4. FULL MARKET COVERAGE
A firm attempts to serve all customer groups with all the products
they might need.
Only large firms can undertake a full market coverage strategy
Cam cover a whole market in 2 broad ways
Differentiated marketing
Undifferentiated marketing
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5. FULL MARKET COVERAGE
Undifferentiated Marketing or Mass marketing
The firm goes after the whole market with one offer to the
bradest number of buyers
Mass distribution mass communication
Appropriate when all consumers have same preferences and
market has no natural segments
Henry Ford, Model-T ford in one colour, black
Lowest cost lower prices higher margins
Increasing Splintering of market, proliferation of channels &
communication is making difficult and expensive to reach mass
audience
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6. FULL MARKET COVERAGE
Differentiated Marketing
The firm sell different products to all the different segments of
the market
Creates more total sales
Increase cost of doing business
No generalizations about its profitability are valid
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8. MULTIPLE SEGMENTS
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Selective Specialization.
A firm selects subset of possible segments(suprasegments), each
attractive and appropriate
May or may not be synergy among the segments
Diversifies the firm’s risk
Example: symphony orchestras
9. MULTIPLE SEGMENTS
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Synergy can be achieved with-
Product specialization-
Sells a certain product to several different market segments
Building strong reputation on specific product area
Product maybe supplanted by entirely new technology
Market specialization-
Firm concentrates on serving many needs of a particular customer group
Building strong reputation among this customer group
Customer group may suffer budgt cuts or shrink in size
11. SINGLE SEGMENTS
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Markets to only one segment
Example: Porsche on sports cars and Volkswagen on small cars
Deep knowlegde on segment’s need
Strong market presence
Operating economies by specializing its production, distribution and
promotion
13. NICHE MARKETING
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Niche- narrowly defined customer group seeking distinctive mix of
benefits within a segment.
Marketers aim to understand customers’s needs so well that hey
willingly pay a premium
Example: Revolution plus sized apparel for women.
Niche is fairly small but has size, profit and growth potential
(‘chasing the long tail’)
Unlikely to attract competition
15. INDIVIDUAL MARKETING
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Segments of one
One to one marketing
Major source- Internet
Customerization mass customization that empowers consumers to
design products and services according to their needs
Firms provide platform and tools and rents to customers the means
to design their own product
Raises costs
19. GEOGRAPHIC SEGMENTATION
Divides into geographical units
such as nations, states, regions,
countries, cities or
neighbourhood
There are differences in
consumer preferences, purchase
patterns, and behaviours across
regions
Hence different market efforts
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20. DEMOGRAPHIC SEGMENTATION
Age and life
cycle stage
Lifestage Gender
Income
Socio-
Economic
Classification
Generation
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21. AGE AND LIFE CYCLE STAGE
Titan’s Zoop targets 6-14 year-old-children by using
design elements that reflect the preferences of the target
segment
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22. LIFE STAGE
iBall Aasaan, targeted at citizens, has features that are
compatible with the needs of the segment
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23. GENDER
Today, many companies are targeting
women, and not just men, for their two-
wheeler brands. Mahindra Rodeo, for
example, uses Kareena Kapoor as its
brand ambassador, suggesting the
brand’s qualities of power and style
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24. INCOME
With the increase in income, luxury
wristwatch brands such as TAG Heuer are
increasing their visibility and presence in
the Indian market
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26. PSYCHOGRAPHIC SEGMENTATION
Psychographics is the science of using
psychology and demographics to better
understand consumers
Buyers are divided into different groups on the
basis of psychological/personality traits, lifestyle,
or values
Popular and commercially available classification
system is Strategic Business Insight’s (SBI) VALS
framework.
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28. BEHAVIOURAL SEGMENTATION
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Marketers divide buyers into groups on the
basis of their knowledge of, attitude toward,
use of, or response to a product.
•Occassions
•User Status
•Usage Rate
•Buyer Readiness Stage
•Loyalty Status
•Attitude
•Multiple Bases
Needs and Benefits
Decision Roles
User and Usage- Real
user and Usage-Related
Variables
29. BUYER-READINESS STAGE
LifeCell uses celebrity endorsements to
introduce umbilical cord stem cell
banking in India.
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31. LOYALTY STATUS
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Hard-core loyals- Consumers who buy only one brand all the time
Split loyals- Consumers who are loyal to two or three brands
Shifting loyals- Consumers who shift loyalty from one brand to
another
Switchers- Consumers who show no loyalty to any brand
32. CREDITS
All Photos are taken from google images and Book on ‘Marketing
Management’ by Kotler
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34. STEPS IN SEGMENTATION
PROCESS
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Needs-Based Segmentation
Segment Identification
Segment Attractiveness
Segment Profitability
Segment Positioning
Segment Acid Test
Marketing-Mix Strategy
35. BUT NOT ALL SEGMENTATION
SCHEMES ARE USEFUL
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We need an effective segmentation criteria
36. EFFECTIVE SEGMENTATION
CRITERIA
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Market segments must rate favourably on five key criteria:
Measurable
Substantial
Accessible
Differentiable
Actionable
37. MARKET SEGMENTS SHOULD ALSO
BE ATTRACTIVE IN THE LONG RUN
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Michael Porter’s five forces can determine the intrinsic long-run
attractiveness of a market segment
38. MARKET SEGMENTS SHOULD ALSO
BE ATTRACTIVE IN THE LONG RUN
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Threat of intense
segment rivalry
Threat of suppliers’
growing bargaining
power
Threat of substitute
products
Threat of new
entrants
Threat of buyers’
growing bargaining
power
41. SEGMENTING BUSINESS MARKETS
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Business markets can be segmented using same variables to segment
consumer markets
Ex- geography, benefits sought, usage rate etc.
But other variables can also be used for business markets
Ex- operating variables, situation factors, personal characteristics etc.
42. MAJOR SEGMENTATION VARIABLES
FOR BUSINESS MARKETS
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Demographic
Operating Variables
Purchasing Approaches
Situation Factors
Personal Characteristics
43. SEQUENTIAL PROCESS OF
SEGMENT IDENTIFICATION
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Example-
1. Macrosegmentation
1. End use market to serve- Automobile,
Residential, Beverage containers
2. Product application- semifinished
material, building components,
aluminium mobile homes
3. Customer size- large customers
2. Microsegmentation
1. Distinguished among customers buying
on price, service, quality
44. FLEXIBLE MARKET OFFERINGNAKEDSOLUTION
Product and
service elements
that all segment
members value
DISCRETIONARY
OPTIONS
Some segment
members value
options but not
all.
Buyer has to pay
moreShivam Verma || IIT Delhi
46. HOW SHOULD A COMPANY
CHOOSE THE MOST
ATTRACTIVE TARGET
MARKETS?
47. EVALUATING DIFFERENT MARKET
SEGMENTS
The firm must look at 2 factors:
Overall attractiveness of the segment
Company’s objectives and resources
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48. THE MARKET MUST HAVE
ATTRACTIVE CHARACTERISTICS
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Size
Growth
Profitability
Scale Economies
Low Risk
49. SOME QUESTIONS THAT SHOULD
BE ANSWERED
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oHow well does a potential segment score on the effective
segmentation five criteria?
oDoes investing in the segment make sense given the company’s long
run objectives?
oDoes the company lack one or more necessary competencies to offer
superior value?
oWhich level of segmentation is required?
50. ETHICAL CHOICE OF MARKET
TARGETS
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oAvoid consumer backlash
oPublic controversy due to unfair advantage of vulnerable groups
oFaulty products