Target Marketing

Socio-Economic Classification Urban Pakistan

Variables Used: Education of Chief earner + Occupation of the chief earner Chief Earner: The member of the household who contributes the most to the household and bears the greatest proportion of the overall household expanses.

Rationale for the classification of household on these two variables are: 1. The consumption, income and lifestyle of a household is strongly correlated with how educated and economically sound the chief earner is. 2. Income alone is not the true indicator as it is highly misinterpret. It is either understated or overstated. 3. In many households the chief earner is also the head of household. In such cases behavior/opinion/attitude of the chief earner may influence the behavior and lifestyle of all other members.

According to the population survey of Pakistan 1998, there are 6,24 million urban households. The average urban household size reported is 6.8

Size of the Classes

A1

0.17 million household (1 million people) 0.24 million household (1.5 million people) 0.62 million household (4.1 million people) 1.16 million household (8.1 million people) 1.35 million household (9.2 million people) 1.2 million household (8.2 million people) 1.5 million household 43.3% (10.3 million people) 6.6%

A2

10%

18.5%

21.6%

E1

E2

A1

Most urbanized, predominantly metropolitan class

Most educated and affluent group

Chief earner self employed/employed/professionals, medium/large businessmen or senior officers, executives in government, private or public limited companies. Substantial percentage of house wives are either graduates or post-graduates.
Extremely high durable ownership with high penetration of entertainment durables.

A1

Extremely high durable ownership with high penetration of entertainment durables.

Highest consumption of packaged edible and daily use products. Use of high-tech items such as personal computers, internet connection, credit card and mobile phones.

Greater per capita income smaller average household size

Highest consumption of both electronic and print media

Videos, elite magazines and English movies are possible media for marketing.

A2 Broadly labeled as well educated employed class of urban Pakistan

Chief earners in A2 class households are predominantly postgraduates working as lower/middle executives or officers in government/semigovernment institutions. High penetration of all large, brown and white appliances.
Entertainment durables such as decoders for satellite channels, Cd players etc. House wives are reasonably well educated and have a fewer number of children.

A2
.

Convenient packaged items i.e. packed spices and achaars are part of kitchen budget.

Bank account ownership of chief earners and housewives is relatively higher than lower SECs
Media consumption is quite high. Reachable by urdu, English daily morning paprers. Television viewer-ship, radio listener-ship and magazine readership is substantial.

B Exhibits characteristics of an upper middleclass. In almost half households, chief earners are small sopkeepers, one quarter are lower/middle officers or executives and remaining are supervisors. Majority of chief earners have college education (i.e. intermediates, graduates) while house wives have either some college education, or are matriculates. On an average, household have three children (persons less than 12 years of age). Half of the HHs who have children send them to English Medium schools.

B Relatively high consumption of squashes /red syrups and shampoo as compared to lower SEC. Consumption of most packaged items is as high that in A2 class with exception of noodles & cereals. Substantial penetration of durables such as air conditioners, freezers, cooking ranges, 20 inch TV sets. 90% in this class can be reached through either print or electronic media. 30 % listen to radio and read magazine. This class is quite reachable through Urdu video cassettes.

C Class which can be said to be small retailer class of urban Pakistan.

In 605 C class households, the chief earner is a small shopkeeper.

Education distribution of chief earner is broad ranging from primary to post graduate/professional. 30% house wives are illiterate.

Household size and presence of black and white TV are higher than 3 upper SECs.

27% of households have telephone connections. Penetration of expensive durable is low. There is a substantial usage of packed items and essential durables as sewing and washing machines are widely owned. Individuals in this class can be reached through Urdu monthly digests, television, radio and Urdu newspapers.

D
The lower middle class of urban Pakistan Owns major brown household durables and send children mostly to Urdu medium schools.

The chief earners in this class are; skilled workers, small shopkeepers, and non-executives employees with some school or college education not exceeding intermediate. Consumption of packed edibles and FMCGs is moderate. This class can be reached through monthly digests, television, radio, and Urdu newspapers.

E1: This class owns very basic durables such as black and white television sets, bicycles, sewing machines, etc. In half households, the housewife is illiterate. The chief earner has only some basic education (5 10 years). HHS are finaced/run by chief earners who are skilled/unskilled workers or petty traders, i.e. the lower status occupation categories. On an average more children are present per household than upper SECs. 70% are media contactable. They can be reahed mostly by television and Urdu newspapers especially the afternoon papers.

Classification of Socio-Economic Classes by Provinces

Punjab
A1 2%

Sindh
4%

NWFP
2%

Baluchistan
2%

A2 B C D E1 E2

3% 10% 18% 21% 22% 24%

4% 10% 19% 22% 17% 24%

4% 9% 18% 24% 13% 30%

5% 7% 16% 205 17% 32%

Socio-Economic Classes in Metros/Small Towns

Karachi
A1 A2 B C D E1 E2 4% 4% 11% 19% 23% 17% 22%

Lahore
3% 4% 11% 19% 23% 20% 20%

Islamabad/ Rawalpindi
4% 5% 15% 17% 27% 185 14%

Remaining Urban Centers

25 4% 9% 18% 205 20% 27%

Average number of 12+ Years Household Members

A1
4.89

A2
5.07

B
5.25

C
5.38

D
5.14

E1
5.04

E2
4.48

Average Number of Children

A1
2.67

A2
3.00

B
2.89

C
3.06

D
3.14

E1
3.19

E2
3.26

Household Size in each SEC

A1
6.6

A2
6.93

B
7.14

C
7.62

D
7.46

E1
7.49

E2
7.47

5% of households in A1 class are 2 members household. 14% in A1, 11% in A2, 10% in B class are 4 members HHs. 17% in A1, 18% in A2, 15% in class B are 5 member HHs. 10% of HHs in E1 and E2 are 9 member HHs. 15% of A1 HHs, 185 of A2 HHs, 20% of B HHs, 24% of C HHs, 21% of D HHs, 22% of E1 HHs and 22% E2 HHs are 10 or more than 10 member households.

Number of Earners

No. of Earners
1 2

A1
61% 21%

A2
59% 26%

B
60% 24%

C
55% 25%

D
58% 24%

E1
58% 25%

E2
56% 24%

3
4 5 or more

12%
4% 2%

8%
5%

10%
4% 2%

12%
65 1%

11%
5% 2%

12%
4% 2%

12%
5% 3%

Defined
Identifying and communicating with groups

of prime prospects

Who Is Going To Buy Your Product?

Has the target changed? Is it going to be profitable? What is the rationale for

selecting this target?

Exhibit 4.1: The head and visual attracts the prime prospects

Marketing Generalization
Marketers have a tendency to

generalize Yet, we know better A cardinal rule in marketing has always been to know your market

Defining Prime Prospects

Target marketing

Exhibit 4.2: This Internet site attracts musicians and buyers with a novel idea, They Buy it. We pay you.

Defining Prime Prospects

(continued)

Where Do We Start? Census Data Minority Markets

Defining Prime Prospects

(continued)

Households Household Income Spending Marrieds Birthrate Population

What other demographic factors do you think might be important in defining prime prospects?

Marketing concept
A management orientation that views the needs of

consumers as primary to the success of a firm Customer value heart of concept Develop customer relationship ( customer orientation )vis a vis making a sale Target marketing , positioning, value proposition Market intelligence- to develop total marketing programs Profitability vs sales vol Continuous improvement Customer focused organizational structure

What is a product
A bundle of ingredients put together for sale

as something useful to a consumer Represent a bundle of satisfactions, WEIGHTAGE GIVEN TO different satisfactions, designed for different groups Matching people with benefits creates loyalty & insulation against competitive attacks

Brand Loyalty -Six segments

National brand loyal- buy single national brand

at regular price National Brand Deal-purchases made on price / better deal- more store switching Private label loyal- segment buys the private label offered by the store where they shop. Private label deal-segment shops at many stores and buys the private label of each store on deal National brand switcher- switch regularly among various national brands in the market. Private label switcher- segment isn't very deal prone, buys private labels at regular price.

What Is a Market?
Market is a group of people: Who can be identified Who could use our product Who could afford to buy it Who can be reached

Some trends to watch

Population- determine fastest growing

markets Income- and spending- discretionary Living patterns- singles, single parents, childless young couples, dual earner married couples with children, empty nesters

Market
group of people who can be identified by some

common characteristic, interest, or problem, use a certain product to advantage, Can afford to buy it, and can be reached through some medium EG: IDB, CB, FB, NLB- market constituencies Concept of Majority fallacy: initial entrants into a field will do good, and appeal to a broader group, later entrants may gain a larger market share by tapping minority segmentsniches

Exhibit 4.4: Visual puns attract people with lawns that have weeds

From Generic to Product Markets

Generic MKT- market with broadly similar needs

and sellers offering various , diverse ways of satisfying those needs. Looks at markets from a customers point of view eg Status Seekers have different ways to satisfy their status needs-MERC, designer outfit, Luxury cruise. Sellers in the generic status seeker market focuss on the need the customer wants satisfied- not on how the sellers product is better than that of another producer.

From Generic to Product Markets

Product MKT- A market with very similar

needs and sellers offering close substitute ways of satisfying those needs
If the status seeker wants to satisfy his

status need with a new expensive car( Product market) In this product market there may be options-Merc, Lexus, BMW, Jaguar-competing for consumers money

What is competition
Product category &subcategories, What products in what categories compete for

1. 2. 3. 4. 5. 6.

consumers attention and $ Marketers need to answer a number of question : Who are our competitors What brands What other product categories Are there many brands or few Which are strong, which are vulnerable Are there any strong well established brands, or is the market volatile

What is competition
A major purpose of target marketing is to

position a brand effectively within a product category ( eg soft drinks) or subcategory( lemon lime soft drinks) Products are normally competitive among a segment rather than across several groups Eg Shampoos Competition more broadly includes all the forces that inhibit the sale of the product- ( same product class or subclass)

Planning The Advertising

Market Segmentation Geographical Segmentation Product User Segmentation Lifestyle Segmentation

Exhibit 4.6: Lifestyle is important for many product and services, Congoleum says, Floors for the way you live.

Steps in Segmentation, Targeting, and Positioning

6. Develop Marketing Mix for Each Target Segment 5. Develop Positioning for Each Target Segment 4. Select Target Segment(s) 3. Develop Measures of Segment Attractiveness

Market Positioning

Market Targeting

2. Develop Profiles of Resulting Segments

1. Identify Bases for Segmenting the Market

Market Segmentation

Step 1. Market Segmentation

Levels of Market Segmentation Mass Marketing
Same product to all consumers (no segmentation) Segment Marketing Different products to one or more segments (some segmentation)

Niche Marketing Different products to subgroups within segments (more segmentation) Micromarketing Products to suit the tastes of individuals and locations (complete segmentation)
Local Marketing
Tailoring brands/ promotions to local customer groups

Individual Marketing
Tailoring products/ programs to individual customers

Step 1. Market Segmentation

Bases for Segmenting Consumer Markets
Geographic
Nations, states, regions or cities

Demographic
Age, gender, family size and life cycle, or income

Psychographic
Social class, lifestyle, or personality

Behavioral
Occasions, benefits sought, user status, usage rate, loyalty

Requirements for Effective Segmentation

Measurable

Size, purchasing power, profiles of segments can be measured.

Segments can be effectively reached and served.

Accessible

Substantial

Segments are large or profitable enough to serve.

Differential

Segments must respond differently to different marketing mix elements & programs.

Actionable

Effective programs can be designed to attract and serve the segments.

Segmenting
Clustering people with similar needs into a

market segment Market segment- a homogenous group of customers who will respond to a marketing mix in a similar way

Criteria for segmenting a broad product market

Homogenous( similar) within- The customers in

a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions Heterogeneous ( different) between- the customers in different segments should be as different as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions

Specific Targets
Single TM approach- Segmenting the market and

picking one of the homogenous segments as the firms target market Multiple TM approach- Segmenting the market and choosing 2 or more segments, then treating each as a separate target market needing a different marketing mix Combined approach- combining 2 or more sub markets into 1 larger target market as basis for 1 strategy

Market Segmentation
end up talking to no body MS- The division of an entire market of consumers into groups whose similarity makes them a market for products serving their special needs Types : Geographic Product user ( amt of product usage markets with highest sales potential Sement divided into all users and subdivided into H/M/L users) The definition of usage varies with the product category
Sometimes When you talk to everybody , you

 Life Style Segmentation-AIO measure 1. Activities, leisure time, preferences, preferences for social events, community involvement 2. Interests, family orientation, sports interests, media usage 3. Opinion, political preferences and views on various social issues Benefits and attitude segmentation- cluster people into groups based upon what they want in a product.

Speed Bump: Linking the Concepts

Using the segmentation bases youve just read about, segment the Pakistani footwear market.
>Describe each of the major segments and subsegments.

Do you think some general-market advertising efforts are effective in reaching ethnic groups?

Market Targeting
Evaluating Market Segments Segment Size and Growth Analyze 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.

Market Targeting
Market Coverage Strategies
Company Marketing Mix
A. Undifferentiated Marketing

Market

Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3

B. Differentiated Marketing

Segment 1 Segment 2 Segment 3

Company Marketing Mix

Segment 1 Segment 2 Segment 3

C. Concentrated Marketing

Step 3. Positioning for Competitive Advantage

Products Position - the way the

product is defined by consumers on important attributes - the place the product occupies in consumers minds relative to competing products.

Step 3. Positioning for Competitive Advantage

Marketers must:

Plan positions to give their products the greatest advantage in selected target markets, Design marketing mixes to create these planned positions.

Step 3. Positioning for Competitive Advantage strategies

Product Class Away from Competitors Product Attributes Benefits Offered
C D E B F

G H

Against a Competitor

Usage Occasions

User Class

Steps to Choosing and Implementing a Positioning Strategy

Step 1. Identifying Possible

Competitive Advantages: Competitive Differentiation.

Step 2. Selecting the Right

Competitive Advantage: Unique Selling Proposition (USP).

Steps to Choosing and Implementing a Positioning Strategy

Step 3. Communicating and

Delivering the Chosen Position.

According to Exhibit 4.9, the heavy users of brand X are women aged 55 and older. What products would be appropriate for this target market?

Segmentation on needs, social values

NEED

NEED
" The lack of something requisite,

desirable, or useful; the lack of the means of subsistence."

Maslows Hierarchy of Needs

MOST NEEDS HAVE TO DO WITH SURVIVAL PHYSICALLY AND PSYCHOLOGICALLY

PHYSIOLOGICAL OR SURVIVAL NEEDS

Maslows Hierarchy of Needs

ON THE WHOLE AN INDIVIDUAL CANNOT SATISFY ANY LEVEL UNLESS NEEDS BELOW ARE SATISFIED

SAFETY NEEDS

PHYSIOLOGICAL OR SURVIVAL NEEDS

Maslows Hierarchy of Needs

LOVE, AFFECTION, AND BELONGINGNESS NEEDS

SAFETY NEEDS

PHYSIOLOGICAL OR SURVIVAL NEEDS

Maslows Hierarchy of Needs

ESTEEM NEEDS

LOVE, AFFECTION, AND BELONGINGNESS NEEDS

SAFETY NEEDS

PHYSIOLOGICAL OR SURVIVAL NEEDS

Maslows Hierarchy of Needs

NEED FOR SELFACTUALIZATION

MASLOW EMPHASIZES NEED FOR SELF ACTUALIZATION IS A HEALTHY MANS PRIME MOTIVATION

Maslows Hierarchy of Needs

NEED FOR SELFACTUALIZATION

MASLOW EMPHASIZES NEED FOR SELF ACTUALIZATION IS A HEALTHY MANS PRIME MOTIVATION SELF-ACTUALIZATION MEANS ACTUALIZING ONES POTENTIAL BECOMING ALL ONE IS CAPABLE OF BECOMING

Maslows Hierarchy of Needs

NEED SELFACTUALIZATION

ESTEEM NEEDS

LOVE, AFFECTION, AND BELONGINGNESS NEEDS

SAFETY NEEDS

PHYSIOLOGICAL OR SURVIVAL NEEDS

SOCIAL VALUE GROUPS

CONTENTED CONFORMERS

Want to be 'normal' so go along with the herd. Accepting of their lot, they are comfortable and contented in the secure world they have created.

DISCONNECTED

Stand apart and are embittered, and therefore apathetic. Tend to live in the ever present now, not thinking of tomorrow's consequences.

ESTEEM SEEKERS

Acquisitive and materialistic they aspire to what they see as the symbols of success, both in terms of 'possessions' and 'experiences'.

INNOVATORS

Self confident risk takers, they seek out the new and the different and set their own targets to achieve.

SELF ACTUALISERS Seeking the highest levels of personal development,

they are people and relationship oriented and consequently are tolerant and empathetic. Innovative and experimental by nature they are open, sociable, farsighted and non-materialistic. They have the self confidence to back their own judgment and the vitality to sweep others along with them.

STRIVERS

Looking towards Outer Directedness, image and status are important but only to provide acceptance from their peer group so hold on to traditional values.

TRADITIONALISTS

Risk averse, they look to traditional values and behaviors for guidance. Quiet and reserved, they hang back and try to blend in with the crowd.

Gear up for Generation Next

They were born between 1976 & 1987. They represent 16% of the population (45 million), and will be societys key influencer group in 2005 What Are Their Values? They want it all -- fame, luxury, fortune

Self-confident, assured, not intimidated

A sense of entitlement -- they want it easily and quickly

Theyre in command & control of their own destiny, play by their own rules

More likely to be ruled by their instincts than homework They value the fast pace of life

Technology is an important part of their persona

Theyre multicultural-- tolerant, pluralistic, diverse Highly parochial -- little interest in things beyond their realm, they are their own ******

Theyre great consumers but tough customers

Consumption oriented, but demanding negotiators with high expectations Its all about them They must be in the spotlight, putting their personal stamp on everything They want to form relationships with their brands, which includes a significant emotional component The brand must stay fresh It must be fun and entertaining

Dont expect em to play by the rules

They distrust the system and want to beat it

The Most Intelligent, Informed Consumer Ever

Concurrent with the shifts in power to individuals is the emergence of an incredibly savvy, wise consumer.
Key trend drivers: More access to & utilization of information More competitors aggressively seeking their business

Hard-earned lessons learned during the downsizing and recession of the early 90s Greater buying power More experience in finding deals and discounts Higher levels of education Higher levels of sophistication This increasingly discerning consumer will demand more recognition and respect from both advertisers and agencies

More sophisticated consumers (not just in urban areas) demand more sophisticated products: design and function. (e.g targets designers) Successful brands must offer more than status: a good value and connection with consumers personal values and priorities