SEGMENTATION AND TARGETING STRATEGIES

By: ANKITA GAUR 05-MBA-2012 MEENU GUPTA 29-MBA-2012 SAKSHI GUPTA 45-MBA-2012

A Market Is...
people or organizations with needs or wants, and with the ability and the willingness to buy.

A group of people that lacks any one of these characteristics is not a market.

The Concept of Market Segmentation

TITAN WATCHES

Market can be segmented using several bases

A market/ consumer population for a product can be segmented using several relevant bases. The major ones include: Geographic Demographics Socio-cultural Psychographic Psycho-graphics Buying Behavior

Geographic Segmentation

Geographic decides the product consumption pattern. People in coastal areas of Konkan and Goa relish rice, a staple grain there and fish abundantly available from sea. Southern are found of coffee and north Indians like Tea

 Age: It is essentially a case of age based segmentation of a market.

Example: Amul has segmented his product in different age group

For kids: Amul kool, chocolate milk, Nutramul energy drink. For Youth: Amul cool kafe. For womens and older people: Amul calci+, Amul Shakti energy drink Gender: Gender is another key variable/base under demographic segmentation.

 Example: Adidas targets women in India

German shoe maker Adidas is trying to develop the women segment in India for its products.
Emami segmented its product in gender Womens: Naturally fair Men: Fair and handsome

 Socio-Cultural Factors McDonald has both veg and non veg burger. McDonald has veg burger for vegetarian and nonveg burger for non vegetarian. Psychographic segmentation Life style:

Buying Behavior Segmentation

Usage rate: - Heavy user / moderate user / light user of a product. User status: - Regular / potential / first time user / irregular /occasional. Loyalty to brand: - Hard core loyal / split loyal / shifting / switches. Occasion: - Holidays and occasion stimulate customer to purchase products. Attitude toward offering: - Enthusiastic / positive attitude / negative attitude / indifferent / hostile. Example: Shampoos, soap and all FMCG products buying behavior segmentation is used.

TYPE OF FIRM Banking

Market Segmentation Examples

Demographic segmentation Benefit segmentation

SEGMENTATION BASE POSSIBLE MARKET SEGMENTS Young couples, young families, older families, pre-retirement, retired Highly social, workoriented, safety contact, status symbol Single households, dietconscious, family dining, parties, budgetconscious, variety seekers

Mobile phone carriers Frozen food manufacturers

A broad mix is used here: Demographic segmentation Psychographic segmentation Behavioral segmentation

Toothpaste

Benefit segmentation

Teeth whitening, sensitive teeth, fresh breath, cavity

Segmentation approaches
Depends on number of bases (factors) applied:

Single-stage segmentation (one base).

Two-stage segmentation (two bases).

Multi-stage segmentation (three or more bases).

TYPE OF FIRM

SUITABLE SEGMENTATION APPROACH

RATIONALE

Demographics (gender, age) Cosmetics and perfumes firms (such as LOreal) OR Benefit

Cosmetics and perfumes firms could effectively use a variety of segmentation variables. For example, males and females would have different needs, as would younger and older consumers. Benefit segmentation could be used (some possible could include: skin repair, remove wrinkles, glowing skin, acne reduction, attractive look, social status, celebrity identification).

Psychographic Car manufacturer (social class) OR Geographic

Segmenting by social class makes sense for this product category, as cars are often a reflection of a consumers lifestyle and used as a social symbol of success. Geographic segmentation (such as urban versus rural) could also be an effective approach

Criteria for market segmentation

IDENTIFICATION MEASURABILITY ACCESSIBILITY SUBSTANTIALLY STABILITY

Multisegment Marketing

Marriott Courtyard Ritz-Carlton Hotels Marriott Conference Centers Marriott ExecuStay Marriott Vacation Clubs

EXAMPLE: GENERAL MOTORS

EXAMPLE- APPLE

Segmentation Global Markets

Examples

Advantages
Facilitates proper choice of target marketing Higher Profits Facilitates tapping of the market, adapting the offer to the target Stimulating Innovation Makes the marketing effort more efficient and economic:

Sustainable customer relationships in all phases of customer life cycle

Targeted communication Higher market Shares

Targeting Marketing
Target market is a business term meaning the market segment to which a particular good or service is marketed. It is mainly defined by age, gender, geography, socio-economic grouping, or any other combination of demographics. The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing provides a focus to all of your marketing activities. In choosing target market, a firm basically carries out an evaluation of the various segments and selects those segments that are most appropriate to it.

Process of choosing a target market

Choosing the target market is related to, but not synonymous with, market segmentation. Segmentation is the means or the tool; choosing the target market is the purpose. Segmentation can also be viewed as the prelude to target market selection. Choosing the target market usually follows multilevel segmentation using different bases. Choosing the target market involves several other tasks in addition to segmentation. Looking at each segment as a distinct marketing opportunity

 Evaluating the worth of each segment (sales/profit potential).

Evaluating whether the segment is:

Distinguishable. Measurable. Sizable. Accessible.

Growing.
Profitable. Compatible with the firms resources. Examining whether it is better to choose the whole market, or the only a few segment, and deciding which ones should be chosen.

Looking for segments, which are relatively less satisfied by the current offers in the market from competing brands.
Checking out if the firm has the differential advantage / distinctive capability for serving the selected segments. Evaluating the firms resources and checking whether it is possible to put in the marketing programmes required for capturing the spotted segments with those resources.

Finally selecting those segments that are most appropriate for the firm.

FACTORS TO BE CONSIDERED WHILE TARGET MARKET SELECTION

Attractiveness of a Market Segment Suitability of Market Segments to the Firm 1. Whether the firm can offer superior value to the customers in the segment 2. The impact of serving the segment on the firm's image 3. Access to distribution channels required to serve the segment 4. The firm's resources vs. capital investment required to serve the segment

TARGET MARKET STRATEGIES

Single-segment strategy Selective specialization Product specialization Market specialization Full market coverage

Market Targeting
S1 S2 S3

P1

P2

Single Segment Concentration

P3

P = Products S = Market Segment

Market Targeting
S1 S2 S3

P1

P2

Selective Specialization

P3

P = Products S = Market Segment

Market Targeting
S1 S2 S3

P1

P2

Product Specialization

P3

P = Products S = Market Segment

Market Targeting
S1 S2 S3

P1

P2

Market Specialization

P3

P = Products S = Market Segment

Market Targeting
S1 S2 S3

P1

P2

Full Market Coverage

P3

P = Products S = Market Segment

 DECISIONS INVOLVED IN TARGETING STRATEGY INCLUDE:-

which segments to targeting.

how many products to offer. which products to offer in which segments. TARGETING STRATEGY DECISIONS ARE INFLUENCED BY: Market maturity. Diversity of buyers' needs and preferences. Strength of the competition.

The volume of sales required for profitability.

SEGMENTATION

IMPULSE SEGMENT

For eating then and there

Khaane walo ko khane ka bahana chaiye GIFT SEGMENT Purchased to gift some one

TARGET MARKET

SEGMENTATION
On the basis of Geography -divided Indian market in telecom circles. -Subdivided States into category A, B and C

TARGETING
Earlier elite class above age group of 25 years. Corporate people and business men. Again targeted youth by introducing YOUTOPIA plan. Targeted women and senior citizens by introducing post paid plans.

THANK YOU
(Errors and omissions regretted)