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Market segmentation

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Market segmentation

  1. 1. Prepared by: Kiran Pata Kinjal Patel Parag Chitroda Jugal Shah Bhavesh Vaghamshi
  2. 2. CONCEPT AND DEFINITION  The concept of market segment is based on the fact that the market of commodities are not homogeneous but they are heterogeneous. Market represent a group of customer having common characteristics but two customer are never common in their nature, habits, hobbies income and purchasing techniques.
  3. 3.  Market Segmentation is a method of “dividing a market (Large) into smaller groupings of consumers or organizations in which each segment has a common characteristic such as needs or behavior.”
  5. 5. 1. SEGMENT MARKETING . Consists of a group of customers who share a similar set of needs and wants. Identifiable Group with in a Market with Similar • Wants • Purchasing Power • Geographical Location • Buying Attitudes
  6. 6. BASIS FOR MARKET SEGMENTATION  Following are the main basis for market segmentation. 1. Geographical segmentation 2. Demographic segmentation 3. Psychographic segmentation 4. Behavioural segmentation
  8. 8. GEOGRAPHIC SEGMENTATION  Divide the market into different group based on : • Region : • South India , North , Western Region, East • City : • Metro cities, cities with population more than 1 million.  Rural and semi-urban areas:  Rural villages with a population of over 10,000; semi-urban areas ; small towns with a population between 20,000 and 50,000.
  9. 9.  Examples:  Dainik Bhaskar Group:  Dainik Bhaskar, in Hindi  Divya Bhaskar, in Gujarati  Divya Bhaskar in Marathi  DNA in English It is available in 14 states with different four launguages . It has 7 main editions & 28 District editions.
  10. 10.  Videocon D2H :  Videocon D2H provides different packages of channels to the customers like,  North, East& West India Packages  South India Packages
  11. 11. DEMOGRAPHIC SEGMENTATION  Age:  It is essentially a case of age based segment of market.  Example: Amul has segmented his product in different age group.  For kids : Amul Kool, chocolate milk, nutramul energy milk  For Youth : Amul cool cafe  For Women & older people : Amul calc+, Amul Shakti energy drink
  12. 12.  Family size:  Young , single; young , married, no children ; young , married , youngest child under 6; young , married ,youngest child under 6 or over ; older ,married , with children ; older , married , no children under 18 ; older , single ; other.  Gender:  Male , Female  Example:  HUL provides Fair & lovely for women & men  Red Chief target men in India.
  13. 13.  Income:  Segmenting the market by keeping in mind the customer’s income level.  Example:  Nokia  Nokia 2600 price RS 2750  Nokia 5130 price RS 5300  Nokia N73 price RS 12500  NokiaN95 price RS 22500  Occupation:  Unskilled worker , skilled worker , petty traders , shop owners , bussinessman/indusrialist , self-employed ( professionals , clerical/salespersons , supervisory levals , officers/junior exectives. Middle / senior executies .  Example : Raymond suits
  14. 14.  Education :  Literate , school up to 4 years , school between 5 and 9 years , SSC/HSC , nongraduate , graduate/postgraduate ( general) , graduate/postgraduate (professional).  Example:  Navneet Publication offers guides & study material for schools as well as colleges. They olso publish reference books for competitive exams.
  15. 15. PSYCHOGRAPHIC SEGMENTATION  Psychographic segmentation divides buyers into different groups based on lifestyle, personality characteristics, or social class.  To better meet the psychological needs of people, marketers often segment their markets by consumer personalities and lifestyles.  Example:  Thums Up is marketed as a drink for tougher, action-oriented men whereas Pepsi is marketed predominantly as a youth drink.  CCD choose life style oriented, urban customers as target with youth.
  16. 16. BEHAVIOURAL SEGMENTATION  In Behavioural Segmentation, buyers are divided into groups on the basis of their knowledge of, attitude towards, use of, or respond to a product.  Variables of buyer behaviour are:  Benefit sought: - Quality/economy/service/look etc of the product.  Example- Nestle has found a separate atta noodles as distinct from maida noodles  User status : Heavy user/ moderate user/ light user  Usage Rate : Regular/ potential/ first time user/ irregular/  Loyalty Status : Hard core loyal/ split loyal/ shifting/ switches
  17. 17.  Occassion:  Cadbury’s advertisement to promote the product on the basis of various occasion.  On navratri, there will be a great demand for traditional clothes.  On Diwali occassion, people may purchase jewellary items so we’ll find more advertisement of jewellers like TBZ, Kalyan Jewellers . The same is true in marriage season.
  18. 18. 2. NICHE MARKETING  Group of customers seeking a distinctive mix of benefits who are ready to pay extra premium.  Niche = segment sub – segments e.g Washing detergents hard & gentle washes . Surf excel for tough stains ( hard on clothes) & Ezee from Godrej for delicate clothes. - Astha , Sanskar , Q TV – focus on religion & spiritualism.  DISTINCT NEEDS  PAY PREMIUM  SPECIALIZATION  LESS COMPETITION  POTENTIAL
  19. 19.  Example:  Harley Davidson bikes  Star channel provides various channels for different customer groups:  i.e for entertainment star plus  For youth - MTV  For hindi movies – Star Gold  For English movies – Star Movies  Also there are 4 different sports channel of star group Here they provide product/service to a specific customer group that’s why it can be considered as niche marketing.
  20. 20. ROLLS ROYCE
  21. 21. 3. LOCAL MARKETING  Marketing programs tailored to the needs & wants of local customer groups in trading areas, neighborhoods , etc.  This trend is called grass roots marketing. Example: - Shiva Bakery in porbandar surves bakery products only for limited area. - Induben Khakharawala in ahmedabad can also be considered as local marketing. - Mumbai’s Dabbawala also considered as local marketing.
  22. 22. 4. INDIVIDUAL MARKETING  Ultimate segmentation – segments of 1 or customized marketing or one to one marketing.  Customerization – empower the consumers to design the product or service offering of their choice.  Example:  Airtel launched MYPLAN in which an individual person can know about data usages, balance information, n all activated plan.  SBI has also developed a mobile app “ SBI FREEDOM” which facilitates all banking facilities in mobile to an individual.
  23. 23. TARGET MARKET Target market selection is the process of fixing the target market for one particular product. Target marketing contrasts with mass marketing, which offers a single product to the entire market. Market segmentation involves dividing customers into groups (market segments) with common characteristics.
  24. 24. STRATEGIES OF MARKET TARGETING 1. Single-segment concentration 2. Selective specialization 3. Product specialization 4. Market specialization 5. Total market coverage
  25. 25. SINGLE-SEGMENT CONCENTRATION  Business is focused on any one segment of the market .  example For cricket balls, cricket bats and related sporting gear, cricket clothing, etc. the business objectives could be to become the largest supplier of cricket accessories in a particular geographic market.
  26. 26. SELECTIVE SPECIALIZATION  The business focuses on a number of segments in the market.  There may not necessarily be any relationship between the segments; however each segment has a high degree of value for the business objectives and resources.  Since, the segments can stand alone, the risk of failure is reduced by the diversification - the assumption is that at least one, or more, of the segments will be successful at any one time.
  27. 27. PRODUCT SPECIALIZATION:  The business focuses on one product and it sells to a number of segments.  For example, a coffee distributor might sell coffee to a retail store chain, to a number of coffee shops, and even direct to the end consumer  By expanding one’s market through product specialization a firm can build a very strong brand for the product and its business. For example, Café Coffee Day specializes in different varieties of coffee.
  28. 28. MARKET SPECIALIZATION:  The business focuses on supplying many products to one market segment.  For example, the business might be supplying all types of sporting goods to sporting goods stores (e.g. soccer, tennis, cricket, basketball, etc.). With this type of strategy
  29. 29. TOTAL MARKET COVERAGE  This type of targeting is attempted by large companies with a lot of financial strength.  The business has many products and services many markets.  The cost for this type of target marketing approach is high: the business must have strong distribution channels, large resources, and many products. Small businesses should not attempt total market coverage.
  30. 30. • Positioning is not what you do to a product. Positioning is what you do to the mind of the prospects.
  31. 31. DEFINITION & CONCEPT  “ Product positioning is defined as the process of establishing & maintaining a distinctive place in the market for an organization and/or its individuals product offerings.”  It involves a company’s product/services creating & occupying a place, in the minds of customers.
  32. 32.  Marketer should analyse the current position occupied by their firms in the (present & prospective) customer’s minds & take necessary steps to create a distinct & effective position.
  33. 33.  Examples:  “McDonalds” is known for its ‘variety of products, speed, and efficient customer services.’
  34. 34.  “ The Ritz Carlton” is considered one of the best hotels around the world for ‘customer services’.
  35. 35. DIFFERENTIATION  In today’s cut throat competition, company should differentiate their product/services from those of their competitors to survive in the market.  It refers to the process of actually creating a difference in the perception of a product in the mind of customers.  It is closely related to product positioning.
  36. 36. DIFFERENTIATION AND POSITIONING STRATEGY  The positioning task consists of three steps: 1. Identifying a set of differentiating competitive advantages, 2. Choosing the right competitive advantages, 3. Selecting the overall positioning strategy
  37. 37. 1. Identifying a set of differentiating competitive advantages:  Competitive advantage is defined as the strategic advantage a business organisation has over its competitors in the industry.  Marketers can find different ways to create a differentiation by analysing the whole set of customers’ experience with the company’s product or service.  A company can differentiate itself along the lines of the  product,  services,  people, or  image.
  38. 38.  Product Differentiation:  Product differentiation refers to a differentiation created on the features, performance, style, or design of the product.  For instance,  Favicol’s ad campaign differentiate their product by displaying super quality even in the worst situation like in water too.  Similarly, Hero Honda had used the campaign slogan of “fill it, shut it, forget it” to differentiate itself of in terms of superior mileage.
  39. 39.  Services Differentiation:  Service differentiation is used to differentiate the service in cases where the market offering is in the form of a service (as in the cases of hotels, travel packages, online booking services etc.), or to differentiate the service that accompanies the product.  Example: A “Wildflower Hall” offering a free pick up and drop facility in Mercedes at the airport is differentiating its services.
  40. 40.  People Differentiation:  People Differentiation is especially significant in the case of services where human interaction is a key aspect of the value sought by the consumer.  Example:  Customer service provider of vodaphone  Services provided by Hotels, Hospitals, Consultancy firm etc.
  41. 41.  Image Differentiation:  Consumers often use the brand’s image to perceive the difference among competing brands.  For instance, if a company wants to differentiate itself with a brand image of being trendy, the image should reflect in all its communication including the company logos, the staff uniforms, the websites, brand endorsers, colour patterns used in the ad campaigns etc.
  42. 42.  Examples:  Fastrack watches is generally perceived as the product for youth  Thumps Up ad campaign differentiate themselves in energetic drink in India.  BATA is famous for quality product  Idea n Vodaphone for unbreakable network....
  43. 43. 2. CHOOSING THE RIGHT COMPETITIVE ADVANTAGES  A company may discover several potential differentiations that may provide competitive advantages. It must then decide which competitive advantages to promote.  In the United States for instance, when General Motors positioned its brand Chevrolet through an ad campaign as a “large, small, cheap, expensive car”, understandably, the consumers were confused. The 50 percent market share of General Motors steadily declined to 29 percent.  Not all brand differences may be considered meaningful or worthwhile by the consumer. A difference has the potential to create company costs (in order to fulfil the brand promise), and to create customer benefits.
  44. 44.  In general, for differences to be worth establishing, they must meet the following criteria;  Important  Distinctive  Superior  Communicative  Pre-emptive  Affordable  Profitable.
  45. 45. 3. SELECTING AN OVERALL POSITIONING STRATEGY  The overall positioning of a brand refers to the brand’s value proposition which includes the full set of benefits upon which it is positioned.  The possible value propositions upon which a company might position its products can be classified into categories as depicted in the picture.
  46. 46. More for more More for less More for the same Less for much Less The same for the less more Value propositions: less more less Benifits price Winning propositions Losing propositions
  47. 47.  Here we have the five winning value propositions : 1. more for more, 2. more for the same, 3. the same for less, 4. less for much less, and 5. more and less.
  48. 48. 1. More for more:  “More-for-more” positioning represents the most upscale product or service that charges a higher price to cover the higher costs.  Examples :  Apple iPhones  Ritz-Carlton Hotels  Mont Blanc pens  Café Coffee Day  Parker pens
  49. 49.  Example:  “Oberoi and Hilton” hotels provides high quality services by charging high prices.
  50. 50. 2. More for the same:  Companies attack its high-priced competing brand by introducing a brand that offers matching or comparable quality but at a lower price.  Examples:  Toyota’s Lexus lines of cars against Mercedes and BMW  Samsung has launched phones that offer features comparable to iPhones at a lesser cost.  And also micromax has launched phones that offers features comarable to samsung and other android phones
  51. 51. 3. The Same for Less:  “The same for less” proposition is based on the fact that most consumers like a good deal.  Many companies claim not to give better or superior products but the same products at much lower prices.  Examples  Croma, the electronics retail stores   
  52. 52. 4. Less for much less:  “Less-for-much-less” positioning is usually a high volume category that meets consumers’ lower quality requirements at a much lower price.  Example:  Maruti 800, and Tata Nano  Low priced hotels,
  53. 53. 5. More for less:  “More-for-less” represents the best value proposition that offers the best or nearly the best in terms of product benefits but cost much less.  Examples  Tata Indica’s offer that claimed to give “more car per car.
  54. 54. CHANGING THE PRODUCT POSITIONING  Changing the identity of a product or a company in the mind of stake holders and competitors.  The company need to consider a repositioning strategy if they have a weak brand, if they have not remained competitive in the market, or if there is a change in the economy.
  55. 55. CADBURY INDIA -  In initial days Cadbury's chocolates were meant basically for the kids and the ads also revolved around that concept only in which parents were seen trying to bribe or reward their children with Cadbury’s dairy milk chocolates.  The Cadbury changed this things with the help of launching innovative advertising campaigns over a period of time & they become successful in changing their position in the mind of customers.
  56. 56.  The advt camaigns:  “ Kid in all of us”  “ Real Taste of Life”  “ Kuchh Khas Hai Zindagi Mein”  “ Khaane Waalon ko Khaane Ka Bahana Chahiye  “ Kuchh Mitha Ho Jaaye”  “ Pappu Pass Ho Gaya”  “ Radha miss Palampur ban gaye  “ Meetha hai Khaana aaj Pehli Tareekh Hai”  “ Iss Diwali aap Kise khush kar rahe hain”  “ Shubh Aaarambh”  “ Dil Jo Keh Raha hai suno”
  57. 57. BIBLIOGRAPHY      i-nurture SLM  Marketing Management- A south Asian Perspective  by Philip Kotler , Kevin Keller, Abraham Koshy, Mithileshwar Jha
  58. 58. THANK YOU