This document discusses market segmentation and target marketing. It defines market segmentation as dividing the total heterogeneous market into homogeneous segments based on characteristics like geography, demographics, psychographics, and behavior. The key levels of segmentation discussed are mass marketing, segment marketing, niche marketing, local marketing, and individual marketing. Various bases for segmenting consumer markets like geography, demographics, psychographics, and behavior are also outlined. The document emphasizes that target marketing requires identifying segments, selecting target segments, and positioning the product to communicate benefits to the target segment.

1. TARGET MARKETING

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?

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.

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

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.

6. TARGET MARKETING
Steps in the Targeting Process:
Market Positioning
Market Targeting
Market Segmentation

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).

8. MARKET SEGMENTATION AND SELECTING
TARGET MARKETS
Mass Marketing
 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.

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.

10. USING MARKET SEGMENTATION
Segment Marketing
Niche Marketing
Local Marketing
Individual Marketing
Levels of Micromarketing

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

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
2. Options
- That some segment members value
- Each option carries additional prices.

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

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

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.

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!!

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

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

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.

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

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.

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

23. USING MARKET SEGMENTATION
Basic Market-Preference Patterns

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

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

26. SEGMENTING CONSUMER
MARKETS
Nation or country
State or region
City or metro size
Density
Climate
Bases for Segmentation
Geographic
Demographic
Psychographic
Behavioral

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

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

29. SEGMENTING CONSUMER
MARKETS
 Lifestyle
 Activities
 Interests
 Opinions
 Personality
 Core values
Bases for Segmentation
Geographic
Demographic
Psychographic
Behavioral

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

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

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

33. SEGMENTING CONSUMER
MARKETS
 Occasions
 Benefits
 User status
 Usage rate
 Loyalty status
 Buyer-readiness
 Attitude
Bases for Segmentation
Geographic
Demographic
Psychographic
Behavioral

34. SEGMENTING CONSUMER
MARKETS
Multi-attribute segmentation via
geoclustering combines multiple
variables to identify smaller, better-
defined target groups

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.

36. MARKET TARGETING STRATEGIES
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

38. For Details and Appointment contact:-
Parveen Kumar Chadha… THINK TANK
(Founder and C.E.O of Saxbee Consultants & Other-Mother
marketingandcommunicationconsultants.com)
Email :-saxbeeconsultants@gmail.com
Mobile No. +91-9818308353
Address:-First Floor G-20(A), Kirti Nagar, New Delhi India Postal Code-110015