The Starting Point
• Mass Marketing:The Seller engages in –
1.Mass marketing>mass production>mass distribution>and mass promotion
ONE PRODUCT FO ALL BUYERS.It creates the largest potential market>leads to
lower costs>lower prices>higher margins
2
Segment Marketing
• Role of Marketer
• The marketer does not create the segments
• The marketer identifies the segments and decide which one to target
• The company can better design>price>disclose& deliver the product to satisfy the target market.
3
4
• Effective use of resources
• Gain a focus
• Create Value for a target market
• Positioning
Benefits of Segmentation
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Steps in Market Segmentation, Targeting, and Positioning
Market Segmentation
1. Identify bases for segmenting the market2. Develop segment profilesMarket Targeting
3. Develop measure of segment attractiveness4. Select target segments
Market Positioning
5. Develop positioning for target segments6. Develop a marketing mix for each segment
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Step 1. Market SegmentationLevels of Market Segmentation
Through Market Segmentation, Companies Divide Large, Heterogeneous Markets into Smaller Segments that Can be Reached
More Efficiently And Effectively With Products and Services That Match Their Unique Needs.
Mass MarketingSame product to all consumers
(no segmentation, i. e. a commodity)
Segment MarketingDifferent products to one or more segments
(some segmentation, i.e. Thumsup)
Steps in Market Segmentation, Targeting, and Positioning
1. Identifysegmentationvariables andsegment themarket
2. Develop profiles ofresultingsegments
MarketSegmentation
3. Evaluateattractivenessof eachsegment
4. Select thetargetsegment(s)
MarketTargeting
5. Identifypossible
positioningconcepts foreach target
segment
6. Select,develop, andcommunicate
the chosenpositioning
concept
MarketPositioning
Basic Market-Preference Patterns
(a) Homogeneous(a) Homogeneouspreferencespreferences
SweetnessSweetness
Cre
amin
ess
Cre
amin
ess
(c) Clustered(c) Clusteredpreferencespreferences
Cre
amin
ess
Cre
amin
ess
SweetnessSweetness
(b) Diffused(b) Diffusedpreferencespreferences
Cre
amin
ess
Cre
amin
ess
SweetnessSweetness
Step 2. Market SegmentationLevels of Market Segmentation
Mass MarketingSame product to all consumers
(no segmentation)
Mass MarketingSame product to all consumers
(no segmentation)
Segment MarketingDifferent products to one or more segments
(some segmentation)
Segment MarketingDifferent products to one or more segments
(some segmentation)
MicromarketingProducts to suit the tastes of individuals and locations
(complete segmentation)
MicromarketingProducts to suit the tastes of individuals and locations
(complete segmentation)
Niche MarketingDifferent products to subgroups within segments
(more segmentation)
Niche MarketingDifferent products to subgroups within segments
(more segmentation)
Local Marketing
Tailoring brands/ promotions to local customer groups
Individual Marketing
Tailoring products/ programs to individual customers
Bases for Segmenting Consumer Markets
Occasions, Benefits, Uses, or Attitudes
Behavioral
GeographicRegion, City or MetroSize, Density, Climate Demographic
Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ...
Lifestyle or PersonalityPsychographic
Step 4. Market SegmentationBases for Segmenting Business Markets
Basesfor Segmenting
BusinessMarkets
Basesfor Segmenting
BusinessMarkets
DemographicsPersonalCharacteristics
SituationalFactors
OperatingCharacteristics
PurchasingApproaches
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Step 5. Market SegmentationDemographic Segmentation
• Dividing the market into groups based on variables such as:– Age– Gender– Family size or life cycle– Income– Occupation– Education– Religion– Race– Generation– Nationality
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Step 6. Market SegmentationPsychographic Segmentation
Divides Buyers Into Different Groups Based on:
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Step 7. Market SegmentationBehavioral Segmentation
• Dividing the market into groups based on variables such as:
– Occasions
– Benefits
– User status
– Usage rate
– Loyalty status
– Readiness stage
– Attitude toward product
Behavioral Bases
• User Status & Brand Loyalty
• Personality/Lifestyle• Social Class
• Occasion• Readiness to Buy• Benefits Sought• Usage Rate
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Step 8. Market SegmentationSegments must respond differently to different marketing mix
elements & programs
Requirements for effective segmentation
Step 8. Market SegmentationSegments must respond differently to different marketing mix
elements & programs
Requirements for effective segmentation
• Size, purchasing power, profiles of segments can be measured.
• Segments can be effectively reached and served.
• Segments are large or profitable enough to serve.
Measurable Measurable
AccessibleAccessible
SubstantialSubstantial
ActionableActionable
• Effective programs can be designed to attract and serve the segments.
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Evaluating Market Segments
• Segment size and growth
• Segment structural attractiveness
• Company objectives and resources
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Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing Mix 1
CompanyMarketing Mix 1
CompanyMarketing Mix 2
CompanyMarketing Mix 2
CompanyMarketing Mix 3
CompanyMarketing Mix 3
MarketMarket
A. Undifferentiated Marketing
B. Differentiated Marketing
C. Concentrated Marketing
Step 9. Market TargetingMarket Coverage Strategies
Step 10. Market TargetingEvaluating Market Segments
Segment Size and GrowthAnalyze sales, growth rates and expected profitability for various segments.
Segment Structural Attractiveness Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers.
Company Objectives and ResourcesCompany skills & resources relative to the segment(s).Look for Competitive Advantages.
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Choosing a market-coverage strategy
• Company resources • Degree of product homogeneity• Market homogeneity• Competitors’ strategies
Five Patterns of Target Market Selection
Single-segmentconcentration
Productspecialization
M1 M2 M3 P1
P2
P3
Selectivespecialization
M1 M2 M3 P1
P2
P3
M1 M2 M3
Full marketcoverage
P1
P2
P3
Marketspecialization
M1 M2 M3 P1
P2
P3
P1
P2
P3
M1 M2 M3
P = ProductM = Market
Step 11. Market TargetingChoosing a Market-Coverage
StrategyCompany Resources
ProductVariability
Product’s Life-Cycle Stage
Market Variability
Competitors’Marketing Strategies
Positioning is the act of designing the company’s
offering and image to occupy a distinctive
place in the the target market’s mind.
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• Product’s PositionProduct’s Position - the way the product is defined by consumers on important attributes - the place the product occupies in consumers’ minds relative to competing products.
Marketers must:–Plan positions to give their products the
greatest advantage in selected target markets
Step 12: Positioning for Competitive Advantage
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Positioning Strategies
• Positioning by specific product attributes• Positioning by benefits• Positioning for user category• Positioning for usage occasion• Positioning against another competitors• Positioning against another product class
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• Step 1. Identifying Possible Competitive Advantages: Competitive Differentiation.
• Step 2. Selecting the Right Competitive Advantage: Unique Selling Proposition (USP).
• Step 3. Communicating and Delivering the Chosen Position.
Steps to Choosing and Implementing a Positioning Strategy
The BCG CompetitiveAdvantage Matrix
Volume
FragmentedStalemated
Specialized
Siz
e o
f th
e A
dva
nta
ge
SmallSmall
LargeLarge
Number of Approachesto Achieve Advantage
FewFew ManyMany
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Product Differentiation
• Physical attributes
• Service differentiation
• Personnel differentiation
• Location
• Image differentiation
Product Differentiation
FormFea-
turesPerfor-mance
QualityConform-
anceQuality
Dura-bility
Relia-bility
Repair-ability
Style Design
DeliveryDelivery
Services Differentiation
OrderingEase
OrderingEase
Maintenance& Repair
Maintenance& Repair
CustomerTraining
CustomerTraining
InstallationInstallation CustomerConsulting
CustomerConsulting
Miscellan
eou
sS
ervices
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Which differences to promote?
• Important to customers• Distinctive• Superior • Communicable to customers• Preemptive• Affordable• Profitable
Differences WorthDifferences WorthEstablishingEstablishing
AffordableAffordable SuperiorSuperior
ProfitableProfitable
PreemptivePreemptive
DistinctiveDistinctive
ImportantImportant
Positioning Strategies
• Product Attributes
• Benefits, Problem Solutions & Basic Needs•Cholesterol Free Oil:Dhara•
•Price & Quality
• Specific Use : Gift for all Events Titan
• Against Other Products: Tata salt Vs. Captain Cook
• Product User :Fashion loving , Well to do Consumers :Vimal fabrics • Against a Competitor