Market segmentation


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Market segmentation

  1. 1. Market Segmentation DESINGED BY Sunil Kumar Research Scholar/ Food Production Faculty Institute of Hotel and Tourism Management, MAHARSHI DAYANAND UNIVERSITY, ROHTAK Haryana- 124001 INDIA Ph. No. 09996000499 email: , linkedin:- facebook: webpage:
  2. 2. A market segment is a sub-set of a market made up of people or organizations with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function. Examples: • Gender • Price • Interests
  3. 3. It starts with NEED! Wants, desires, aspirational, social esteem, security, functional, peer, trendy, ‘mu st-have’, financial, time saving, educational, personal growth, etc.
  4. 4. Four Primary Bases to segment • Geographic Segmentation • Demographic Segmentation • Behavioral Segmentation • Psychographic Segmentation
  5. 5. A true market segment meets all of the following criteria: • it is distinct from other segments (different segments have different needs), • it is homogeneous within the segment (exhibits common needs); • it responds similarly to a market stimulus, and • It can be reached by a market intervention.
  6. 6. Individual Consumers look at.. • Physical Size • Creation of or response to a fad • Geographic location • Time related factors • Demographics/culture/rel igion • Gender • Age • Social status • Education • Avocation • Special Interests • Accessibility • Access • Need for specific information • Need for customization • Need for quality • Degree of a product/service ingredient
  7. 7. Purchase decision influencers • Preference for channel of distribution • Number of decision makers • Financial strength of the prospect • Quantity/volume requirements • Ability to use the offering • Affiliation with other organizations • Commitment required • Brand awareness/users • Attitude toward a personality or enterprise • Attitude toward price versus value • Experience with other products/services • Prospect bias • After sale support expectations
  8. 8. Benefits of Segmentation • Effective use of resources • Gain a focus • Create Value for a target market • Positioning
  9. 9. Steps in Market Segmentation, Targeting, and Positioning Market Segmentation 1. Identify bases for segmenting the market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Positioning 5. Develop positioning for target segments 6. Develop a marketing mix for each segment
  10. 10. Levels of Market Segmentation Through Market Segmentation, Companies Divide Large, Heterogeneous Markets into Smaller Segments that Can be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs. Mass Marketing Same product to all consumers (no segmentation, i. e. a commodity) Segment Marketing Different products to one or more segments (some segmentation, i.e. Marriott)
  11. 11. • Size, purchasing power, profiles of segments can be measured. • Segments can be effectively reached and served. • Segments are large or profitable enough to serve. Measurable Accessible Substantial Actionable • Effective programs can be designed to attract and serve the segments. Requirements for effective segmentation
  12. 12. Choosing a market-coverage strategy • Company resources • Degree of product homogeneity • Market homogeneity • Competitors’ strategies
  13. 13. • Product’s Position - the way the product is defined 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 Positioning for Competitive Advantage
  14. 14. Positioning Strategies • Positioning by specific product attributes • Positioning by benefits • Positioning for user category • Positioning for usage occasion • Positioning against another competitors • Positioning against another product class
  15. 15. • 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 Chosen Position. Steps to Choosing and Implementing a Positioning Strategy
  16. 16. Product Differentiation • Physical attributes • Service differentiation • Personnel differentiation • Location • Image differentiation
  17. 17. Positioning map of service level versus price. Source: Lovelock, Services Marketing, Prentice Hall Perceptual Map
  18. 18. Exercise • Make four teams. One traveling for business, another travelling to attend the wedding of a friend, the third travelling for a vacation and the fourth to start a new factory. • Group A is expected to stay for only a night. • Group B for 3 nights. First day sangeet, then marriage and third day reception. • Group C is expected to stay for 5 nights. The vacation is at a beach or in the hills, the group can decide! • Group D is expected to stay for a month. The group will start the factory and then come back. • Each group is now invited to make a list of services / products that the group might need from the hotel it stays in.
  19. 19. Hotels based on Market Segmentation • Commercial hotels • Leisure Hotels • Airport hotels • All-suite hotels • Extended stay • Residential • B&B /Motels • Casino Hotels • Convention Hotels / Centers
  20. 20. IHG Segments Market segment The Group’s brands Description Customer segment Luxury — Hotels with the highest level of amenities, often boutiques or small chains with top-class facilities and services and very high room rates. A mix of business and leisure, dependent on location, often with a high proportion of international guests. Upper Upscale InterContinental Well-appointed hotels with full, high- quality, amenities including spacious rooms and bathrooms. High room rates. Usually located in prime city- centre locations in major cities or in resorts. Predominantly business often with a high proportion of international guests.
  21. 21. IHG Segments Market segment The Group’s brands Description Customer segment Upscale Crowne Plaza Staybridge Suites Hotel Indigo High-quality, mostly full-service hotels with moderate to high room rates. Less luxurious than upper upscale and sometimes lacking some of the facilities such as a concierge. Predominantly business in urban locations but also appealing to the leisure guest; less international than upper upscale but can still have a significant international guest base. Midscale (full service) Holiday Inn Holiday Inn Select Holiday Inn SunSpree Full service but with fewer amenities than upscale. Comparatively lower room rates than upscale Predominantly domestic guests, both business and leisure.
  22. 22. IHG Segments Market segment The Group’s brands Description Customer segment Midscale (limited service) Express by Holiday Inn (in EMEA and Asia Pacific) Holiday Inn Express (in the Americas) Candlewood Suites Reduced food and beverage, bar and meeting facilities but similar quality room product to full service midscale. Broadly comparable room rates with midscale (full service). Predominantly domestic guests, both business and leisure. Economy/ Budget __ Cheapest most basic hotels with limited facilities Predominantly domestic guests.
  23. 23. Market Segments used in Hotels • Corporate – A/B/C • Leisure • Conferences / Events • Travel Agent • Airlines/Cruise/Crew • Long Stayers • Complimentary
  24. 24. Basics of Marketing • Ps – Product – Price – Place – Promotion • Extended Ps – People – Process – Physical Evidence
  25. 25. Questions