Identifying market segments & targets 08


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Identifying market segments & targets 08

  1. 1. Marketing Management By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha logo copy.tif SUMMARY by Chapter 8 Identifying Market Segments and Targets This chapter deals with one of the quintessential concepts of Marketing: STP i.e. Segmentation, Target and Positioning. It explains different levels of Market Segmentation, bases for Segmenting Consumer Markets, choosing target Markets & finally analyses the various requirement for effective segmentation.Mass Steps in market segmentation, targeting and segmentation, positioningMarketing: 1. Market •Identify bases for segmenting the market IdentifyThe seller engages Segmentation •Develop segment profiles Developin mass •Develop measure of segment attractiveness Develop 2. Target Marketing •Select target segments Selectproduction, massdistribution and •Develop positioning for target segments Develop 3. Market Positioning •Develop a marketing mix for each segment Developmass promotionof one product forall buyers Levels of Market Segmentation: Micromarketing A. Segment marketing Dividing a market into distinct groups with distinct needs, marketing: characteristics, or wants who might require separate products or marketing mixes. Segment Marketing offers key benefits over Mass Marketing as the company can offer better design, price, disclose and also can fine-tune the marketing program to fine better reflect competitors marketing. B. Niche Marketing A niche is a more narrowly defined customer group seeking a Marketing: distinctive mix of benefits. Marketers usually define niches by dividing segments into sub segments. For e.g. Ezee, the liquid detergent from Godrej is a fabric washing egments. product for woolen clothes.
  2. 2. Chapter 8 - Identifying Market Segments and Targets C. Local Marketing: Target marketing that involves marketing programs tailored to the needs and wants of local customer groups in trading areas, neighborhoods and even individual stores is called as Local Marketing. E.g. Many Banks in Kerala have special ‘NRI Branches’ to cater to the needs of customers whose relatives remit money from cater abroad. D. Individual Marketing: This is the ultimate level of marketing that leads to “segments of one”,” customized marketing” or “one one marketing”. Customerization empowers “one-to-one customers to design the product and service offering to their choice. For e.g. Asian design Paints retailers facilitate customers to mix and match colors of their choice from a catalogue. Bases for Segmenting Consumer Markets A. Geographic Segmentation: Division of the Market into different geographical Units such as nations, cities, states, regions, neighborhoods etc • Region: South India, Western Region, North, East • City: Class cities, class-II cities, Metro cities etc Class-I • Rural, urban , semi urban areas B. Demographic Segmentation: The market is divided on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion etc. Demographic variables are easy to measure and are directly associated with customer needs and wants FAMILY LIFE CYCLE STAGES Stage1: Bachelorhood •Single,Focus of expenditure on self Single,Focus Stage2: Honeymooners •Young married couple without kids,focus on building Young home and relation •Full Nest-I,1 child less than 6 yrs old I,1 Stage3: Parenthood •Full Nest-II,youngest child under 6 II,youngest •Full Nest-III: all adult children III: •Children not living with parents Children Stage4:Post Stage4:Post-ParentHood •Empty Nest1 :Working •Empty Nest2: Not Working Empty •One spouse dies Stage5: Solitary Survivor(SS) •SS-I: Working •SS-II: Not Working C. Psychographic Segmentation: Here buyers are divided into different groups on the basis of psychological/personality traits, lifestyles or values. • Lifestyle: Culture-oriented, sports oriented, outdoor oriented. Classification is oriented, done on three parameters: AIO-Activities, Interests and Opinions. Activities, • Personality: Compulsive, gregarious ,authoritarian ,ambitious D. Behavioral segmentation: Buyers are divided on the basis of their knowledge of, attitude toward, use of, or response to a product. The behavioral variables are as follows:
  3. 3. Chapter 8 - Identifying Market Segments and Targets • Usage Rate: Light, Medium, Heavy • Loyalty Status: None, medium, strong, absolute • Readiness Stage: Unaware, aware, informed, interested, desirous, intending to med, buy • Attitude towards Product: Enthusiastic, positive, indifferent, negative, hostile Requirements for Effective Segmentation Evaluating and Selecting Market Segments Five patterns of target market selection that can be followed are: • Single Segment Concentration: Concentrated Marketing where the firm gains a Concentration: strong knowledge of segments needs and acquires a strong market presence • Selective Specialization: a firm selects a number of segments. Each objectively Specialization: attractive and appropriate, there may be little or no synergy between the segme segments • Product Specialization: The firm makes a certain product that it sells to several different market segments. • Market Specialization: The firm concentrates on serving many needs of a particular customer. • Full Market Coverage: The firm attempts to serve all customer groups with all a products they may need. E.g. Coca Cola (non alcoholic beverage segment), Microsoft (non-alcoholic (Software Market) etc. P = Product M = Market