BASICS OF MARKETING - Unit-2- Osmania University, Market Segmentation, Target Market and Product Positioning: Levels of Market Segmentation, Bases for Segmenting Consumer Markets, Bases for Segmenting Industrial Markets. Target Market and Product Positioning Tools.

1. BASICS OF
MARKETIN
G
UNIT-2
PRESENTED BY

2. UNIT - II
Market Segmentation, Target Market and Product
Positioning: Levels of Market Segmentation, Bases
for Segmenting Consumer Markets, Bases for
Segmenting Industrial Markets. Target Market and
Product Positioning Tools.

3. Mass Marketing
 The term mass market refers to a large, undifferentiated
market of consumers with widely varied backgrounds.
 Products and services needed by almost every member of
society are suited for the mass market. Such items as
electric and gas utilities, soap, paper towels and gasoline,
for example, can be advertised and sold to almost anyone,
making them mass market goods.
 An attempt to appeal to an entire market with one basic
marketing strategy utilizing mass distribution and mass
media.

4. Product Variety
 After the mass marketing strategy another strategy
with similar characteristics but overcoming its
predecessor’s shortcomings came into existence.
That is product variety strategy.
 An attempt to appeal to the entire market with a
huge variety of products produced in mass is
made.
 However, like Mass marketing in this case also the
customers needs & wants are not taken into
account while developing the product.

5. Target Marketing
Target marketing is particularly effective for
small companies with limited resources
because it enables the company to achieve a
strong market position in the specific market
segment it serves without mass production,
mass distribution, or mass advertising.
It enables firms to capitalize on the
respective serve market share

6. Niche Marketing:
 A company might create a niche market and develop
highly specialized products or services to meet the
customers’ needs that aren't being met by other offerings.
 The seller caters to a very specific market segment
which requires more and very high quality of services.
Customized Marketing:
A type of marketing method whereby an
advertiser tries to customize the message to the
unique needs of a specific customer or specific
subset of customers. Custom marketing is
usually targeted toward a high net worth niche.

7. Requirements of Market Segments
In addition to having different needs, for
segments to be practical they should be
evaluated against the following criteria:
Identifiable: The differentiating attributes of
the segments must be measurable so that
they can be identified.

8.  Accessible: The segments must be reachable through
communication and distribution channels.
 Measurable: It has to be possible to determine the values
of the variables used for segmentation with justifiable
efforts. This is important especially for demographic and
geographic variables.
 For an organization with direct sales (without
intermediaries), the own customer database could deliver
valuable information on buying behaviour (frequency,
volume, product groups, mode of payment etc).

9. Substantial: The segments should be
sufficiently large to justify the resources
required to target them.
Unique needs: To justify separate offerings,
the segments must respond differently to the
different marketing mixes.
Durable: The segments should be relatively
stable to minimize the cost of frequent
changes.

10. ‘Market Segmentation’
Market Segmentation is the sub-
dividing of customers into homogenous
sub-set of customers where any sub-set
may conceivably selected as market
target to be reached with distinct
Marketing Mix – Philip Kotler

11. Segmentation is essentially the identification
of subsets of buyers within a market that
share similar needs and demonstrate similar
buyer behaviour.
 Segmentation aims to match groups of
purchasers with the same set of needs and
buyer behaviour. Such a group is known as a
'segment‘.

12. The process of defining and subdividing
a large homogenous market into clearly
identifiable segments having similar
needs, wants, or demand characteristics
is called Segmentation.

13. BASES FOR SEGMENTING
CONSUMER MARKETS
• Group characteristics—such as age, gender, geographic
location, income, and buying patterns—are key.
• Four common bases for segmenting consumer markets:
• Geographic segmentation.
• Demographic segmentation.
• Psychographic segmentation.
• Product-related segmentation.

14. GEOGRAPHIC SEGMENTATION
•Division of an overall market into homogenous
groups based on their locations.
• Pay close attention to areas with overall large
population and quickly growing populations.
• Government now classifies urban data in
several categories based population size and
characteristics.

15. DEMOGRAPHIC SEGMENTATION
•Division of an overall market into homogenous
groups based on variables such as gender, age,
income, occupation, education, household size, and
stage in the family life cycle; also called Socio-
Economic Segmentation.
SEGMENTING BY GENDER
• Working women who regularly use the Internet
make most of the decisions about retail items,
healthcare goods and services, and fitness products.

16. SEGMENTING BY AGE
• The cohort effect—tendency of generation members to be influenced
and bound together by significant events in their formative years, ages 17
to 22.
• School-age children—have significant influence over family
purchases.
• Generation X—family-oriented, well educated, and optimistic.
• Baby boomers(People born between the end of World War 2 (1945) and the late
1960s)— lucrative, diverse segment that generally tends to value health
and quality of life.
• Seniors—heads of households more than 55 years old control about
three-quarters of the country’s total assets.

17. SEGMENTING BY FAMILY LIFE CYCLE STAGES
• Family life cycle—the process of family formation
and dissolution.
• Life stage, not age, is primary concern of marketer.
SEGMENTING BY HOUSEHOLD TYPE
• Households vary by life stage and the presence or
absence of children.

18. SEGMENTING BY INCOME AND
EXPENDITURE PATTERNS
• As household income increases,
• Smaller percentage of expenditures goes
for food
• Spending on housing, household
operations, and clothing remains constant.
• The percentage spent on other items
increases.

19. PSYCHOGRAPHIC SEGMENTATION
Division of a population into groups that have
similar psychological characteristics, values, and
lifestyles.

20. THE MARKET SEGMENTATION
PROCESS
DEVELOPA RELEVANT PROFILE FOR EACH SEGMENT
• In-depth analysis that helps managers accurately match buyers’ needs
with the firm’s offerings.
FORECAST MARKET POTENTIAL
• Sets upper limit on potential demand and maximum sales potential.
FORECAST PROBABLE MARKET SHARE
• Comes from analysis of competitors’ market position and development
of marketing strategy.
SELECT SPECIFIC MARKET SEGMENTS
• Use demand forecasts and cost projections to determine return on
investment from each segment.
• Assesses nonfinancial factors such as firm’s ability to launch product.

21. Bases for Segmenting
Industrial Markets

33. Marketing Mix