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Marketing Segmentation PPT

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  1. 1. Market Segmentation<br />
  2. 2. Market Segmentation<br />Market<br />Set of existing and potential customers<br />Market<br />Segment<br />A group of people or organizations sharing one or more characteristics that cause them to have similar product needs/wants.<br />
  3. 3. Market Segmentation<br /> Market Segmentation – is the process of dividing a total market into groups, or segments, consisting of people or organizations with relatively similar product needs/wants. <br />The purpose is to enable a marketer to design a marketing mix (mm) that more precisely matches the needs of customers in the selected market segments.<br />
  4. 4. Consumer Preferences for Ice Cream<br />Homogeneous Pattern<br />Consumers have relatively similar needs and desires for a good or service category.<br />Clustered Pattern<br />Consumer needs and desires can be grouped into two or more identical clusters (segments), each with its own set of purchase criteria. <br />Diffused Pattern<br />Consumer needs and desires are so diverse that no clear clusters (segments) can be identified.<br />
  5. 5. Levels of Market Segmentation<br />Segment marketing<br />Niche marketing*<br />Local marketing<br />Customized/one-to-one/micro marketing<br />A Niche is more narrowly defined customer group seeking a distinctive mix of benefits. Niches are fairly small and normally attract only one or two competitors whereas segments are fairly large and normally attract several competitors. <br />
  6. 6. Market Segmentation<br />
  7. 7. Benefits of Segmentation<br />Effective use of resources<br />Gain a focus<br />Create Value for a target market<br />Positioning<br />
  8. 8. Major Steps in Target Marketing<br /><ul><li>Segmentation
  9. 9. Targeting
  10. 10. Positioning</li></li></ul><li>Bases for Segmenting Consumer Markets<br />
  11. 11. Segmenting Consumer Markets<br />Geographic<br />Region, city, Rural and semi-rural areas<br />Demographic<br />Age, gender, income, occupation, education, family size, Religion, Nationality<br />Psychographic<br />Social class, lifestyle, personality<br />Behavioral<br />Occasions, benefits, user status, usage rate, loyalty status, readiness stage, attitude toward product<br />
  12. 12. Segmenting Consumer Markets<br />Geographic<br />Region <br />South India, Western Region, North, East<br />City<br />Class-I Cities, Class-II Cities, Cities with a population of 0.5 million to 1 Million, Cities with a population of over 1 million<br />Rural and Semi-Urban Areas <br />Rural villages with a population of over 10,000, small towns with a population between 20,000 and 50,000<br />
  13. 13. Segmenting Consumer Markets<br />Demographic<br />Age<br />Under 6, 6-11, 12-19, 20-34, 35-49, 50-60, 60+<br />Family Size<br />Young single; young, married, no children; young, married, youngest child under 6; young, married, youngest child under 6 or over; older, married, no children under 18; older, single<br />Gender<br />Male, Female<br />
  14. 14. Segmenting Consumer Markets<br />Demographic<br />Income<br />Low (upto Rs. 40,000 p.a.), lower middle (Rs. 40,001-80,000 p.a.), middle (Rs. 80,001-1,20,000 p.a.), upper middle (Rs. Rs. 1,20,001-1,60,000 p.a.) and high (above Rs. 1,60,000 p.a.)<br />Annual Household Income Rupees at 1999-2000 Prices<br />Source: Kotler, Keller, Koshy and Jha, 12/e, Pearson, pp.151-209<br />
  15. 15. Segmenting Consumer Markets<br />Demographic<br />Occupation<br />Unskilled worker, skilled worker, petty traders, shop owners, businessman/industrialist, self-employed (professionals), clerical/salespersons, supervisory levels, officers/junior executives, middle/senior executives<br />
  16. 16. Segmenting Consumer Markets<br />Demographic<br />Education<br />Illiterate, school upto 4 years, school between 5 and 9 years, SSC/HSC, nongraduate, graduate/postgraduate (general), graduate/postgraduate (professional)<br />
  17. 17. Segmenting Consumer Markets<br />Psychographic<br />Lifestyle<br />Culture-oriented, sports-oriented, outdoor-oriented<br />Personality<br />Compulsive, gregarious(sociable/outgoing/extrovert), authoritarian, ambitious<br />
  18. 18. Segmenting Consumer Markets<br />Behavioural<br />Occasions<br />Regular, special<br />Benefits<br />Quality, service, economy<br />User status<br />Non-user, ex-user, potential user, first-time user, regular user<br />
  19. 19. Segmenting Consumer Markets<br />Behavioural<br />Usage rate<br />Light, medium, heavy<br />Loyalty status<br />None, medium, strong, absolute<br />Readiness stage<br />Unaware, aware, informed, interested, desirous, intending to buy<br />Attitude toward the product<br />Enthusiastic, positive, indifferent, negative, hostile<br />
  20. 20. Bases for Segmenting Business Markets<br />
  21. 21. Segmenting Business Markets<br />Demographic segmentation<br />Industry, company size, location<br />Operating variables<br />Technology, user or non-user status, customer capabilities<br />Purchasing approaches<br />Purchasing-function organisation, power structure, nature of existing relationships, general purchase policies, purchasing criteria<br />Situational factors<br />Urgency, specific application, size of order<br />Personal characteristics<br />Buyer-seller similarity, attitudes toward risk, loyalty<br />
  22. 22. Market Segmentation Procedure<br />
  23. 23. Market Segmentation Procedure<br />Survey Stage<br />Analysis Stage<br />Profiling Stage<br />
  24. 24. Requirements for Effective Segmentation<br />
  25. 25. Measurable<br />Accessible<br /><ul><li> Size, purchasing power, profiles of segments can be measured. </li></ul>Substantial<br /><ul><li> Segments must be effectively reached and served.
  26. 26. Segments must be large or profitable enough to serve.</li></li></ul><li>Differential<br /><ul><li> Segments must respond differently to different marketing mix elements & actions.</li></ul>Actionable<br /><ul><li> Must be able to attract and serve the segments.</li></li></ul><li>Market Targeting Process<br />
  27. 27. Steps in the Market Targeting Process<br />Evaluating Market Segments<br />Selecting Target Market Segments<br />
  28. 28. Evaluating Market Segments<br />
  29. 29. Evaluating Market Segments<br />Segment Size and Growth<br />Analyze current segment sales, growth rates, and expected profitability.<br />Segment Structural Attractiveness<br />Consider effects of: competitors, existence of substitute products, and the power of buyers & suppliers.<br />Company Objectives and Resources<br />Examine company skills & resources needed to succeed in that segment.<br />Offer superior value and gain advantages over competitors.<br />
  30. 30. Selecting Target Market Segments<br />
  31. 31. Market Coverage Approaches<br />Undifferentiated Marketing(Mass Marketing) The firm tries to reach a wide range of consumers with one basic marketing plan. These consumers are assumed to have a desire for similar goods and service attributes.One product for everybody.<br />Concentrated Marketing The firm concentrates on one group of consumers with a distinct set of needs and uses a tailor-mademarketing plan to attract this single segment. <br />Differentiated Marketing The firm aims at two or more different market segments, each of which has a distinct set of needs, and offers a tailor-made marketing plan for each segment. Two or more products to two or more groups.<br />
  32. 32. Target MarketingMarket Coverage Strategies<br />Market<br />Company<br />Marketing<br />Mix<br />Company<br />Marketing Mix 1<br />Segment 1<br />Company<br />Marketing Mix 2<br />Segment 2<br />A. Undifferentiated Marketing<br />Segment 3<br />Company<br />Marketing Mix 3<br />Segment 2<br />Company<br />Marketing<br />Mix<br />B. Differentiated Marketing<br />C. Concentrated Marketing<br />
  33. 33. Positioning<br />The act of designing the company’s offering and image to occupy a distinctive place in the minds of the target market.<br />Result is the creation of a customer-focused value proposition:<br />A cogent reason why the target market should buy the product.<br />
  34. 34. Four cornerstones of positioning <br />Who am I?<br />What am I?<br />For whom am I?<br />Why me?<br />
  35. 35. Four cornerstones of positioning…contd.<br />Who am I?<br />Positioning by corporate Identity<br />Positioning by brand endorsement<br />What am I?<br />Category related positioning<br />Benefit related positioning<br />Usage occasion and time related positioning<br />Price-Quality positioning<br />For whom am I?<br />Positioning by Target segment<br />Why me?<br />Positioning by unique attributes<br />Positioning by competitors<br />
  36. 36. Four elements or components of a positioning statement: <br />Target Audience - the attitudinal and demographic description of the core prospect to whom the brand is intended to appeal; the group of customers that most closely represents the brand’s most fervent users.<br />Frame of Reference - the category in which the brand competes; the context that gives the brand relevance to the customer.<br />
  37. 37. Benefit/Point of Difference- the most compelling and motivating benefit that the brand can own in the hearts and minds of its target audience relative to the competition.<br />Reason to Believe - the most convincing proof that the brand delivers what it promises.<br />
  38. 38. Thank You!<br />