Instructor:
Dr. Ravi Shanker
Objectives
Define market
Market segmentation
Marketing mixes to target
markets
Marketing strategies
Market segment selection
considerations
Segmentation variables
Positioning strategy
Possible Strategies for Target
Marketing
Custom Marketing: “To each his/her own.”
STP IS THE HEART OF MODERN
STRATEGIC MARKETING
EVOLUTION OF STP MARKETING
MASS : EMPHASIS ON MASS PRODUCTION
MARKETING MASS DISTRIBUTION &
PROMOTION OF ONE PRODUCT TO
ALL BUYERS.
PRODUCT : PRODUCING SEVERAL PRODUCTS
VARIETY TO OFFER VARIETY RATHER THAN
MARKETING TO APPEAL TO DIFFERENT
SEGMENTS
TARGET : PRODUCTS & MKTG. PROGRAMS
MARKETING TAILERED TO EACH SELECTED
SEGMENT.
Differentiated Markets
Individuals
Gps of Individuals
Niche
Segments
Mass market
Custom Marketing
One-to-one marketing
Uses data based-
marketing and
information technology
For example...
Ability
Willingness
Resources
Market Boundaries
Customers
Customers
Who are your
own
customers?
Who uses the
Users
Users category
of products?
Prospects
Individuals in
Prospects
the market who
are not your
customers.
MARKET SEGMENTATION
DIVIDING A MARKET INTO DISTINCT
GROUPS OF BUYERS WHO MIGHT REQUIRE
SEPARATE PRODUCTS OR MARKETING
MIXES
Geography
Geography Age
Age
Race
Race and
and
Ethnicity Gender
Gender
Ethnicity
Social
Social Class
Class Family
Family Structure
Structure
and
and Income
Income
Geographic Segmentation
Divide markets into different geographic
units.
Examples:
World Region or Country: North America, Western
Europe, European Union, Pacific Rim, Mexico, etc.
Country Region: Pacific, Mountain, East Coast, etc.
City or Metro Size: New York, San Francisco
Population Density: rural, suburban, urban
Climate: northern, southern, tropical, semi-tropical
Demographic Segmentation
Use Differences in:
age, gender, family size, family life cycle,
income, occupation, education, race, and
religion
Benefits Sought
Different segments Usage Rate
desire different Light, medium, heavy.
benefits from the
same products.
Loyalty Status Segmentation
Hard-core
Split loyals
Shifting loyals
Switchers
User & Loyalty Status Segmentation
MBA DEGREE BENEFIT SEG.
Quality Seeker
Specialty Seeker
Career Seeker
Knowledge Seeker
Status Seeker
Degree Seeker
Professional Advancers Seeker
Avoiders Seeker
Convenience Seeker
Essential Prerequisite for Market
Segmentation:
PROFILING
For example:
Pathfinders study on
Indian House Wife
Roper Starch
Worldwide (RSW)
study
Etc.
Roper Starch Worldwide (RSW)
Six Global
Strivers: Consumer
Place more Segments
emphasis on material &
professional goals
Devouts: Tradition and duty are very important.
Altruist: Interested in social issues & social
welfare.
Intimates: Value close personal & family
relationships.
Fun seekers: High consumptions of restaurants,
bars clubs, movies.
Creatives: Strong interests in education,
knowledge, technology, information.
Segment Viability
Characteristics of segment viability:
Size: Must be large enough to generate
volume for adequate profit.
Identity: Should have unique
characteristics that can be identified.
Relevance: Must be relevant to the
important characteristics of the product.
Access: Must be able to be reached.
REQUIREMENTS FOR EFFECTIVE SEGMENTATION
MEASURABLE The segment should lead themselves
to some form of estimation of
Size, purchasing power, profile
SUBSTANTIAL The segment should be substantial
and worthwhile (profitable)
cultivating them.
ACCESSIBLE The segment should be within reach
and to be served (through
distribution & communication.
DIFFERENTIAB Conceptually distinguishable &
LE respond differently to different Mktg.
Mix elements.
ACTIONABLE Effective programmes can be
formulated for attracting & serving
Choosing Market Segments
We need a YES
response to each of
Distinguishing/stable these!
characteristic
Significant size
Accessible with
Distribution &
promotion
Responsive (similar
needs)
Measurable potential
SELECTION
Geo location and Scale
Size
Stage of industry Life Cycle
Buying history
Profitability
Risk
Aspirations
Rate of growth
Sensitivity / vulnerability
Capitalization
ROI
HOW SHOULD A FIRM SELECT ITS SEGMENTS
Co. Thrust
Size & Growth
Potential
Investment needs
Profitability
Risk
Competition
Segment durability
Segment Mobility
Segment Visibility
Segment Reachability
TARGETING
Factors in evaluating different market
segments:
I) Segment size & growth
II) Segment structural attractiveness:
(To study the impact on long term
profitability of: industry
competitors, potential entrants,
substituttes, buyers, suppliers.)
Iii) co’s own objectives & resources:
Positioning
Segmentation:
grouping of people
by needs or wants
Positioning:
how a product is
geared to attract
this market segment
Positioning
Importance
Distinctiveness
Communicability
Superiority
Affordability
Profitability
POSITIONING STRATEGIES
CONSUMER FOCUS COMPETITION
FOCUS
Under Positioning
Over Positioning
Confused Positioning
( I am not clear what you stand for)
Doubtful Positioning
(I don’t believe what you say about yourself)
Sources of Competitive Turbulence