Marketer can target a market with two broad strategies. Mass Market Market Strategy Segmentation strategy•Market Segmentation is the process of identifying smallMarkets that exists within a large market .
Mass Marketing or Undifferentiated Marketing e.g. Ruf & Tuf Jeans, Segment Marketing - Cars Niche Marketing – specialize to a narrowly defined customer group – Temple jewellery for South Indian women wanting to take part in cultural programmesLevels of MarketSegmentation Local Marketing – Market around sector 44 One to One Marketing Individual Marketing Mass customization – ability to prepare on a mass basis individually designed products
Why is segmentation useful ? Segmentation helps firm tailor their marketing programs focuses an actionable and accessible set of the market. cuts of wasteful expenditures on unwanted consumers matches needs and wants of specific groups of buyers to firm’s offerings stimulates demands through multi-products for multi-segments resource allocation to segment specific marketing mix activities will be made more efficient Segmentation is a way to plan rather than explain
Geographic - Rural / Urban; metropolis/city/town/village; modern retail stores/kirana stores / mandis/ haats Demographic – Age, Family Size (nuclear or joint ), gender, Income, Occupation, Education, SEC, religion, race, Nationality, social classBases Psychographic – Use of Psychology and demographics •Lifestyle (AIO) – Nike, Benetton, * Personality – Femina – woman of substance * Values – HiDesign leather accessories – consumers who hold the value ‘style and elegance in a classical sense’ Behavioral Segmentation – next slide
Behavioral Segmentation - based on buyer’sknowledge of, attitude towards, use of, or response to a productOccasions – Marriage, Birth – Archies and Hallmark cardsBenefits – In soaps - Dettol – antiseptic, Lux – BeautyUser Status – Non users, first time users, potential users, regular userUsage rate – Light users, medium users, heavy usersBuyer Readiness State – Cold Prospect, Hot ProspectLoyalty status – Hard Core Loyals, Split Loyals, Shifting Loyals, SwitchersAttitude – enthusiastic, positive, indifferent, negative, hostile
Segmenting the Market: Nirma vs HLLUntil about twenty ago, the rural market in India was considered ahomogenous decade of the 1980s was a significant one for HindustanLevel Ltd (HLL), when the giant and undisputed market leader indetergent (Surf) in Indian Suffered significant losses at the hands of anew and small firm , Nirma Chemicals . Nirma immediately caught thfancy of the middle and lower-income customers, who were finding itdifficult to make both ends meet with their limited monthly income.Nirma was the lowest –priced branded washing powder available ingrocery and co-operatives stores. The middle class house wife washappy as she could choose a lower priced washing powder againstSurf, Which was beyond her budgetAround 1984 , HLL decided to take a fresh look at the market.Research conducted across the country revealed that different incomegroups of consumers had varying expectorations from detergent andwashing powder. Thus, to counter the attack from Nirma, HLLlaunched Sunlight (Yellow), Wheel (green) and Rin (blue) detergentpowders for different market segments. This strategy of segmentingthe market helped HLL win back part of its lost market.
Segmenting the Markets• T-Series introduced audiocassettes at unbelievably low price and took away a huge share from the market leader HMV.• Cavin Kare studied the Shampoo market and came out with Chik Shampoo priced at 50 paisa per sachet and the brand became an instant hit in rural areas.• Titan has introduced Sonata brand watches; priced between Rs 350/- and Rs.800/- to meet the requirement of price sensitive rural and semi urban consumers.
Utsav Time• Asian Piants Ltd(APL) is India’s largest paints company and ranks among the top ten decorative coating companies in the world today. The company has come a long way since its small beginning in 1942. APl was the first Indian company to go rural In 1999 It launched Tractor enamel paint in rural markets, rural customers started using it to paint the horns of their bullock. APL survey the rural markets extensively with the able support of its advertising agency Ogilvy outreach. They found that there was a gap in demand in the market for paints used for houses. These were two choice available for rural people : the traditional chuan powder, which cost around Rs9 per kg and enamel paint which cost around Rs 50 per liter was very expensive for most rural customers. Chuan powder however was not long lasting .Hence APL launched Utasv distemper exclusively for rural markets in 1999. Utsav is good example of brand that used excellent STP for rural markets.
Segmentation Variables Demographic Geographic variables Variables Psychographics Product Related Variables Variables•Segmentation variables are the parameters andcharacteristics of people comprising total market for oproduct category on which can segment them intogroups.
Conditions fro Effective Market Segmentation 1.Measurable Customer Oriented Philosophy 2.Accessible Enables Tailoring of marketing Programme Profitable Enables Development of Data strong positioning of Brand Availability
Approaches for segmentation the rural market of India• Based on Size of Village Population (The size of population residing in a village is a significant factor which determines the overall potential demand for a product or service in that village)Population No.of Villages % of total VillagesLess than 200 114,267 17.9*200-499 155,123 24.3*500-999 159,400 25.01,000-1,999 125,758 19.72,000-4,999 69,135 10.8**5,000-9,999 11,618 1.8**10,000& above 3,064 0.5**Note:* Hardly any shop in these 2.7 lakh village** 13% of villages falling in the last three categories account 50% rural population and 60% rural wealth.
Based on Location with Respects to Nearby Town• Villages Near Urban Centers.• Villages in Developing Districts• Immobile and self sufficient Asiatic Villages
Based on Size of Farmland1. Marginal Farmer :holding upto 1.0 hectare2. Small Framer :holding 1.0-2.0 hectare3. Semi-medium :holding 2.0-4.0 hectare Farmer:5. Medium Farmer : holding 4.0-10.0 hectare6. Large Farmer :holding 10.0 hectares and above