THARAKA DIAS  MBA(USA), BBA(USA), Dip in Mgt, ACIM(UK),FAEA(Dip in AEA-UK), FinstSMM(UK), CPM(Asia),                   MSLIM
AOT - www.tharakadias.com   2
HLL expands Pears soap to kids               segment Himalaya Herbal Healthcare serves a   growing niche market(FMHG)     ...
Soft drink preferences—some segmentation           preferences—                  variables Preferred taste: Cola, lime, no...
When you have completed this lesson youwill be able to; Summarise the relationship between market segmentation, targeting ...
Segmentation is the process of classifying customers intogroups which share some common characteristicTargeting involves t...
A market is a set of all actual and potential buyersA target market is a group of people toward whom a firmmarkets its goo...
1.   The process of breaking up a homogeneous market into     heterogeneous segments forces the marketer to analyse     an...
Measurable                       • Size, purchasing power, profiles                                  of segments can be me...
6. Develop Marketing                            Mix for Each Target Segment           Market                    5. Develop...
Mass Marketing                              Same product to all consumers                                    (no segmentat...
Geographic  regions or cities           Demographic            Age, gender, family size            and life cycle,    or  ...
Personal                             Demographics        Characteristics                                   Bases          ...
Segmentation by customer size or geographic locationFour segments of business customers  Programmed buyers  Relationship b...
Industrial Markets                                                             Political/Geographic                       ...
Linking the Concepts • Using the segmentation bases you’ve just heard  about, segment the loca clothing market.      >Desc...
Segment Size and Growth Analyze sales, growth rates and expected profitability for various segments.Segment Structural Att...
Company  Marketing                                    Market    Mix              A. Undifferentiated Marketing  CompanyMar...
CompanyResources             Product            Variability                        Product’s Life-Cycle                   ...
Linking the Concepts• At the last ‘linking the concepts’, you segmented the Iocal  clothing market.   > Now, pick two comp...
Product’s Position - the way the product isdefined by consumers on important attributes -the place the product occupies in...
Product                                      Product           Class                                      Attributes Away ...
Step 1. Identifying Possible Competitive Advantages:Competitive Differentiation.Step 2. Selecting the Right Competitive Ad...
Product                              Service      Areas for Competitive         Differentiation Image                     ...
ImportantProfitable                                          Distinctive                                Criteria          ...
At this stage the company has decided on its positioningstrategy and must now design a marketing mix tosupport this strate...
Reviewing the Concepts• Define the three steps of target marketing: market  segmentation, market targeting, and market  po...
Thank                             youAOT - www.tharakadias.com           28
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  1. 1. THARAKA DIAS MBA(USA), BBA(USA), Dip in Mgt, ACIM(UK),FAEA(Dip in AEA-UK), FinstSMM(UK), CPM(Asia), MSLIM
  2. 2. AOT - www.tharakadias.com 2
  3. 3. HLL expands Pears soap to kids segment Himalaya Herbal Healthcare serves a growing niche market(FMHG) Taiwan women on a ride Titan the worlds slimmest watchAOT - www.tharakadias.com 3
  4. 4. Soft drink preferences—some segmentation preferences— variables Preferred taste: Cola, lime, no taste, natural juice, ice tea Calorie/taste tradeoff: taste more important, some importance of both, will sacrifice taste for low calories Usage occasion: Multi-pack for home; single can/bottle; fountain drink Price sensitivity/brand loyalty: Willingness to pay more for brand AOT - www.tharakadias.com 4
  5. 5. When you have completed this lesson youwill be able to; Summarise the relationship between market segmentation, targeting and positioning Identify and describe the major variables for consumer segmentation Outline how companies select target markets and implement segmentation strategies Show how market segmentation and the marketing mix are interlinked in the positioning strategy AOT - www.tharakadias.com 5
  6. 6. Segmentation is the process of classifying customers intogroups which share some common characteristicTargeting involves the process of evaluating eachsegments attractiveness and selecting one or moresegments to enterPositioning is arranging for a product to occupy a clear,distinctive and desirable place relative to competingproducts in the mind of the consumer AOT - www.tharakadias.com 6
  7. 7. A market is a set of all actual and potential buyersA target market is a group of people toward whom a firmmarkets its goods, services, or ideas with a strategydesigned to satisfy their specific needs and preferences.Any marketing strategy must include a detailed (specific)description of this. AOT - www.tharakadias.com 7
  8. 8. 1. The process of breaking up a homogeneous market into heterogeneous segments forces the marketer to analyse and consider both the needs of the market and the company’s ability to competently serve those needs – thereby making the company better informed about its customers2. Competitor offerings and marketing positioning must also be analysed in this context so the company must consider what its competitive advantages and disadvantages are, helping it to clarify its own positioning strategy3. Limited resources are used to best advantage, targeted at those segments that offer the best potential AOT - www.tharakadias.com 8
  9. 9. Measurable • Size, purchasing power, profiles of segments can be measured.Accessible • Segments can be effectively reached and served.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. AOT - www.tharakadias.com 9
  10. 10. 6. Develop Marketing Mix for Each Target Segment Market 5. Develop Positioning Positioning for Each Target Segment 4. Select Target Segment(s) Market 3. Develop Selection Criteria Targeting 2. Develop Profiles of Resulting Segments Market Segmentation1. Identify Basesfor Segmenting the Market AOT - www.tharakadias.com 10
  11. 11. 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 Individual MarketingTailoring brands/ promotions to local Tailoring products/ programs to customer groups individual customers AOT - www.tharakadias.com 11
  12. 12. Geographic regions or cities Demographic Age, gender, family size and life cycle, or income Psychographic Social class, lifestyle, or personality Behavioural Occasions, benefits sought, user status, AOT - www.tharakadias.com usage rate, loyalty 12
  13. 13. Personal Demographics Characteristics Bases for SegmentingSituational Business Markets Operating Factors Characteristics Purchasing Approaches AOT - www.tharakadias.com 13
  14. 14. Segmentation by customer size or geographic locationFour segments of business customers Programmed buyers Relationship buyers Transaction buyers Bargain hunters AOT - www.tharakadias.com 14
  15. 15. Industrial Markets Political/Geographic Economic Legal Cultural Intermarket AOT - www.tharakadias.com 15
  16. 16. Linking the Concepts • Using the segmentation bases you’ve just heard about, segment the loca clothing market. >Describe each of the major segments and sub segments. AOT - www.tharakadias.com 16
  17. 17. 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.Company Objectives and Resources Company skills & resources relative to the segment(s). Look for Competitive Advantages. AOT - www.tharakadias.com 17
  18. 18. Company Marketing Market Mix A. Undifferentiated Marketing CompanyMarketing Mix 1 Segment 1 Company Segment 2Marketing Mix 2 Company Segment 3Marketing Mix 3 B. Differentiated Marketing Segment 1 Company Marketing Segment 2 Mix Segment 3 AOT - www.tharakadias.com C. Concentrated Marketing 18
  19. 19. CompanyResources Product Variability Product’s Life-Cycle Stage Market Variability Competitors’ Marketing Strategies AOT - www.tharakadias.com 19
  20. 20. Linking the Concepts• At the last ‘linking the concepts’, you segmented the Iocal clothing market. > Now, pick two companies that serve this market and describe their segmentation and targeting strategies. > Can you come up with one that targets many different segments versus another that focuses on only one or a few segments?• How does each company you choose differentiate its marketing offer and image?• How has each done a good job of establishing this differentiation in the minds of targeted consumers? AOT - www.tharakadias.com 20
  21. 21. Product’s Position - the way the product isdefined by consumers on important attributes -the place the product occupies in consumers’minds relative to competing products.Marketers must: Plan positions to give their products the greatest advantage in selected target markets, Design marketing mixes to create these planned positions. AOT - www.tharakadias.com 21
  22. 22. Product Product Class Attributes Away from BenefitsCompetitors G Offered H C A D Against a E B UsageCompetitor F Occasions User Class AOT - www.tharakadias.com 22
  23. 23. Step 1. Identifying Possible Competitive Advantages:Competitive Differentiation.Step 2. Selecting the Right Competitive Advantage:Unique Selling Proposition (USP).Step 3. Communicating and Delivering the ChosenPosition.Step 4. Support the positioning strategy with a uniquemarketing mix AOT - www.tharakadias.com 23
  24. 24. Product Service Areas for Competitive Differentiation Image People AOT - www.tharakadias.com 24
  25. 25. ImportantProfitable Distinctive Criteria for Determining Which DifferencesAffordable to Superior Promote Preemptive Communicable AOT - www.tharakadias.com 25
  26. 26. At this stage the company has decided on its positioningstrategy and must now design a marketing mix tosupport this strategy. The next part of the course looksat ‘Developing the Marketing Mix’ AOT - www.tharakadias.com 26
  27. 27. Reviewing the Concepts• Define the three steps of target marketing: market segmentation, market targeting, and market positioning.• List and discuss the major levels of market segmentation and bases for segmenting consumer and business markets.• Explain how companies identify attractive market segments and choose a market coverage strategy.• Discuss how companies position their products for maximum competitive advantage in the marketplace. AOT - www.tharakadias.com 27
  28. 28. Thank youAOT - www.tharakadias.com 28
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