This document discusses market segmentation and targeting. It begins by explaining that not all customers are the same and that segmentation provides an opportunity to better understand customers. It then discusses myths about segmentation and explains that segmentation involves gathering information on customers to identify and describe segments with similar needs, behaviors, purchasing criteria. The document provides examples of different types of segmentation and outlines a four step customer profiling process. It also discusses approaches for targeting and allocating resources to different customer segments. Finally, it notes that while segmentation often works well, there are rare occasions when segmentation may not be required.

1. Well Known….
Targeting that lead to Segmentation
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2. Segmentation and Targeting
Bharat Chaudhary
Bharat Chaudhary
bharat_sanofi@yahoo.co.in
Disclaimer
Views presented during presentation are personal
Views presented during presentation are personal
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3. All customers are not created equal
q
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4. Measurement Science told me
but, my old grocery store knew ..
but my old grocery store knew
Market Segmentation
Customer Segmentation
Not seen many grocery stores closing
down despite of stiff competition
from external environment
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5. Segmentation provides
an opportunity to know customer better.…..
an opportunity to know customer better.…..
All three are important,
All three are important
but you can only excel in one and should choose your focus
Product
Product
Competitive edge based on cost (and price Excellence
competition) is not sustainable in the long
term. Product leadership is short‐lived, too
term Product leadership is short lived too
Technology moves fast and even products
that are not overtaken are easily replicated
that are not overtaken are easily replicated
Customer centricity is about long‐term
e at o s ps, t e e o e p o des susta ab e
relationships, therefore provides sustainable
advantages
Operational Customer
It also results in added competitiveness in the
p Efficiency Intimacy
other two dimensions.
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without author permission & Wiersema: ‘The Discipline of Market Leaders’
Treacy

6. Myths
about Segmentation..
about Segmentation
Market segmentation is portioning process
Market segmentation is portioning process
In reality segmentation is gathering process
Segmentation is only process or technique
p
This is another half truths. Its real impact comes from its
role as strategic marketing variable
Everyone is part of a market segment
Everyone is part of a market segment
Although this might be an ideal situation for the
marketer
k t
Once done, it doesn't require maintenance
Sales rep doesn't provide quality of information
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7. Segmentation is the
first step to a customer centric approach
first step to a customer centric approach
Customer segmentation aims to
Customer segmentation aims to
Identify , Describe and Quantify in the market
Segments : Similar Needs, Behaviors, Expectations & Purchasing criteria
Segments : Similar Needs Behaviors Expectations & Purchasing criteria
Improve the Targeting & ROI of marketing communication and sales activities
Actionable Measurable
Substantial
Accessible Differential
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8. ‘Typification’
Geographical Based
•Place Size Demographic Based
D hi B d
•Density •Specialty, Age
•Urban/Rural •Practice Type
•Climate/Distance •Nationality, Race, Region
2
Behavioral Based
B h i lB d
•Purchase Occasions
•Benefit Sought Segmentation
Use status
•User status
•Usage Rate , Loyalty
•Attitude towards brand
3
Value Based
Value Based
•Quantity based
•Single dimension
•Patient & Rx Information
Psychographic Based
y g p
•Social Class
•Lifestyle markers
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•Personality ( Authoritarian, Ambitious etc)

9. Quality of input is essential …
Four step profiling process
Four step profiling process
Rep collects data on
R ll d FLSM analyze profiling
FLSM l fili FLSM discuss with Reps
FLSM di i hR SLSM sign off
SLSM i ff
customers quality profiling outcome final profiling
~ 4 6 weeks
4‐6 ~1/2 weeks
1/2 ~2/3 weeks
2/3
Continuous improvement:
replicated each
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10. Targeting and
Resource allocation
Resource allocation
Stage 1 Stage 2 Stage 3 Stage 4
Data cleaning & Select the target High/Medium/Low Resource allocation
alignment number Aligned with mktg. and Territorial
Remove the junk and Validate through plan demarcation
non qualified answers
non qualified answers external data
external data Behavioral markers
Behavioral markers Adjust the call load
Adjust the call load
source
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11. Company wide approach
for high value customers…
for high value customers
Picket Fence
ustomers
Mass Marketing CRM
Number of Cu
Highest Value Customers
Customer Value
C t V l
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12. Different Customer
by Value….
by Value
Most Valuable Customers : Retain
Most Growable Customers : Grow
Marginal customers : Business as
usual?
l?
‘Below Zero’ Customers :
Dismiss, or ?
Service costs
Customer value segments
Actual value Strategic value (potential share of customer)
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13. Dynamic Segmentation
BPS Approach (A new hybrid Approach)
BPS Approach (A new hybrid Approach)
Behavioral Prescribers Segmentation enables sales people to
qualitatively and quantitatively adjust promotional activities depending
on the prescribing potential of each physician over time
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14. Some New Approaches
to Understand Customers…
to Understand Customers
Cost per Call vs ROI
C C ll
Customer relationship analysis (CRA)
Click stream Analysis (For digital/web campaigns)
Life time value of customer ( More practiced in high end products)
“The net present value of all future profit streams from an individual customer’s
relationship with the company”
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15. Classifying activities
To do or not to…
To do or not to
Stop doing Keep doing Do more
• Abundant data
Abundant data • Be Simple
Be Simple • Communication
• Averaging • Be Emphatic • Customization
• Analysis Paralysis
Analysis Paralysis • Be Repetitive
Be Repetitive • Clarifications
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16. Confusing factors
• Potential or Contribution ?
• Brand or Composite ?
• Territory or Nation ?
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17. 5 steps
to your goal
to your goal
Analysis
Validate
Questionnaire
Q i i
Communicate
Clarify Approach
Clarify Approach
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18. STP
at its best ☺
at its best.. ☺
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19. Majority of the
j y
times Segmentation
“WORKS”
In rare occasions ,
STP is not required
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20. Thank you
Bharat Chaudhary
Bharat Chaudhary
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