This document discusses market segmentation and target marketing. It defines market segmentation as dividing a market into subgroups with distinct needs and characteristics that may require separate products or marketing mixes. The document outlines different levels of market segmentation from mass marketing to niche and individual marketing. It also discusses various bases for segmenting consumer markets, including geographic, demographic, psychographic, and behavioral factors. Finally, it covers strategies for evaluating and selecting target markets, such as undifferentiated, concentrated, and differentiated approaches.

1. TARGET MARKETING
TARGET MARKET
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2. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
At the end of this module the learning
outcomes are.
1. Why there is a need to segment
markets?
2. What are the various levels of
market segmentation?
3. What are bases for segmenting
consumer markets?
4. How the markets are targeted?
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3. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
SUGGESTED READINGS
1. Marketing Management by
Philip Kotler, chapter 9 &10th
edition.
2. Marketing Management by
Ramaswami and Namkumari,
Chapter 6.
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4. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
MARKET SEGMENTATION
The need
 Cannot serve all customers of this
universe.
 No company has that kind of resources.
 Customers
 Too numerous
 Diverse in their buying requirement
 Need to identify the market segments
that it can serve more effectively
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5. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
MARKET SEGMENTATION.
- The universe is heterogeneous.
- Divide the universe into market
segments, where buying or need
requirements is same i.e.
homogenous.
- Attack one or few market segments.
- This is target marketing.
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6. TARGET MARKETING
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Steps in the Targeting Process:
Market Segmentation
Market Targeting
Market Positioning

7. TARGET MARKETING
 Target marketing requires marketers to take three
major steps:
 Identify and profile distinct groups of buyers who differ
in their needs and preferences (market segmentation).
 Select one or more market segments to enter (market
targeting).
 For each target segment, establish and communicate
the key distinctive benefit(s) of the company’s market
offering (market positioning).
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8. MARKET Mass Marketing
SEGMENTATION AND SELECTING
TARGET MARKETS
 Seller engages in mass production.
 Mass distribution.
 Mass promotion of one product for all buyers.
Example
Coke in 60 & 70s,
 Sold in India
 One size 200 ml.
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9. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
Arguments for mass market.
 Creates largest potential market
 Leads to lower cost
 Lead to lower prices.
 Higher margins
Why criticised
 Market fragmentation
 Splintering of the market
 Mass media proliferation.
 Distribution channel proliferation
Difficult to practice “one size fits all’’ marketing.
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10. USING MARKET SEGMENTATION
TARGET MARKET
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Levels of Micromarketing
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11. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
MARKET SEGMENTATION LEVELS
1. Segment Marketing
 Consists of a large identifiable group within a market
with similar wants, purchasing power, attitudes or
buying habits
 Each segment’s buyers are assumed to be quite
similar in needs /wants
 No two buyers all alike
 Flexible market offerings
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12. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
Flexible market offering consists of two parts
1. Naked solution
- Consists of products and service
elements that all segment members
value
1. Options
- That some segment members value
- Each option carries additional prices.
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13. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
Example – Segment Marketing
Delta Airlines
· Economy Class passenger
- Seat
- Food
- Soft Drink
All of them – naked solution
· Charges extra
- Alcoholic beverages
- Earphones
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14. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
Segment marketing – benefits
- More fine tuned product
- Price it appropriately for the target
audience
- Fewer competitors
- Easier choice of
• Distribution channels
• Communication channels
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15. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
Niche marketing
- Narrowly defined group
- Needs are not well serviced
- Seeking a distinctive mix of benefits
- Fairly small market size
- Normally attract one or two players
- Customers willing to pay a
premium price.
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16. MARKET SEGMENTATION AND
SELECTING TARGET MARKETS
 1. High end designer wear like Gucci, Chanel,
Tarun Tahiliani etc.
 2. Automobiles like Ferrari, Maserati, Lamborghini
etc.
 WHAT IS A NICHE TODAY MAY BECOME A
SEGMENT TOMORROW AND VICE VERSA!!
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17. 2. Ostrichesonline.com
- Selling Ostrich derived products
- On line
- 2 million $ sales in 1998
- Visitors can buy
· Ostrich meat
· Feathers
· Leather jackets
· Videos
· Eggshells
· Skin care products derived from ostrich
· Body oil
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18. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
3. Local marketing
- Needs of local customer groups
Example Kraft Cheese
· Helps supermarket chains
· Identify cheese assortment and shelf
layout
· Optimise cheese sales in
- Low
- Middle
- High income stores
- Different ethnic groups
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19. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
4. Individual marketing
- Ultimate level of segmentation
- Segment of one.
- One-to-one marketing.
- Customised to individuals
- Tailor made
- Cobbler designed shoes.
- Customised industrial products
Use of new technologies
- Computers.
- Databases
Customised offering.
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20. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
Example
1. Dilip Chhabria -Designer cars
- Customised cars
- Small market
- About 500 a year
- Each car is unique, high prices
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21. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
Turning to Mass customisation
It is the ability to prepare on a mass basis
individually designed products and
communication to meet each
customer’s requirements.
Example.
Levi’s Jeans
- Customer measurements.
- Jeans ready in 8 hrs.
Mattel
Barbie com
Design your own Barbie doll.
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22. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
- Choose Doll’s
• Skin tone
• Eye colour
• Haircolor.
• Clothes
• Accessories
• Her likes and dislikes.
- When Barbie delivered.
• Doll’s name on the package
• Computer generated paragraph about her
personality
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23. USING MARKET SEGMENTATION
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Basic Market-Preference Patterns

24. USING MARKET SEGMENTATION
Needs-based Segmentation Process
 Segment
profitability
 Segment
positioning
 Needs-based
segmentation
 Segment
identification
 Segment
attractiveness
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Marketing-mix strategy 24

25. SEGMENTATION
Characteristics of Effective Segments
Measurable Actionable
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Substantial Accessible
Differentiable

26. SEGMENTING CONSUMER
MARKETS
 Nation or country
 State or region
 City or metro size
 Density
 Climate
Bases for Segmentation
 Geographic
 Demographic
 Psychographic
 Behavioral
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27. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
Example Geographic
Ford Ikon in India
1. World car
2. Changes for India
1. Higher suspension
2. Larger size air conditioner, higher ambient
temperature
3. Lower average speeds
4. Handle adulterated fuel
5. Petrol / diesel adulterated with kerosene
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28. SEGMENTING CONSUMER
MARKETS
 Age, race, gender
 Income, education
 Family size
 Family life cycle
 Occupation
 Religion, nationality
 Generation
 Social class
Bases for Segmentation
 Geographic
 Demographic
 Psychographic
 Behavioral
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29. SEGMENTING CONSUMER
MARKETS
 Lifestyle
 Activities
 Interests
 Opinions
 Personality
 Core values
Bases for Segmentation
 Geographic
 Demographic
 Psychographic
 Behavioral
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30. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
a. Lifestyle
Nestle Classic
- Pleasure of making coffee
· Adding milk, sugar, coffee in hot
milk
Nestle “3 in 1
- Office goers
- Paucity of time
- Espresso feeling
- Milk sugar coffee premixed
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31. b. Personality
- Targeting consumer personality
- Customer of Ford
 Independent
 Impulsive
 Masculine
 Alert to change
 Self confident
- Customers of Chevrolet
 Conservative.
 Thrifty
 Prestige.
 Conscious.
 Avoid extremes
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32. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
C. VALUES
Tourists to Disneyland
• Fun seekers
• Families visit
Tourists to Udayan child welfare unit at Kolkatta
• Stay and meet poor children
• Share thoughts
• Donate
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33. SEGMENTING CONSUMER
MARKETS
 Occasions
 Benefits
 User status
 Usage rate
 Loyalty status
 Buyer-readiness
 Attitude
Bases for Segmentation
 Geographic
 Demographic
 Psychographic
 Behavioral
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34. SEGMENTING CONSUMER
MARKETS
 Multi-attribute segmentation via
geoclustering combines multiple
variables to identify smaller, better-defined
target groups
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35. MARKET TARGETING STRATEGIES
 Evaluating and selecting market
segments requires assessing the
segment’s overall attractiveness in
light of company’s objectives and
resources.
 Five patterns of target market
selection can then be considered.
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36. MARKET TARGETING STRATEGIES
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Five Patterns of Target Market Selection

37. MARKET TARGETING STRATEGIES
 Targeting multiple segments may result
in cost economies
 Higher costs using differentiated
marketing include:
 Product modification cost
 Manufacturing cost
 Administrative cost
 Inventory cost
 Promotion cost
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38. For details and bookings contact:-
Parveen Kumar Chadha… THINK TANK
(Founder and C.E.O of Saxbee Consultants)
Email :-saxbeeconsultants@gmail.com
Mobile No. +91-9818308353
Address:-First Floor G-20(A), Kirti Nagar, New
Delhi India Postal Code-110015