The segment should be large and profitable in order to be
considered as a separate segments
• Such segment must have individuality of its own
• Segment is usually small in case of industrial markets and
large in case of consumer products
9. Benefits of Market Segmentation
Finding out product acceptance
Adjustment and proper allocation of resources
Change required could be implemented without losing
markets. E.g. Diversification of product line
Effective promotion of products
Appropriate timing for introduction of new products can be
known.
12. Basis of Market Segmentation
• The various basis of doing Market Segmentation are:
• Geographic Segmentation
• Demographic Segmentation
• Socio – Economic Segmentation
• Product segmentation
13. Geographic Segmentation
• The marketer often fined it convenient to sub-divide the
country into areas in a systematic way.
• The great advantages of adopting this scheme are that
standard regions are widely used by Government and it
facilitates collection of statistics
• Most of the national manufacturers split up their sales areas
into sales territories either state-wise or district-wise.
14. Demographic Segmentation
• Demographic segmentation is done of the basis of:
• Age – children, teenagers, adults, old people
• Gender
• Family life cycle
• Income
• Occupation
• Level of education
15. Demographic Segmentation
• This is considered are more effective because the emphasis
ultimately rests on the customers
• Demographic variables are – Age, Gender, Income level,
Education Level etc.
• The variables are easy to recognize and measure
• For example, in the case of shoes, the needs and preferences
of each group could be measured with maximum accuracy.
16. Family life cycle
• Family life cycle can be subdivided into
• Young, single
• Young, married, no children
• Young, married, child under six
• Young, married, child over six
• Old, married, child under eighteen
• Older, single
• Others
17. Socio Economic Segmentation
• The segmentation here is done on the basis of social class
• E.g. working class, middle, income groups, etc.
• Since marketing potentially is intimately connected with the
"ability to buy", this segmentation is meaningful in deciding
buying patterns of a particular class.
18. Product Segmentation
• This segmentation is done on the basis of product characteristics:
Prestige products – automobile, clothing
Maturity products – cigarettes, blades
Status products – luxuries, diamonds
Anxiety products – medicines
Functional products – fruits, vegetables
20. What is a ‘Target Market’?
• A target market refers to a group of potential customers to
whom a company wants to sell its products and services
• This group also includes specific customers to whom a
company directs its marketing efforts
• Consumers who make up a target market share similar
characteristics including buying geography, buying power,
demographics, and incomes.
21. What is a ‘Targeting’?
• Targeting in marketing is a strategy that breaks a large
market into smaller segments to concentrate on a specific
group of customers within that audience.
• It defines a segment of customers based on their unique
characteristics and focuses solely on serving them.
• Instead of trying to reach an entire market, a brand uses
target marketing to put their energy into connecting with a
specific, defined group within that market.
22. Targeting Strategies
Three different approaches to target marketing can be
adopted
Undifferentiated marketing
Differentiated marketing
Concentrated marketing
23. Undifferentiated Marketing
[Standardization]
• In this strategy, the firm offers the same product
to different market segments
• It uses same communication, price and
distribution strategies
• Under such circumstances firms may adopt mass
advertising and other mass methods in marketing,
• e.g., Coca Cola.
24. Differentiated Marketing
• The company differentiates its products to suit
various segments and their expectation.
• Each segment has different characteristics
• For example, airline offers business class and
economy class flights.
• E.g. TATA manufactures watches under two labels
– TITAN and SONATA
25. Concentrated Marketing [focused]
• Only a specific customer group is targeted.
• Then new products are introduced and test marketing is
conducted, and this method is adopted
27. What is a ‘Positioning’?
• Positioning is the process of creating an image of the product
or service in the minds of the consumers
• Positioning defines where a product or service stands in
relation to others offering similar products and services in
the marketplace as well as the mind of the consumer.
• E.g. automobile companies can position their products as
‘safe’, durable consumer goods companies can position their
products as ‘strong and durable’ etc
28. Positioning Strategy
• Value Proposition: value proposition means why should a
customer purchase the product of a company? The company
must try to explain the customers, the benefits of using their
products and how different their products are from the
competitor’s products
• USP: USP stands for Unique Selling Proposition. It is that
‘one’ feature of the product which makes it stand apart from
its substitutes. E.g.
29. Product Differentiation
• Product differentiation: product differentiation is a way to
tell the consumers as to how different your products are from
the competitors. Differentiation can be done in the following
ways:
• On the basis of quality, durability and performance [multiple
characteristics]
• On the basis of price
• On the basis of after sales service
• On the basis of product features
• On the basis of guarantee and warranty offered