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Target marketing

Target marketing

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Target marketing

  1. 1. TARGET MARKETING TARGET MARKET 1
  2. 2. MARKET SEGMENTATION AND SELECTING TARGET MARKETS At the end of this module the learning outcomes are. 1. Why there is a need to segment markets? 2. What are the various levels of market segmentation? 3. What are bases for segmenting consumer markets? 4. How the markets are targeted? TARGET MARKET 2
  3. 3. MARKET SEGMENTATION AND SELECTING TARGET MARKETS SUGGESTED READINGS 1. Marketing Management by Philip Kotler, chapter 9 &10th edition. 2. Marketing Management by Ramaswami and Namkumari, Chapter 6. TARGET MARKET 3
  4. 4. MARKET SEGMENTATION AND SELECTING TARGET MARKETS MARKET SEGMENTATION The need  Cannot serve all customers of this universe.  No company has that kind of resources.  Customers  Too numerous  Diverse in their buying requirement  Need to identify the market segments that it can serve more effectively TARGET MARKET 4
  5. 5. MARKET SEGMENTATION AND SELECTING TARGET MARKETS MARKET SEGMENTATION. - The universe is heterogeneous. - Divide the universe into market segments, where buying or need requirements is same i.e. homogenous. - Attack one or few market segments. - This is target marketing. TARGET MARKET 5
  6. 6. TARGET MARKETING TARGET MARKET 6 Steps in the Targeting Process: Market Segmentation Market Targeting Market Positioning
  7. 7. TARGET MARKETING  Target marketing requires marketers to take three major steps:  Identify and profile distinct groups of buyers who differ in their needs and preferences (market segmentation).  Select one or more market segments to enter (market targeting).  For each target segment, establish and communicate the key distinctive benefit(s) of the company’s market offering (market positioning). TARGET MARKET 7
  8. 8. MARKET Mass Marketing SEGMENTATION AND SELECTING TARGET MARKETS  Seller engages in mass production.  Mass distribution.  Mass promotion of one product for all buyers. Example Coke in 60 & 70s,  Sold in India  One size 200 ml. TARGET MARKET 8
  9. 9. MARKET SEGMENTATION AND SELECTING TARGET MARKETS Arguments for mass market.  Creates largest potential market  Leads to lower cost  Lead to lower prices.  Higher margins Why criticised  Market fragmentation  Splintering of the market  Mass media proliferation.  Distribution channel proliferation Difficult to practice “one size fits all’’ marketing. TARGET MARKET 9
  10. 10. USING MARKET SEGMENTATION TARGET MARKET 10 Levels of Micromarketing SSeeggmmeenntt MMaarrkkeettiinngg NNiicchhee MMaarrkkeettiinngg LLooccaall MMaarrkkeettiinngg IInnddiivviidduuaall MMaarrkkeettiinngg
  11. 11. MARKET SEGMENTATION AND SELECTING TARGET MARKETS MARKET SEGMENTATION LEVELS 1. Segment Marketing  Consists of a large identifiable group within a market with similar wants, purchasing power, attitudes or buying habits  Each segment’s buyers are assumed to be quite similar in needs /wants  No two buyers all alike  Flexible market offerings TARGET MARKET 11
  12. 12. MARKET SEGMENTATION AND SELECTING TARGET MARKETS Flexible market offering consists of two parts 1. Naked solution - Consists of products and service elements that all segment members value 1. Options - That some segment members value - Each option carries additional prices. TARGET MARKET 12
  13. 13. MARKET SEGMENTATION AND SELECTING TARGET MARKETS Example – Segment Marketing Delta Airlines · Economy Class passenger - Seat - Food - Soft Drink All of them – naked solution · Charges extra - Alcoholic beverages - Earphones TARGET MARKET 13
  14. 14. MARKET SEGMENTATION AND SELECTING TARGET MARKETS Segment marketing – benefits - More fine tuned product - Price it appropriately for the target audience - Fewer competitors - Easier choice of • Distribution channels • Communication channels TARGET MARKET 14
  15. 15. MARKET SEGMENTATION AND SELECTING TARGET MARKETS Niche marketing - Narrowly defined group - Needs are not well serviced - Seeking a distinctive mix of benefits - Fairly small market size - Normally attract one or two players - Customers willing to pay a premium price. TARGET MARKET 15
  16. 16. MARKET SEGMENTATION AND SELECTING TARGET MARKETS  1. High end designer wear like Gucci, Chanel, Tarun Tahiliani etc.  2. Automobiles like Ferrari, Maserati, Lamborghini etc.  WHAT IS A NICHE TODAY MAY BECOME A SEGMENT TOMORROW AND VICE VERSA!! TARGET MARKET 16
  17. 17. 2. Ostrichesonline.com - Selling Ostrich derived products - On line - 2 million $ sales in 1998 - Visitors can buy · Ostrich meat · Feathers · Leather jackets · Videos · Eggshells · Skin care products derived from ostrich · Body oil TARGET MARKET 17
  18. 18. MARKET SEGMENTATION AND SELECTING TARGET MARKETS 3. Local marketing - Needs of local customer groups Example Kraft Cheese · Helps supermarket chains · Identify cheese assortment and shelf layout · Optimise cheese sales in - Low - Middle - High income stores - Different ethnic groups TARGET MARKET 18
  19. 19. MARKET SEGMENTATION AND SELECTING TARGET MARKETS 4. Individual marketing - Ultimate level of segmentation - Segment of one. - One-to-one marketing. - Customised to individuals - Tailor made - Cobbler designed shoes. - Customised industrial products Use of new technologies - Computers. - Databases Customised offering. TARGET MARKET 19
  20. 20. MARKET SEGMENTATION AND SELECTING TARGET MARKETS Example 1. Dilip Chhabria -Designer cars - Customised cars - Small market - About 500 a year - Each car is unique, high prices TARGET MARKET 20
  21. 21. MARKET SEGMENTATION AND SELECTING TARGET MARKETS Turning to Mass customisation It is the ability to prepare on a mass basis individually designed products and communication to meet each customer’s requirements. Example. Levi’s Jeans - Customer measurements. - Jeans ready in 8 hrs. Mattel Barbie com Design your own Barbie doll. TARGET MARKET 21
  22. 22. MARKET SEGMENTATION AND SELECTING TARGET MARKETS - Choose Doll’s • Skin tone • Eye colour • Haircolor. • Clothes • Accessories • Her likes and dislikes. - When Barbie delivered. • Doll’s name on the package • Computer generated paragraph about her personality TARGET MARKET 22
  23. 23. USING MARKET SEGMENTATION TARGET MARKET 23 Basic Market-Preference Patterns
  24. 24. USING MARKET SEGMENTATION Needs-based Segmentation Process  Segment profitability  Segment positioning  Needs-based segmentation  Segment identification  Segment attractiveness TARGET MARKET Marketing-mix strategy 24
  25. 25. SEGMENTATION Characteristics of Effective Segments Measurable Actionable TARGET MARKET 25 Substantial Accessible Differentiable
  26. 26. SEGMENTING CONSUMER MARKETS  Nation or country  State or region  City or metro size  Density  Climate Bases for Segmentation  Geographic  Demographic  Psychographic  Behavioral TARGET MARKET 26
  27. 27. MARKET SEGMENTATION AND SELECTING TARGET MARKETS Example Geographic Ford Ikon in India 1. World car 2. Changes for India 1. Higher suspension 2. Larger size air conditioner, higher ambient temperature 3. Lower average speeds 4. Handle adulterated fuel 5. Petrol / diesel adulterated with kerosene TARGET MARKET 27
  28. 28. SEGMENTING CONSUMER MARKETS  Age, race, gender  Income, education  Family size  Family life cycle  Occupation  Religion, nationality  Generation  Social class Bases for Segmentation  Geographic  Demographic  Psychographic  Behavioral TARGET MARKET 28
  29. 29. SEGMENTING CONSUMER MARKETS  Lifestyle  Activities  Interests  Opinions  Personality  Core values Bases for Segmentation  Geographic  Demographic  Psychographic  Behavioral TARGET MARKET 29
  30. 30. MARKET SEGMENTATION AND SELECTING TARGET MARKETS a. Lifestyle Nestle Classic - Pleasure of making coffee · Adding milk, sugar, coffee in hot milk Nestle “3 in 1 - Office goers - Paucity of time - Espresso feeling - Milk sugar coffee premixed TARGET MARKET 30
  31. 31. b. Personality - Targeting consumer personality - Customer of Ford  Independent  Impulsive  Masculine  Alert to change  Self confident - Customers of Chevrolet  Conservative.  Thrifty  Prestige.  Conscious.  Avoid extremes TARGET MARKET 31
  32. 32. MARKET SEGMENTATION AND SELECTING TARGET MARKETS C. VALUES Tourists to Disneyland • Fun seekers • Families visit Tourists to Udayan child welfare unit at Kolkatta • Stay and meet poor children • Share thoughts • Donate TARGET MARKET 32
  33. 33. SEGMENTING CONSUMER MARKETS  Occasions  Benefits  User status  Usage rate  Loyalty status  Buyer-readiness  Attitude Bases for Segmentation  Geographic  Demographic  Psychographic  Behavioral TARGET MARKET 33
  34. 34. SEGMENTING CONSUMER MARKETS  Multi-attribute segmentation via geoclustering combines multiple variables to identify smaller, better-defined target groups TARGET MARKET 34
  35. 35. MARKET TARGETING STRATEGIES  Evaluating and selecting market segments requires assessing the segment’s overall attractiveness in light of company’s objectives and resources.  Five patterns of target market selection can then be considered. TARGET MARKET 35
  36. 36. MARKET TARGETING STRATEGIES TARGET MARKET 36 Five Patterns of Target Market Selection
  37. 37. MARKET TARGETING STRATEGIES  Targeting multiple segments may result in cost economies  Higher costs using differentiated marketing include:  Product modification cost  Manufacturing cost  Administrative cost  Inventory cost  Promotion cost TARGET MARKET 37
  38. 38. For details and bookings contact:- Parveen Kumar Chadha… THINK TANK (Founder and C.E.O of Saxbee Consultants) Email :-saxbeeconsultants@gmail.com Mobile No. +91-9818308353 Address:-First Floor G-20(A), Kirti Nagar, New Delhi India Postal Code-110015

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