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The document discusses market segmentation, targeting, and positioning. It outlines the steps as market segmentation, target marketing, and market positioning. It then describes the four levels of market segmentation - segment marketing, niche marketing, local marketing, and individual marketing. The major segmentation variables are identified as geographic, demographic, psychographic, and behavioral. Effective criteria for segmentation are that the segments must be measurable, substantial, accessible, differentiable, and actionable.

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MARKETING MANAGEMENT Identifying Market Segments and Targets Chapter # 8 1
2 Steps in Market Segmentation, Targeting and Positioning Market Segmentation Target Marketing Market Positioning Market Segmentation Dividing a market into smaller groups of buyers with distinct needs, characteristics or behaviors who might require separate products or marketing mixes. The company identifies different ways to segment the market and develop profiles of the resulting market segments. Evaluating each market segment’s attractiveness and selecting one or more of the market segments to enter. Target Marketing Market Positioning Setting the competitive positioning for the product and creating a detailed marketing mix. Use of 4p’s in a way that create better value for the customers and create an unique identity for the company
The starting point for discussing segmentation is Mass Marketing. In Mass Marketing, the seller engages in the mass production, mass distribution and mass promotion for one product for all the buyers. 3 Levels of Market Segmentation
The levels of market segmentations are – 1. Segment Marketing 2. Niche Marketing 3. Local Marketing & 4. Individual Marketing 4 Levels of Market Segmentation
 Segment Marketing A Market Segment consists of a group of customers who share a similar set of needs and wants. Rather than creating the segments, the marketer’s task is to identify them and decide which one(s) to enter. Segment marketing offers key benefits over mass marketing. The company can often better design, price, disclose and deliver the product or service and also can fine tune the marketing program and activities to better reflect competitors’ marketing. 5 Levels of Market Segmentation
6 Flexible Marketing Offerings • Naked solution –Product and service elements that all segment members value • Discretionary options – Some segment members value – Options may carry additional charges Levels of Market Segmentation
We can characterize market segments in different ways…One way is to identify preference segments. Three different patterns can emerge.  Homogeneous preferences  Diffused preferences  Clustered preferences 7 Levels of Market Segmentation
8 Homogeneous Preferences Consumers have roughly the same preference. The market shows no natural segments. Diffused Preferences Consumer preferences may be scattered, indicating that consumers vary greatly in their preferences. Clustered Preference Result when natural market segments emerge from groups of consumers with shared preference. Levels of Market Segmentation
 Niche Marketing: A niche is a more narrowly defined group seeking a distinctive mix of benefits. Marketers usually identify niches by dividing a segment into sub-segments.  Archies and Hallmark Cards  Rolls Royce Cars  Nokia Bengla Version cell phone for village people.  Crack – an ointment from Paras Pharmaceuticals  Itchguard - focuses on the niche requirement of treating the itching sensation caused by perspiration during summer. 9 Levels of Market Segmentation
10  Local Marketing: Target marketing is leading to marketing programs tailored to the needs and wants of local customer groups in trading areas, neighborhoods, even individual stores. e.g., Local Newspapers Banks specializing in NRB Branches – people living abroad sending remittance to their villages. Hollywood movies are dubbed in many local languages. Levels of Market Segmentation
11  Individual Marketing: The ultimate level of segmentation leads to “segments of one”, “customized marketing” or “one-to-one marketing”. Tailoring products and programs to the needs of individual customers. e.g., Paint companies such as Berger Paints offer Berger Color Bank and follow the mass- customization strategy in paint retailing. Levels of Market Segmentation
The major segmentation variables are:  Geographic Segmentation  Demographic Segmentation  Psychographic Segmentation  Behavioral Segmentation 12 Bases for Segmenting Consumer Markets
 Geographic Segmentation Geographic segmentation calls for dividing the market into different geographical units. Such as – nations, regions, countries, cities, or neighborhoods. Many companies today are localizing their products, advertising, promotion and sales efforts to fit the needs of individuals, regions, cities and even neighborhood. 13 Bases for Segmenting Consumer Markets
 Geographic Segmentation 14 Bases for Segmenting Consumer Markets SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES GEOGRAPHIC SEGMENTATION Region Southeast, Hill Tracks, North Bengal, Sundarbans City Size Major Metropolitan Areas, Small Towns, Cities Density of Area Urban, Suburban, Exurban, Rural Climate Temperate, Hot, Humid, Rainy
 Demographic Segmentation Market can be divided into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality and social class. One reason demographic variables are so popular with marketers is that they’re often associated with consumer needs, wants product and brand preferences are often associated with demographic variables. 15 Bases for Segmenting Consumer Markets
 Demographic Segmentation 16 SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES DEMOGRAPHIC SEGMENTATION Age Under 6 yrs, 6-11 years, 12-19, 20-34, 35-49, 50-60, 60+ years Gender Male, Female Marital Status Single, Married, Divorced, Widowed Family Life Cycle Bachelorhood, honeymooners, parenthood, post-parenthood and dissolution Income Under Tk. 10,000, Tk 10,000- Tk. 25,000, Tk. 25,000- Tk. 50,000, Tk. 50,000- Tk. 75,000, Tk. 75,000- Tk.100,000, Tk. 100,000 and over Education Illiterate, Primary School, High School, College, University, Graduate Studies Occupation Unskilled worker, skilled workers, shop owners, businessman/ industrialist, self employed, Professional, Blue-collar, White- collar, Agricultural, Military, Daily Laborers Bases for Segmenting Consumer Markets
 Psychographic Segmentation Divides buyers into different groups based on psychological/personality traits, lifestyle or values. People within the same demographic group can exhibit very different psychographic profiles. Values and lifestyles significantly affect product and brand choice of consumers. Religion has a significant influence on values and lifestyles. The strict norms that consumers follow with respect to food habits or even dress codes are representative examples in this regard One of the most popular psychographic segmentation is VALS (Values, Attitude & Lifestyle Survey) framework offered by SRI Consulting Business Intelligence [now named as Strategic Business Insights (SBI)] 17 Bases for Segmenting Consumer Markets
The VALS Segmentation System 18 Primary Motivation High Resources High Innovation Low Resources Low Innovation Ideals Achievement Self-Expression  Those primarily motivated by Ideals are guided by knowledge & principles.  Those motivated by Achievement look for products and services that demonstrate success to their peers.  Consumers whose motivation is Self-Expression desire social or physical activity, variety and risks.
 Psychographic Segmentation 19  The major groups with higher resources are –  Innovators Successful, sophisticated & active, “take – charge” people. Normally purchases relatively upscale , niche-oriented products & services.  Thinkers Mature, satisfied & reflective people who are motivated by ideals & value order, knowledge, and responsibility. Prefers durability, functionality and value in products.  Achievers Successful goal-oriented people who focuses on career & family. Prefers premium products that demonstrates success to their peers.  Experiencers Young, enthusiastic people who seek variety & excitement. Spend comparably high proportion of income for fashion, entertainment & socializing. Bases for Segmenting Consumer Markets
 Psychographic Segmentation 20  The major groups with lower resources are –  Believers Conservative, conventional & traditional people. Normally favor relatively familiar products & loyal to established brands.  Strivers Trendy & fun loving people with resource constrains. Purchase those products that emulate purchases of those with greater material wealth.  Makers Practical, self efficient people who like to work with their hands. Prefers products with a practical & functional purpose.  Survivors Elderly passive people who are concerned about change. Loyal to their favorite brands. Bases for Segmenting Consumer Markets
 Psychographic Segmentation 21 Bases for Segmenting Consumer Markets SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES PSYCHOGRAPHIC SEGMENTATION Lifestyle Culture oriented, Sports oriented, outdoor oriented Personality Compulsive (Irrational/ Uncontrollable), Gregarious (Sociable), Authoritarian (Strict/ Rigid/Reserve), Ambitious (Determined)
 Behavioral Segmentation Buyers are divided into groups on the basis of their knowledge of, attitude toward, use of or response to a product. 22 Behavioral Variables  Occasions  Benefits  User Status  Usage Rate  Buyer-Readiness  Loyalty Status  Attitude Bases for Segmenting Consumer Markets
 Behavioral Segmentation 23 Bases for Segmenting Consumer Markets SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES BEHAVIORAL SEGMENTATION Occasions Regular, Special Benefits Quality, Service, Economy, Speed User Status Nonuser, Ex-user, Potential User, First Time, Regular Users Usage Rate Heavy users, Medium Users, Light Users Loyalty Status None, Medium, Strong, Absolute Readiness Stage Unaware, Aware, Informed, Interested, Desirous, Intending to Buy Attitude toward product Enthusiastic, Positive, Indifferent, Negative, Hostile
24 Behavioral Variables  Occasions Dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase or use the purchased item. Example: Greeting card brands such as Archies and Hallmark make cards for different occasions such as Birthdays, Weddings, Anniversaries, Eid, Puja, Christmas. Biscuits are used as an accompaniment with tea or coffee in the evenings. Bases for Segmenting Consumer Markets
25 Behavioral Variables  Benefits Buyers can be classified according to the benefits they seek. Many product categories offer different products targeted at people who seek different sets of benefits. Example: Shampoos for example offer benefits such as basic cleaning of hair, conditioning effects, medicinal properties and suitability to hair types. Brands such as Clinic, Sunsilk, Pantene, Head & Shoulders offer different variants addressed to diverse benefit segments. Bases for Segmenting Consumer Markets
26 Behavioral Variables  User Status Market can be segmented into nonusers, ex-users, potential users, first time users and regular users of a product. Example: Blood banks cannot rely only on regular donors to supply blood; they must also recruit new first time donors and contact ex-donors, each with a different marketing strategy. The key to attracting potential users or even possibly nonusers, is understanding the reasons they are not using. Bases for Segmenting Consumer Markets
27 Behavioral Variables  Usage Rate Markets can also be segmented into light, medium and heavy product users. Heavy users are often a small percentage of the market but account for a high percentage of total consumption. Example: In the mobile phone service market, heavy users account for a significant proportion of the revenue earned by the service providers. Therefore, mobile service providers target this segment by giving special packages or offers to retain their patronage. Bases for Segmenting Consumer Markets
28 Behavioral Variables  Buyer- Readiness Stage A market consists of people in different stages of readiness to buy a product. Some are unaware of the product, some are aware, some are informed, some are interested, some desire the product and some intend to buy. The relative numbers make a big difference in designing the marketing program. Bases for Segmenting Consumer Markets
29 Behavioral Variables  Loyalty Status A market can be segmented by consumer loyalty. Consumers can be loyal to brands (COKE), stores (Agora), companies (Unilever), Cars (TOYOTA). Buyers can be divided into four groups according to brand loyalty status:  Hard-core Loyals  Split Loyals  Shifting Loyals  Switchers Bases for Segmenting Consumer Markets
30 Behavioral Variables  Loyalty Status  Hard-core Loyals – Consumers who buy only one brand all the time. They are the people who never changes the brand at any cost. Extremely brand loyal consumers. Example: Village Farmers go for Lifebuoy Soap, Gillette shaving kits, Johnson & Johnson Baby Products, Bata Shoes, etc. Bases for Segmenting Consumer Markets
31 Behavioral Variables  Loyalty Status  Split Loyals– Consumers who are loyal to two or three brands. Sometimes the consumers split their choice for different types of products though the same brand has different products. Example: Refrigerator – Samsung, TV – Sony, Microwave – LG, etc --- But Samsung has all the three products Bases for Segmenting Consumer Markets
32 Behavioral Variables  Loyalty Status  Shifting Loyals – Consumers who shift loyalty from one brand to another. Sometimes the post purchase experience can force the consumer to shift the brand. Example: When Melamine was found in Nido, many consumers shifted their brand to Dano. Bases for Segmenting Consumer Markets
33 Behavioral Variables  Loyalty Status  Switchers – Consumers who show no loyalty to any brand. These consumers are frequent switchers, they are not brand loyal. Example: Various mobile Sim card in pocket. Bases for Segmenting Consumer Markets
34 Behavioral Variables  Loyalty Status A company can learn a great deal by analyzing the degrees of brand loyalty: 1. By studying its hard-core loyals, the company can identify its products’ strengths. 2. By studying its split loyals, the company can pinpoint which brands are most competitive with its own. 3. By looking at customers who are shifting away from its brand, the company can learn its marketing weaknesses and attempt to correct them. Bases for Segmenting Consumer Markets
35 Behavioral Variables  Attitude Five attitude groups can be found in a market: enthusiastic, positive, indifferent, negative and hostile. Example: Door-to-door workers in a political campaign use voter attitude to determine how much time to spend with that voter. They thank enthusiastic voters and remind them to vote; they reinforce those who are positively disposed; they try to win the votes of indifferent voters and they spend no time trying to change the attitudes of negative and hostile voters. Bases for Segmenting Consumer Markets
36 Market Targeting Effective Segmentation Criteria There are many ways to segment the market, but not all segmentations are effective. To be useful, market segments must be:  Measurable  Substantial  Accessible  Differentiable  Actionable
37 Effective Segmentation Criteria  Measurable For example, the size, purchasing power and characteristics of the segments needs to be measured. Certain segmentation variables are sometimes difficult to measure. If you are taking Income, Demography, etc. as variables then it needs to be measurable.
38 Effective Segmentation Criteria  Substantial The market segments are large or profitable enough to serve. A segment should be the largest possible homogeneous group worth pursuing with a tailored marketing program. Some segments have one or few customers but the marketers can sell huge volume of their products to these customers. For example: Tomato Ketchup goes to different fast food shops such as Pizza Hut, KFC, Helvetia, etc. in huge volume rather than individual customers.
39 Effective Segmentation Criteria  Accessible Market segments needs to be effectively reached and served. For example: Like in Cantonment, the businessmen needs to take special permission from the defense authority to do business, therefore in order to segment such markets, the marketers must make special arrangement so that the segments can be reached and served.
40 Effective Segmentation Criteria  Differentiable The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. For example: Married and Unmarried women can respond differently to different products such as dress materials, cosmetics, household products, etc. Again Consumption of Students and Executives are quiet different.
41 Effective Segmentation Criteria  Actionable Effective programs can be designed for attracting and serving the segments. For example: Cigarette manufacturers cannot promote their product directly through the different medias (TV Commercials, Newspaper Advertisements), therefore they have to take different action to promote their product.
42 Market Coverage Alternatives
43 Market Coverage Alternatives Undifferentiated Marketing targets the whole market with one standard offer. • Mass marketing • Focuses on common needs rather than what’s different • Relying on mass distribution and advertising
44 Market Coverage Alternatives Differentiated Marketing targets several different market segments and designs separate offers for each. • Goal is to achieve higher sales and stronger position in the market • Developing separate marketing mix (product, price, place & promotion) strategies for each segment • More expensive than undifferentiated marketing
45 Market Coverage Alternatives Concentrated Marketing targets a small share of a large market those who deals with • Expertise about the product or services • Sometimes limited company resources • Knowledge of the market • More effective and efficient marketing tools
46 Market Coverage Alternatives Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations • Local marketing (HSBC - Amanna) • Individual marketing (Tailor’s shop)
47 Market Coverage Alternatives A UNDIFFERENTIATED MARKETING Company Marketing Mix Market B DIFFERENTIATED MARKETING Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3 Segment 1 Segment 2 Segment 3 C CONCENTRATED MARKETING Company Marketing Mix Segment 1 Segment 2 Segment 3
48 END OF CHAPTER 8

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MM(UBBA)- C 8.ppt

  • 1. MARKETING MANAGEMENT Identifying Market Segments and Targets Chapter # 8 1
  • 2. 2 Steps in Market Segmentation, Targeting and Positioning Market Segmentation Target Marketing Market Positioning Market Segmentation Dividing a market into smaller groups of buyers with distinct needs, characteristics or behaviors who might require separate products or marketing mixes. The company identifies different ways to segment the market and develop profiles of the resulting market segments. Evaluating each market segment’s attractiveness and selecting one or more of the market segments to enter. Target Marketing Market Positioning Setting the competitive positioning for the product and creating a detailed marketing mix. Use of 4p’s in a way that create better value for the customers and create an unique identity for the company
  • 3. The starting point for discussing segmentation is Mass Marketing. In Mass Marketing, the seller engages in the mass production, mass distribution and mass promotion for one product for all the buyers. 3 Levels of Market Segmentation
  • 4. The levels of market segmentations are – 1. Segment Marketing 2. Niche Marketing 3. Local Marketing & 4. Individual Marketing 4 Levels of Market Segmentation
  • 5.  Segment Marketing A Market Segment consists of a group of customers who share a similar set of needs and wants. Rather than creating the segments, the marketer’s task is to identify them and decide which one(s) to enter. Segment marketing offers key benefits over mass marketing. The company can often better design, price, disclose and deliver the product or service and also can fine tune the marketing program and activities to better reflect competitors’ marketing. 5 Levels of Market Segmentation
  • 6. 6 Flexible Marketing Offerings • Naked solution –Product and service elements that all segment members value • Discretionary options – Some segment members value – Options may carry additional charges Levels of Market Segmentation
  • 7. We can characterize market segments in different ways…One way is to identify preference segments. Three different patterns can emerge.  Homogeneous preferences  Diffused preferences  Clustered preferences 7 Levels of Market Segmentation
  • 8. 8 Homogeneous Preferences Consumers have roughly the same preference. The market shows no natural segments. Diffused Preferences Consumer preferences may be scattered, indicating that consumers vary greatly in their preferences. Clustered Preference Result when natural market segments emerge from groups of consumers with shared preference. Levels of Market Segmentation
  • 9.  Niche Marketing: A niche is a more narrowly defined group seeking a distinctive mix of benefits. Marketers usually identify niches by dividing a segment into sub-segments.  Archies and Hallmark Cards  Rolls Royce Cars  Nokia Bengla Version cell phone for village people.  Crack – an ointment from Paras Pharmaceuticals  Itchguard - focuses on the niche requirement of treating the itching sensation caused by perspiration during summer. 9 Levels of Market Segmentation
  • 10. 10  Local Marketing: Target marketing is leading to marketing programs tailored to the needs and wants of local customer groups in trading areas, neighborhoods, even individual stores. e.g., Local Newspapers Banks specializing in NRB Branches – people living abroad sending remittance to their villages. Hollywood movies are dubbed in many local languages. Levels of Market Segmentation
  • 11. 11  Individual Marketing: The ultimate level of segmentation leads to “segments of one”, “customized marketing” or “one-to-one marketing”. Tailoring products and programs to the needs of individual customers. e.g., Paint companies such as Berger Paints offer Berger Color Bank and follow the mass- customization strategy in paint retailing. Levels of Market Segmentation
  • 12. The major segmentation variables are:  Geographic Segmentation  Demographic Segmentation  Psychographic Segmentation  Behavioral Segmentation 12 Bases for Segmenting Consumer Markets
  • 13.  Geographic Segmentation Geographic segmentation calls for dividing the market into different geographical units. Such as – nations, regions, countries, cities, or neighborhoods. Many companies today are localizing their products, advertising, promotion and sales efforts to fit the needs of individuals, regions, cities and even neighborhood. 13 Bases for Segmenting Consumer Markets
  • 14.  Geographic Segmentation 14 Bases for Segmenting Consumer Markets SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES GEOGRAPHIC SEGMENTATION Region Southeast, Hill Tracks, North Bengal, Sundarbans City Size Major Metropolitan Areas, Small Towns, Cities Density of Area Urban, Suburban, Exurban, Rural Climate Temperate, Hot, Humid, Rainy
  • 15.  Demographic Segmentation Market can be divided into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality and social class. One reason demographic variables are so popular with marketers is that they’re often associated with consumer needs, wants product and brand preferences are often associated with demographic variables. 15 Bases for Segmenting Consumer Markets
  • 16.  Demographic Segmentation 16 SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES DEMOGRAPHIC SEGMENTATION Age Under 6 yrs, 6-11 years, 12-19, 20-34, 35-49, 50-60, 60+ years Gender Male, Female Marital Status Single, Married, Divorced, Widowed Family Life Cycle Bachelorhood, honeymooners, parenthood, post-parenthood and dissolution Income Under Tk. 10,000, Tk 10,000- Tk. 25,000, Tk. 25,000- Tk. 50,000, Tk. 50,000- Tk. 75,000, Tk. 75,000- Tk.100,000, Tk. 100,000 and over Education Illiterate, Primary School, High School, College, University, Graduate Studies Occupation Unskilled worker, skilled workers, shop owners, businessman/ industrialist, self employed, Professional, Blue-collar, White- collar, Agricultural, Military, Daily Laborers Bases for Segmenting Consumer Markets
  • 17.  Psychographic Segmentation Divides buyers into different groups based on psychological/personality traits, lifestyle or values. People within the same demographic group can exhibit very different psychographic profiles. Values and lifestyles significantly affect product and brand choice of consumers. Religion has a significant influence on values and lifestyles. The strict norms that consumers follow with respect to food habits or even dress codes are representative examples in this regard One of the most popular psychographic segmentation is VALS (Values, Attitude & Lifestyle Survey) framework offered by SRI Consulting Business Intelligence [now named as Strategic Business Insights (SBI)] 17 Bases for Segmenting Consumer Markets
  • 18. The VALS Segmentation System 18 Primary Motivation High Resources High Innovation Low Resources Low Innovation Ideals Achievement Self-Expression  Those primarily motivated by Ideals are guided by knowledge & principles.  Those motivated by Achievement look for products and services that demonstrate success to their peers.  Consumers whose motivation is Self-Expression desire social or physical activity, variety and risks.
  • 19.  Psychographic Segmentation 19  The major groups with higher resources are –  Innovators Successful, sophisticated & active, “take – charge” people. Normally purchases relatively upscale , niche-oriented products & services.  Thinkers Mature, satisfied & reflective people who are motivated by ideals & value order, knowledge, and responsibility. Prefers durability, functionality and value in products.  Achievers Successful goal-oriented people who focuses on career & family. Prefers premium products that demonstrates success to their peers.  Experiencers Young, enthusiastic people who seek variety & excitement. Spend comparably high proportion of income for fashion, entertainment & socializing. Bases for Segmenting Consumer Markets
  • 20.  Psychographic Segmentation 20  The major groups with lower resources are –  Believers Conservative, conventional & traditional people. Normally favor relatively familiar products & loyal to established brands.  Strivers Trendy & fun loving people with resource constrains. Purchase those products that emulate purchases of those with greater material wealth.  Makers Practical, self efficient people who like to work with their hands. Prefers products with a practical & functional purpose.  Survivors Elderly passive people who are concerned about change. Loyal to their favorite brands. Bases for Segmenting Consumer Markets
  • 21.  Psychographic Segmentation 21 Bases for Segmenting Consumer Markets SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES PSYCHOGRAPHIC SEGMENTATION Lifestyle Culture oriented, Sports oriented, outdoor oriented Personality Compulsive (Irrational/ Uncontrollable), Gregarious (Sociable), Authoritarian (Strict/ Rigid/Reserve), Ambitious (Determined)
  • 22.  Behavioral Segmentation Buyers are divided into groups on the basis of their knowledge of, attitude toward, use of or response to a product. 22 Behavioral Variables  Occasions  Benefits  User Status  Usage Rate  Buyer-Readiness  Loyalty Status  Attitude Bases for Segmenting Consumer Markets
  • 23.  Behavioral Segmentation 23 Bases for Segmenting Consumer Markets SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES BEHAVIORAL SEGMENTATION Occasions Regular, Special Benefits Quality, Service, Economy, Speed User Status Nonuser, Ex-user, Potential User, First Time, Regular Users Usage Rate Heavy users, Medium Users, Light Users Loyalty Status None, Medium, Strong, Absolute Readiness Stage Unaware, Aware, Informed, Interested, Desirous, Intending to Buy Attitude toward product Enthusiastic, Positive, Indifferent, Negative, Hostile
  • 24. 24 Behavioral Variables  Occasions Dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase or use the purchased item. Example: Greeting card brands such as Archies and Hallmark make cards for different occasions such as Birthdays, Weddings, Anniversaries, Eid, Puja, Christmas. Biscuits are used as an accompaniment with tea or coffee in the evenings. Bases for Segmenting Consumer Markets
  • 25. 25 Behavioral Variables  Benefits Buyers can be classified according to the benefits they seek. Many product categories offer different products targeted at people who seek different sets of benefits. Example: Shampoos for example offer benefits such as basic cleaning of hair, conditioning effects, medicinal properties and suitability to hair types. Brands such as Clinic, Sunsilk, Pantene, Head & Shoulders offer different variants addressed to diverse benefit segments. Bases for Segmenting Consumer Markets
  • 26. 26 Behavioral Variables  User Status Market can be segmented into nonusers, ex-users, potential users, first time users and regular users of a product. Example: Blood banks cannot rely only on regular donors to supply blood; they must also recruit new first time donors and contact ex-donors, each with a different marketing strategy. The key to attracting potential users or even possibly nonusers, is understanding the reasons they are not using. Bases for Segmenting Consumer Markets
  • 27. 27 Behavioral Variables  Usage Rate Markets can also be segmented into light, medium and heavy product users. Heavy users are often a small percentage of the market but account for a high percentage of total consumption. Example: In the mobile phone service market, heavy users account for a significant proportion of the revenue earned by the service providers. Therefore, mobile service providers target this segment by giving special packages or offers to retain their patronage. Bases for Segmenting Consumer Markets
  • 28. 28 Behavioral Variables  Buyer- Readiness Stage A market consists of people in different stages of readiness to buy a product. Some are unaware of the product, some are aware, some are informed, some are interested, some desire the product and some intend to buy. The relative numbers make a big difference in designing the marketing program. Bases for Segmenting Consumer Markets
  • 29. 29 Behavioral Variables  Loyalty Status A market can be segmented by consumer loyalty. Consumers can be loyal to brands (COKE), stores (Agora), companies (Unilever), Cars (TOYOTA). Buyers can be divided into four groups according to brand loyalty status:  Hard-core Loyals  Split Loyals  Shifting Loyals  Switchers Bases for Segmenting Consumer Markets
  • 30. 30 Behavioral Variables  Loyalty Status  Hard-core Loyals – Consumers who buy only one brand all the time. They are the people who never changes the brand at any cost. Extremely brand loyal consumers. Example: Village Farmers go for Lifebuoy Soap, Gillette shaving kits, Johnson & Johnson Baby Products, Bata Shoes, etc. Bases for Segmenting Consumer Markets
  • 31. 31 Behavioral Variables  Loyalty Status  Split Loyals– Consumers who are loyal to two or three brands. Sometimes the consumers split their choice for different types of products though the same brand has different products. Example: Refrigerator – Samsung, TV – Sony, Microwave – LG, etc --- But Samsung has all the three products Bases for Segmenting Consumer Markets
  • 32. 32 Behavioral Variables  Loyalty Status  Shifting Loyals – Consumers who shift loyalty from one brand to another. Sometimes the post purchase experience can force the consumer to shift the brand. Example: When Melamine was found in Nido, many consumers shifted their brand to Dano. Bases for Segmenting Consumer Markets
  • 33. 33 Behavioral Variables  Loyalty Status  Switchers – Consumers who show no loyalty to any brand. These consumers are frequent switchers, they are not brand loyal. Example: Various mobile Sim card in pocket. Bases for Segmenting Consumer Markets
  • 34. 34 Behavioral Variables  Loyalty Status A company can learn a great deal by analyzing the degrees of brand loyalty: 1. By studying its hard-core loyals, the company can identify its products’ strengths. 2. By studying its split loyals, the company can pinpoint which brands are most competitive with its own. 3. By looking at customers who are shifting away from its brand, the company can learn its marketing weaknesses and attempt to correct them. Bases for Segmenting Consumer Markets
  • 35. 35 Behavioral Variables  Attitude Five attitude groups can be found in a market: enthusiastic, positive, indifferent, negative and hostile. Example: Door-to-door workers in a political campaign use voter attitude to determine how much time to spend with that voter. They thank enthusiastic voters and remind them to vote; they reinforce those who are positively disposed; they try to win the votes of indifferent voters and they spend no time trying to change the attitudes of negative and hostile voters. Bases for Segmenting Consumer Markets
  • 36. 36 Market Targeting Effective Segmentation Criteria There are many ways to segment the market, but not all segmentations are effective. To be useful, market segments must be:  Measurable  Substantial  Accessible  Differentiable  Actionable
  • 37. 37 Effective Segmentation Criteria  Measurable For example, the size, purchasing power and characteristics of the segments needs to be measured. Certain segmentation variables are sometimes difficult to measure. If you are taking Income, Demography, etc. as variables then it needs to be measurable.
  • 38. 38 Effective Segmentation Criteria  Substantial The market segments are large or profitable enough to serve. A segment should be the largest possible homogeneous group worth pursuing with a tailored marketing program. Some segments have one or few customers but the marketers can sell huge volume of their products to these customers. For example: Tomato Ketchup goes to different fast food shops such as Pizza Hut, KFC, Helvetia, etc. in huge volume rather than individual customers.
  • 39. 39 Effective Segmentation Criteria  Accessible Market segments needs to be effectively reached and served. For example: Like in Cantonment, the businessmen needs to take special permission from the defense authority to do business, therefore in order to segment such markets, the marketers must make special arrangement so that the segments can be reached and served.
  • 40. 40 Effective Segmentation Criteria  Differentiable The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. For example: Married and Unmarried women can respond differently to different products such as dress materials, cosmetics, household products, etc. Again Consumption of Students and Executives are quiet different.
  • 41. 41 Effective Segmentation Criteria  Actionable Effective programs can be designed for attracting and serving the segments. For example: Cigarette manufacturers cannot promote their product directly through the different medias (TV Commercials, Newspaper Advertisements), therefore they have to take different action to promote their product.
  • 43. 43 Market Coverage Alternatives Undifferentiated Marketing targets the whole market with one standard offer. • Mass marketing • Focuses on common needs rather than what’s different • Relying on mass distribution and advertising
  • 44. 44 Market Coverage Alternatives Differentiated Marketing targets several different market segments and designs separate offers for each. • Goal is to achieve higher sales and stronger position in the market • Developing separate marketing mix (product, price, place & promotion) strategies for each segment • More expensive than undifferentiated marketing
  • 45. 45 Market Coverage Alternatives Concentrated Marketing targets a small share of a large market those who deals with • Expertise about the product or services • Sometimes limited company resources • Knowledge of the market • More effective and efficient marketing tools
  • 46. 46 Market Coverage Alternatives Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations • Local marketing (HSBC - Amanna) • Individual marketing (Tailor’s shop)
  • 47. 47 Market Coverage Alternatives A UNDIFFERENTIATED MARKETING Company Marketing Mix Market B DIFFERENTIATED MARKETING Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3 Segment 1 Segment 2 Segment 3 C CONCENTRATED MARKETING Company Marketing Mix Segment 1 Segment 2 Segment 3