Strategic Product Management - Introduction

1. A publication of
Dr. Rajesh K Satpathy
Strategic
Product
Management
Introduction/PGDM/KIAMS/2021

2. Facts vs Myth
• The competitive marketing is all about war, warriors and wealth.
• In their bid to generate more wealth, marketers have always
struggled to discover new warriors.
• The warriors would effectively decimate the competition. But
decimation of competition is not the end in itself.

5. In Japan, the
fuel cell sedan is
on sale at
Toyota and
Toyopet
dealerships,
priced at
approximately 7
million Yen or
INR 46,23,244.

6. Facts vs Myth
• Good products are essential for gaining entry into the marketing game,
but that is not sufficient.
• Free business environment easily enables any marketer to make any
product, as good as the best in the industry.
• Quality products are common, but very few succeed among them.
• Time is witness to the rise or fall brands of various ‘means’ which
corporate strategies devised and developed to meet the battlefield
challenges.

8. What we mean by a Product???
Product is a set of tangible and intangible
attributes, including packing, color, price,
manufacturer’s prestige, retailer’s prestige,
manufacturer and retailer’s services, which the
buyer may accept as offering satisfaction of
wants or needs.
Or
Simply… Product is the bundle of utilities by
which it can satisfy the needs of the users.

9. Current Scenario
In 2021, the new competition is not between what companies
produce in their factories, but between what they add to their
factory output in the “in terms of packaging, services,
advertising, customer advice, financing, delivery arrangements,
warehousing, and other things that people value”.

11. Easy financing

12. Why Segment the Market?
A product needs to be relevant: the users must
have an immediate use for it. A product needs to
be functionally able to do what it is supposed to,
and do it with a good quality.
A product needs to be communicated: Users and
potential users must know why they need to use
it, what benefits they can derive from it, and what
it does difference it does to their lives.
Advertising and 'brand building' best do this.
MRF Mogrip - The Go Anywhere

13. Asian Paints -
Homes Not
Showrooms
A product
needs to be
communicated

14. A product
needs to be
communicated
Be Unlimited.
Unstoppable.

15. Five Conditions for Effective Segmentation
To have segmentation to be meaningful:
1. A marketer must determine whether the market is
heterogeneous. If the consumers’ product needs are
homogeneous, then it is senseless to segment the market.
2. There must be some logical basis to identify and divide the
population into relatively distinct homogeneous groups, having
common needs or characteristics and which will respond to a
marketing programme.

16. Five Conditions for Effective Segmentation
3. The total market should be divided in such a manner that
comparison of estimated sales potential, costs, and profits of each
segment can be done.
4. One or more segments must have enough profit potential that
would justify developing and maintaining a marketing programme.
5. It must be possible to reach the target segment effectively. For
instance, in some rural areas in India, there are no media that can
be used to reach the targeted groups.

17. Segmentation studies are used to uncover needs and wants of specific groups of consumers…

18. How Segmentation Helps !!
Segmentation studies are used to uncover needs and
wants of specific groups of consumers for whom the
marketer develops especially suitable products and
services to satisfy their needs.

19. Bases of Segmentation…

20. Bases of Market Segmentation
Segmenting is dividing a group into subgroups according
to some set ‘basis’.
These bases range from age, gender, etc. to
psychographic factors like attitude, interest and values.

21. Bases of Market Segmentation
Gender
Gender is one of the most simple yet important bases of
market segmentation. The interests, needs and wants of
males and females differ at many levels.
Thus, marketers focus on different marketing and
communication strategies for both. This type of
segmentation is usually seen in the case of cosmetics,
clothing, and jewellery industry, etc.

22. Bases of Market Segmentation
Age Group
Segmenting market according to the age group of the
audience is a great strategy for personalized marketing.
Most of the products in the market are not universal to be
used by all the age groups.
Hence, by segmenting the market according to the target
age group, marketers create better marketing and
communication strategies and get better conversion
rates.

23. Bases of Market Segmentation
Income
Income decides the purchasing power of the target
audience. It is also one of the key factors to decide
whether to market the product as a need, want or a
luxury. Marketers usually segment the market into three
different groups considering their income. These are…
• High Income Group
• Mid Income Group
• Low Income Group

24. Bases of Market Segmentation
Place
The place where the target audience lives affect the
buying decision the most. A person living in the mountains
will have less or no demand for ice cream than the person
living in a humid or hot climate regions.

25. Bases of Market Segmentation
Occupation
Occupation, just like income, influences the purchase
decision of the audience. A need for an CEO might be a
luxury but for a government sector employee??? It may
be based on hierarchy !!
There are even many products which cater to an
audience engaged in a specific occupation.

26. Bases of Market Segmentation
Usage
Product usage also acts as a segmenting basis. A user
can be labelled as heavy, medium or light user of a
product.
The audience can also be segmented on the basis of
their awareness of the product.
Eg. Lip Colour, Cigarette

27. Bases of Market Segmentation
Lifestyle
Other than physical factors, marketers also segment the
market on the basis of lifestyle. Lifestyle includes
subsets like marital status, interests, hobbies,
religion, values, and other psychographic factors
which affect the decision making of an individual.

28. Bases of Market Segmentation
Geographic Segmentation
Geographic segmentation divides the market on the basis
of geography. This type of market segmentation is
important for marketers as people belonging to different
regions may have different requirements.

29. Bases of Market Segmentation
For example, water might be scarce in some regions which inflates
the demand for bottled water but, at the same time, it might be in
abundance in other regions where the demand for the same is very
less. Eg: Chennai Region using bottled water for Family
Consumption

30. Bases of Market Segmentation
Demographic Segmentation
Demographic segmentation divides the market on the
basis of demographic variables like age, gender, marital
status, family size, income, religion, race, occupation,
nationality, etc. This is one of the most common
segmentation practice among marketers in India.

31. Bases of Market Segmentation
Demographic segmentation
is seen almost in every
industry like automobiles,
beauty products, mobile
phones, apparels, etc. and is
set on a premise that the
customers’ buying behaviour
is hugely influenced by their
demographics.
Eg. Biba Apparel

32. Bases of Market Segmentation
Behavioural Segmentation
The market is also segmented based on audience’s
behaviour, usage, preference, choices and decision
making. The segments are usually divided based on their
knowledge of the product and usage of the product.
It is believed that the knowledge of the product and its
use affect the buying decision of an individual.

33. Bases of Market Segmentation
Flipkart India & Amazon India both uses behavioral
segmentation based on the behavior of different consumers.
Its all based on your past purchases and browsing history, they
alter their approach to reach you to sell their products.
Occasions: Buyers can be grouped according to occasions
when they get idea to buy. This can help the company to build
up product usage. For example:- days like Father’s day /
Mother’s day / Valentine day increase the sale of chocolates,
flowers, cards and other gifts.

34. Bases of Market Segmentation
The audience can be segmented into…
• Those who know about the product,
• Those who don’t know about the product,
• Ex-users,
• Potential users,
• Current Users,
• First time users, etc.

35. Bases of Market Segmentation
With this assumptions … People can be labelled as
brand loyal, brand-neutral, or competitor loyal.
They can also be labelled according to their usage.
For example, a sports person may prefer an energy drink
as elementary (heavy user) and a not so sporty person
may buy it just because he likes the taste (light / medium
user). Eg. Bournvita Energy Drink

36. Bases of Market Segmentation
Psychographic Segmentation:
Psychographic Segmentation divides the audience on the
basis of their personality, lifestyle and attitude. This
segmentation process works on a premise that consumer
buying behaviour can be influenced by his personality
and lifestyle. Lifestyle is how a person lives his/her life.

37. Bases of Market Segmentation
A person having a lavish lifestyle may consider having an
air conditioner in every room as a need, whereas a
person living in the same city but having a conservative
lifestyle may consider it as a luxury!!

38. Bases of Market Segmentation
Cadbury India uses a combination of demographics,
psychographics, and behavior for their marketing.
For example, Cadbury Bournville and Temptations are
meant for higher-income groups / taste. On the other
hand, Cadbury Silk is meant for those who simply can’t
resist chocolates but can’t pay more.

40. Market Segmentation
Market segmentation allows companies to roll out
campaigns to target each group separately based on the
bases they have segmented.

41. TARGET MARKETING
Every company should evaluate and select target segments in
the following ways:
Evaluating market segments: In evaluating different market
segments, a company must look at the three following factors:
1. Segment size and growth.
2. Segment structural attractiveness – Different Mobile
segments
3. First the company must first collect and analyze data on
current segment sales, growth rates and expected
profitability for various segments.

42. TARGET MARKETING
Targeting (or target market selection) refers to:
An organization’s proactive selection of a suitable market
segment (or segments) with the intention of heavily focusing the
firm’s marketing offers and activities towards this group of related
consumers.
Positioning is:
Positioning is the target market’s perception of the product’s key
benefits and features, relative to the offerings of competitive
products.

43. TARGET MARKETING
•Step One – Define the
market…
•Step Two – Create market
segments
•Step Three – Evaluate the
segments for viability
•Step Four – Construct
segment profiles
•Step Five – Evaluate the
attractiveness of each segment
Step Six – Select target market/s
Step Seven –
Develop positioning strategy
Step Eight – Develop and
implement the marketing mix
Step Nine – Review performance

44. TARGET MARKETING
What is a Super Segment?
Super-segment is a set or combination of different market
divisions in an industry with similar traits.
In other words, the varied divisions have their unique
audience; but share certain similarities among them.
Example – Samsung, the cell phone industry has several
market segments, such as Smartphone, feature phone, basic
phone, etc.

45. POSITIONING
Positioning is the act of designing the company's offering and
image to occupy a distinct place in the mind of the target
market. The goal is to locate the brand in the minds of consumers to
maximize the potential benefit to the firm.
Positioning strategies revolve around four questions.
1. Who am I?
2. What am I?
3. For whom am I?
4. Why me?
Examples - Lifebuoy is Hygiene soap, while Liril is for Freshness. Lux
is a Beauty shop. Dettol is antiseptic. Maggi is good to eat and fast to
cook. McDonalds a family restaurant.

46. POSITIONING
•Errors in positioning : A firm should avoid following four types of major
positioning errors.
•Under-positioning: This happens when consumers do not know about
the brand.
•Over-positioning: It occurs when consumers have a narrow view of a
firm or its products. Example – Kellogg’s K is positioned for women who
want to become slim. It could also have been targeted for men too who
want to become slim.
•Confused positioning: This occurs when buyers have a confused
image of the product. Example – Tata Nano
•Doubtful positioning: This occurs when buyer doubt the claims made
by the firm.

47. POSITIONING
Niche Marketing:
A niche is a more narrowly defined customer group seeking a distinctive
mix of benefits within a segment…
It is identified by dividing a segment into sub segments…
Niche marketers understand their customer’s needs so well that
customers willingly pay a premium.
There is one important thing to understand that ‘niche’ does not exist, but
is created by smart marketing techniques and identifying what the
customer wants.
Eg: Raymond's in Clothing, Mercedes-Benz S-Class Maybach S650 in
Car

48. Mercedes-
Benz
S-Class
Maybach
S650

49. Thank You !!