Welcome to Presentation“Market Segmentation – Creating value for target customer”Prepared By-Md. Shahab Uddin (Tipu)
• MARKET SEGMENTATION OBJECTIVES To understand market segmentation and consider why it is used. To examine how companies segment markets. To explore different targeting strategies. To learn about the role and process of positioning in segmentation strategies. To consider how marketers can achieve the most from market segmentation.
An Notated Report Outline: Point 1 - Introduction. Segmentation is the term given to the grouping of customers with similar needs by a number of different variables. Once this has been done, segments can be targeted by a number of targeting strategies. The stage that then follows is known as positioning which is the place that products or services occupy in the marketplace in relation to the competition, as perceived by the target market. Point 2 - The market-segmentation concept. The underlying principle of market segmentation is that individual customers have different product and service needs. Mass marketing, the marketing of a single product to everyone, is rarely a viable strategy, just as it is to customize products to an individual. Point 3 - The market segmentation process. The segmentation process is generally regarded as consisting of three stages; segmentation, targeting, and positioning. Point 4 - Segmentation variables. The first stage of the segmentation process involves the selection of suitable variables for grouping customers. These are also referred to as base variables or the segmentation basis. There is rarely one best way of segmenting a market and more than one variable can be used. There are a number of segmentation variables that can be used for consumer and business-to-business markets.
Point 5 - Segmentation analysis. Research plays an important role in segmentation as segmentation analysis requires a range of data form a wide variety of sources on markets, customers’ attitudes, motives and behavior as well as competitor information. Point 6 - Targeting. Targeting is the next step in the sequential process and involves a business making choices about segment(s) on which resources are to be focused. There are three major targeting strategies: undifferentiated, concentrated, and differentiated. During this process the business must balance its resources and capabilities against the attractiveness of different segments. Point 7 - Positioning. Positioning follows on logically from the segmentation and targeting stages. Customer perceptions are central to the product position especially in relation to the competition’s offering. The product or service has to satisfy key customer requirements and this has to be clearly communicated to customers. Point 8 - Getting the most out of market segmentation. Market segmentation, targeting and positioning are not always easy to apply and problems can arise for a number of reasons. There are a number of steps that can be taken to avoid these problems and, in addition, there are a set of segmentation criteria that can help. Point 9 - Market segmentation: the future. The two key factors that will affect segmentation in the future are competitive and technological forces. In addition, there is a rising trend towards one-to-one marketing.
What is a Market? A set up where two or more parties engage in exchange of goods, services and information is called a market. Ideally a market is a place where two or more parties are involved in buying and selling. The two parties involved in a transaction are called seller and buyer. The seller sells goods and services to the buyer in exchange of money. There has to be more than one buyer and seller for the market to be competitive. What is Segmentation? Market Segmentation Market segmentation is a marketing concept which divides the complete market set up into smaller subsets comprising of consumers with a similar taste, demand and preference. A market segment is a small unit within a large market comprising of like minded individuals. One market segment is totally distinct from the other segment. A market segment comprises of individuals who think on the same lines and have similar interests. The individuals from the same segment respond in a similar way to the fluctuations in the market.
Basis of Market Segmentation: Gender. Age group. Income Marital Status. Occupation.Now we show Two example based on Age group & Level of income. Age Group : Division on the basis of age group of the target audience is also one of the ways of market segmentation.
Age Group :Age Group Product ExampleAge group (0- 10 years) - Toys, Nappies, Baby FoodAge Group (10-20 - Toys, Apparels, Books, Schoolyears) BagsAge group (20 years - Cosmetics, Anti-Ageing Products,and above) Magazines, apparels and so on
Income Group: Marketers divide the consumers into small segments as per their income. Individuals are classified into segments according to their monthly earnings. The three categories are: Income group Product Example High income Group Sunsilk Shampoo 400 ml. Mid Income Group Sunsilk Shampoo 200 ml. Low Income Group Sunsilk Shampoo 50 ml. & Minipack
Types Of market SegmentationPsychographic segmentation• The basis of such segmentation is the lifestyle of the individuals. The individual’s attitude, interest, value help the marketers to classify them into small groups. Demographic Segment : Dividing a market in to groups based on variables such as – age, gender, family size, family life cycle, income , occupation , education, religion, race, & nationality, Geographic Segmentation • Geographic segmentation refers to the classification of market into various geographical areas. A marketer can’t have similar strategies for individuals living at different places. Behavioral Segmentation • The loyalties of the customers towards a particular brand help the marketers to classify them into smaller groups, each group comprising of individuals loyal towards a particular brand.
Steps In Market Segmentation Identify Lower Income The target Group market. Identify the Size of the • Maruti 800, Alto target Expectations of target Market. market. Middle Income Group Review Market Create the Segmentatio • - Wagon behavior. n. Subgroups R, Swift, Swift Dzire, Ritz High Income Review the Group Marketing needs of the • Maruti Suzuki Strategy. target audience. BMW. Name your Market Segment.
Why Target Marketing Why target marketing? (Need of Target Marketing) Organizations can use similar kind of strategies to promote their products within a target market. They can adopt a more focused approach in case of target marketing. They know their customers well and thus can reach out to their target audience in the most effective way. How to create Target Market The organization must first decide who all individuals would fit into a particular segment. A male and a female can’t be kept in the same segment. The first and the foremost step is to decide on the target market. The next step is to identify need and preference of the target market. It is essential to find out what the target market expects from the product. Once the target market is decided, organizations can decide on the various strategies helpful to promote their product.
How to select the Target Market? It is essential for the organizations or marketers to identify the set of people whom they want to target? Marketers must understand the needs and expectations of the individuals to create its target market . To select a target market, it is essential for the organizations to study the following factors: Understand the lifestyle of the consumers Age group of the individuals Income of the consumers Spending capacity of the consumers Education and Profession of the people Gender Mentality and thought process of the consumers Social Status Kind of environment individuals are exposed to Always remember you would never be successful if you try to impress everyone.
. Let us go through the below example: Q: Why do people use soaps ? Some would use it against body Freshness. • Some would use it to fight germs and infections. • Some for a fair and spotless skin. In the above case the product is same but the needs of the individuals are different. Consumers have different reasons as to why they use soaps
If We Analysis Current Target Market of food & Beverages:Let See---- Bangladesh. Health Professionals, OfficGrowing kids Teenagers conscious e People. individuals(Horlicks (Soft drinks Fruit Juice, Complan, Maltov Pepsi, Coke, 7 (Real, Frutika, P Energy Drinks(Reda, Boost) up) ran Mango bull, Horse, Soda, T Juice, Mangoli ) iger, Speed)
Product Positioning Process - Steps in ProductPositioningThe process of creating an image of a product in the minds of the consumers is called as positioning.Positioning helps to create first impression of brands in the minds of target audience. Steps to product Positioning The brand 1. Know your Target Audience Well. “Connecting 2. Identify the product feature . People” 3. Unique Selling Proposition. 4. Know your competitors. 5. Ways to promote brands. 6. Maintain the position of the brand. The brand Unique Selling Proposition Is the most “Ceat Tyre” Important , So let See stands for better grip. How Find out how the products can be useful to the end-users----
Unique Selling Proposition Individuals purchase “Dabur Chyawanprash “to strengthen their body’s internal defense mechanism and fight against germs, infections and stress. That’s the image of Dabur Chyawanprash in the minds Why do people use “Anti Dandruff of consumers. Shampoo?” Anti Dandruff Shampoos are meant to get rid of dandruff. This is how the product is positioned in the minds of the individuals.
Conclusion The underlying principle of market segmentation is that the product and services needs of individual customers differ. Market segmentation involves the grouping of customers together with the aim of better satisfying their needs whilst maintaining economies of scale. It consists of three stages and if properly executed should deliver more satisfy customers, few direct confrontations with competitors, and better designed marketing programmers’.
Referencewww.gogle.com.www.quickmba.comwww.yahoo.comwww.slideclick.com Book Principals of marketing by Philip kotler (12 editions) Marketing Management by kotler, Keller, (12 editions