This document discusses market segmentation strategies for marketing financial products. It defines market segmentation as dividing a market into homogeneous subgroups with distinct needs and behaviors. The key points made are: 1) Market segmentation allows tailoring of products and marketing strategies to specific customer segments. 2) Effective segmentation criteria include demographics, behaviors, and geographic factors. 3) The STP approach involves segmenting the market, targeting specific segments, and positioning products for those segments.

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Lecture - 3
Parveen Sharma
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MoFP for
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Marketing of
Financial
Products

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Contents
Market Segmentation
 The Concept
 Significance of Market Segmentation
 Segmentation Strategy
 Criteria for Segmentation
 Requirements For Effective Segmentation
 Limitation to Segmentation
 Targeting & Positioning
 STP Steps
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 All customers have their likes & dislikes but they possess some
element of uniqueness
 FI’s need to satisfy different customer of rural – urban, small sized –
large sized, low income high income etc.
 Satisfaction of customer needs and wants has prime focus in
marketing but it is not easy task as we cannot use same marketing
strategy for all.
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Market Segmentation – The concept
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 ‘Market segmentation is the sub-division of a market into homogenous
subsets of customers where any subset may be selected on a market
target to be reached with a distinct marketing mix’.(Philip Kotler)
 Segmentation is a device to…
…formulating a sound marketing mix
…identify level of expectations of segments
…to be proactive and increase profitability
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Market Segmentation – The concept
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 Small is beautiful
 Small is identifiable
 Divide and rule
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Market Segmentation – The concept
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Significance of Market Segmentation
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 Design product-line parallel to demands of market
 To catch first sign of major trend
 To design companies advertising appeal
 To understand market and customers
 To formulate sound marketing strategy
 To achieve organizational goals faster and to utilize resources optimally.
 Differentiating from competition
 Becoming less sensitive to the price competition
 Direct appropriate amount of attention to respective segments
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Basic Approach of Segmentation
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 One(Products) to One(Segments)
 One(Products) to Many(Segments)
 Many(Products) to Many(Segments)
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Segmentation Strategy
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 Mass Marketing or Undifferentiated Strategy
(Generally most competitive and least profitable)
 Selective Marketing or Differentiated Strategy
(More focused, expensive and increased profitability)
 Concentrated or Niche Marketing
(Small segment but most profitable)
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Criteria for Segmentation
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 Segmenting Consumer
Markets
 Segmenting Business
Markets
 Segmenting
International Markets
• Geographic segments
(Distance, Region, Terrain, Density etc)
– Marketing mixes customized
geographically
• Demographic segmentation
(Age, Gender, Family Life Cycle, Income,
Occupation, Education etc)
– Most popular type
– Demographics are closely related to
needs and wants
• Psychographic segmentation
(Lifestyle, Values and personality-based
segmentation)
– Birds of same feather flock together
• Behavioral segmentation
(Benefits, Loyalty, Usage Rate, Buyers
Readiness)
Key Topics

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Criteria for Segmentation
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Criteria for Segmentation
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 Segmenting Consumer
Markets
 Segmenting Business
Markets
 Segmenting
International Markets
• Demographic segmentation
– Industry, company size, location
• Operating variables
– Technology, usage status,
customer capabilities
• Purchasing approaches
• Situational factors
– Urgency, specific application, size
of order
• Personal characteristics
– Buyer-seller similarity, attitudes
toward risk, loyalty
Key Topics

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Segmentation Variables for Business Markets
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Criteria for Segmentation
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Criteria for Segmentation
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 Segmenting Consumer
Markets
 Segmenting Business
Markets
 Segmenting
International Markets
• Geographic segmentation
– Location or region
• Economic factors
– Population income or level of
economic development
• Political and legal factors
– Type / stability of government,
monetary regulations, amount of
bureaucracy, etc
• Cultural factors
– Language, religion, values,
attitudes, customs, behavioral
patterns
Key Topics

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Criteria for Segmentation
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Requirements For Effective Segmentation
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 Measurable
– Size, purchasing power, and profile of segment
 Accessible
– Can be reached
 Substantial
– Large and profitable enough to serve
 Differentiable
– Respond differently
 Actionable
– Effective programs can be developed

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Limitations of segmentation
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 Lack of information and data
 Difficulty in measuring and predicting consumer behavior
 Hard to reach customer segments once identified

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Targeting & Positioning
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Targeting
Market targeting is a process of evaluating each market segment’s
attractiveness and selecting one or more segments to enter
Positioning
Creating an identity in the minds of target market
Structural
AttractivenessSize & Growth
Company
Resources &
Objective

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STP: Steps
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 Identify basis of segmenting the market
 Develop profile of resulting segments
 Develop measures of segments attractiveness
 Select the target segments
 Develop positioning for each target segment
 Develop marketing mix for each target segment
Segmentation
Targeting
Positioning

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? ueriesQ
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Contact me @ +91-9050050288
or
Email to parveen_72@yahoo.in

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Term for the Lecture
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Biogenic & Psychogenic needs
Cognition & Perception

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Thank
You
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