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Market segmentation
- 1. Market Segmentation andTargeting Chandan Singh Dr. RPCAU, Pusa
- 2. Content • What issegmentation? • Criteria for effective segmentation • Importance of segmentation • Level of segmentation • Basis of market segmentation • Targeting • Targeting strategy
- 3. What is segmentation •Market segmentation involves grouping your various customers into segments that have common needs or will respond similarly to a marketing action. • A market segment is a subgroup of people or organizations that have one or more characteristics in common that cause them to have the same product needs. • Everyone needs water to drink, but does everyone need bottled water?
- 4. Measurable Some formof data should be available to measure the size of the market segment Substantial The market segment should be large enough, in terms of sales and profitability, to warrant the firm’s possible attention Accessible The market segment should be reachable, particularly in terms of distribution and communication Actionable/practical The firm needs to be able to implement a distinctive marketing mix for each market segment Responsive Each market segment should respond better to a distinct marketing mix, rather than a generic offering Stable so that its behavior in the future can be predicted with a sufficient degree of confidence. Criteria for effective segmentation
- 5. Target markets themain reason is to help identify potential target markets Market understanding helps managers to have a greater understanding of the marketplace, as they gain knowledge of differing consumer needs within the same market Marketing mix It is then easier to develop a marketing mix based upon the needs of a precise market Competitive position It can be easier to compete against existing firms by focusing upon a smaller, more defined, group of consumers New opportunities Creative approaches to market segmentation may generate new opportunities Avoid mass- marketing In today’s environment, it is generally quite difficult to be successful as a mass- marketer More offerings Firms are better able to position multiple products in the same overall market by defining and understanding multiple segments Niche marketing Some firms find success as niche marketers and this specialized approach becomes their basis of their competition advantage Importance of market segmentation
- 6. Level of segmentation •Segments: a large identifiable group within the market : • Niches: It is more narrowly defined group typically a small market which attract only a few customer. Ex: seed production – vegetable seeds – brinjal seeds flower production - ornamental flower - cut flower – rose
- 7. • Local marketing:it is related to the need and wants of local customer. the product may be promoted by developing an understanding of the place where the potential buyers congregate mostly and prefer to buy the product. Like: weekly hats or shandies, occasional mela ,nearest town or mobile van • Individual marketing: This is the ultimate level of segmentation its also known as one to one marketing.
- 8. Basis of marketsegmentation Demographic segmentationDemographic segmentation • Age: under 6,6-11, 12-19 , 20 -34, 50-60 , above 60 Ex:mik powder ,chocolate, fruit juices, kurkure, maggi ,potato chips drinks • Gender: male and female • Education : metric , graduate ,post graduate (internet marketing ) • Religion : Muslim , Hindu Christian ,other ( vegetarian non vegetarian)
- 10. • Occupation • Familysize: young , single, married no children , married with children • Income: Above rs 100000 Rs 75000-100000 Rs 50000-75000 Rs 25000-50000 Rs 25000 below Farmer Seed, fertilizer, harvester, tractor , pesticide, pump set Employee Pen, stationary item Doctor BP kit, medicines, syringes Animal husbandry Feed ,medicine ,consultancy
- 11. • Feeds productionCompany analyzes the profits, revenue and market size of each of its segments. Segment A (cattle) has profits of $500000 Segment B(fish farming) has profits of $350000 and Segment C(poultry) has profits of $200000. So, it decides to focus on Segment A, after confirming that the segment size is big enough and it's estimated to be worth $500000/year.)
- 12. Geographic segmentaion • Region:south , east , north, west • City: class 1 , class 2 , metros, cities with 1<>1 million population • Rural and urban: rural villages ,urban , semi urban and small town National market: it is a market which cover a whole nation or country Ex: india International :may divide on the basis of continent or countries. china , Nepal ,Japan
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- 15. Basis of marketsegmentation Behavioral segmentationBehavioral segmentation User status: non-users, ex-users, potential users, first-time users and regular users. Loyalty status 1.Hard-core loyal -consumer who buy only one brand all the time (nestle) 2.Split loyal -consumer who are loyal to two are three brands (bayer,syngenta,monsanto) 3.Shfting loyal-consumer who shift loyalty from one brand to another 4.swither-consumer who show no loyalty to any brand (poor or local consumer)
- 16. • Benefit: quality,service, economy, speed • Usage rate: light , medium, heavy • Occasions: • Attitude: negative and hostile attitude of customer chang e through provide different benefits Ex: Agro machinery (durability ,installment ,extra function) Religion Occasion/events Product Christian Muslim Hindu Good Friday, Easter ,Christmas Id-ul-fitr,bakri eid,muharram,ramadan Deepavali,holi ,vinayaka .chaturthi Flower, chocolate ,flowers Sweets, pickle,meat , dry fruits Milk , sweets , flowers,curd
- 17. Behaviour of consumeris a better guide to segment the market. • When do people buy? Occasion • Why do people buy? Benefits sought • do the people buy?once?more? User status • How much do the buy? Usage rate • Do the repeat the buy? Loyalty status • Why do the buy? Place ,retail outlet • What do the buy ? Product possessed
- 18. Psychographic segmentation Life style:culture oriented, sports oriented, outdoor oriented Personality: compulsive, gregarious, authoritarian ,ambitious Beef is avoided in the menu of McDonald’s he introduce the vegetarian burger such as Mc veggie burger and Mc aloo tikki burger. Halal meat is meat that is seen as permissible according to Islamic law .imported meat to Muslim country should have a certificate of Islamic org halal. Many hotel serve both jhatka and halal for Hindu and Sikhs
- 19. Targeting • Targeting involvesevaluating the various segment and selecting how many and which one to target . • Organization have three alternative strategy to suit their segmentation approach Segmentation Type of marketing strategy Zero mass Undifferentiated Substantial Segment differentiated Selective Niches Concentrated
- 20. Target Marketing Strategies Differentiated differentiatedmarket strategy used i to focus on two or more well defined market segments and want to develop different strategies for them. S.No Product Type Segmentation 1 Tractor 25-30 HP Marginal or small farmer 50 HP Large farmer 2 Oil 1 kg poor 2 kg Medium 5 kg High income
- 21. Target Marketing Strategies Undifferentiated Thisapproach views the market as one group with no individual segments. select one single product offer for all segments. Example: food grain , bean, urea
- 22. Target Marketing Strategies Concentrated •focusing on a single segment so you can concentrate on understanding the needs and wants of that particular market intimately. Ex: potato cultivator and harvester