Mm Segmentation and Targeting

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MARKET SEGMENTATION AND TARGETING

Transcript of Mm Segmentation and Targeting

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MARKET SEGMENTATION AND

TARGETING

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MARKETING SEGMENTATION :-MARKETING SEGMENTATION :- Market

Segmentation is the process of dividing a total market into distinct subset of consumers with relatively similar product needs.

MARKET SEGMENT:-MARKET SEGMENT:- A Market Segment

is a group of individuals or organizations that have relatively similar product needs.

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MASS MARKETING

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Ford’s Model T Followed a Mass Market Approach

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…and so did Hindustan Motors (Ambassador Cars) and Premier Automobiles (Fiat)

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ADVANTAGES OF MASS MARKETING

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Segment Marketing

Targeting a group of customerswho share a similar set ofneeds and wants.

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Basic Market Preference Patterns

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ADVANTAGES OF SEGMENTATION

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Four levels of Segmentation

Segments

Local areas Individuals

Niches

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Customerization

Combines operationally drivenmass customization with customizedmarketing in a way that empowersconsumers to design theproduct and service offeringof their choice.

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Examples of Market Customization

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MARKET SEGMENTATIONMARKET SEGMENTATION

Definition of Market

Identify AlternativeBases for Segmentation

Select best bases for Segmentation

Develop Marketing Mix for each tgt. Market

Develop Positioning for Target Segments

Identify & Select Market Segments

Process of Market

Segmentation

Positioning

Market Mix Development

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BASES FOR MARKET SEGMENTATIONBASES FOR MARKET SEGMENTATION

A) CHARACTERISTICS OF THE BUYER

1) Demographic

2) Geographic

3) Psychographic

B) RESPONSES ( BEHAVIOUR) OF BUYERS

1) Behavioural Segmentation

2) Benefit Segmentation

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Demographic Segmentation

Age and Life CycleAge and Life Cycle

Life StageLife Stage

GenderGender

IncomeIncome

GenerationGeneration

Social ClassSocial Class

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Psychographic Segmentation

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Psychographic Segmentation

AIO CLASSIFICATION (Attitudes, Interests and Opinions)

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The VALS Segmentation System

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Behavioral SegmentationDecision Roles Initiator Influencer Decider Buyer User

Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude

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BEHAVIOURAL SEGMENTATIONBEHAVIOURAL SEGMENTATION

* User Status:1. Non- Users (i) Exusers (ii) Potential users2. First Time Users3. Regular Users

* Usage Rate / LevelsUsers / Non-Users1. Users 2. Non Users (i) Heavy Users (i) Never Used (ii) Medium Users (ii) Lapsed users

(iii) Light Users (iv) Occasional Users

*Loyalty Status (1) Hardcore Loyals (2) Split Loyals (3) Shifting Loyals (4) Switchers

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Loyalty Status

Switchers

Shifting loyals

Split loyals

Hard-core

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Behavioral Segmentation Breakdown

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SEGMENTATION OF OUTBOUND SEGMENTATION OF OUTBOUND ( Leisure ) TRAVELLERS( Leisure ) TRAVELLERS

(1) The First Time Travellers: The first time travellers doing the Singapore or the Dubai Leg. Are often small time traders & first rung executives who prefer travelling in groups.

(2) The Second Time Travellers: The second time travellers who opt for westward bound packages- usually Europe or U.S . Prosperous traders, small industrialists & senior executives who prefer to chill out for 10-15 days in Europe & U.S.

(3) The Frequent Travellers : The frequent travellers who go for individual planned tours & opt for longer stays.

(4) Super –Premium Travellers: Super-Premium travellers who choose non-typical destinations & luxury accommodation.

The (3) & (4) categories are senior executive top Businessmen industrialists who

are divided into two categories a) Apartment tourists b) Royals ( Mediterranean villa / A tour of

Canadian Rockies; Ship cruises etc)

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BENEFIT SEGMENTATIONBENEFIT SEGMENTATION

Example : Benefit Segmentation in Toothpaste Market

Segment Benefit Sought Other Characteristics

1) Sensory Flavor + Product Usually Children segment appearance

2) Social Sound, bright teeth Outgoing & active, segment + freshness of breath young.

(sometimesalso smokers)

3) Worrier Decay Prevention Heavy Users; Family segment

4) Independent Low Prices Predominantly male; / Economy Little Loyalty; buy segment brand on offer.

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Segment Benefit Airline Focus Sought Product Element

Economy Travel at Airplane (T) TransportationTravellers Low cost Transportation

Business Convenient Service Schedule (I) Service Professionals Timings Schedule

Tourists Convenience in Preflight Services (I) Transportation

Pre-flight & Post Flight help (I) Pre & Post Postflight Flight Services arrangements

Dignitarks Exquisite Comfort & Customer Food, Rich Class travel Care (I) Beverages,

Extras

Cargo Punctuality Pre-Post

High Facilities

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1. Measurability: Can you identify the segment? Need for

combination of concrete (e.g.. age) & abstract descriptors.

2. Accessibility:Can you reach the segment through advertising,

sales force or distributors, transportation and warehousing? Segments defined to facilitate targeting of marketing efforts. Segmentation variables must identify members in ways that facilitate their contact.

3. Different response: Segments must respond differently to one or

more marketing variables. Segmentation variables must maximize behavioral differences between segments.

4. Substantiality:Is the segment large enough to bother with?

Sufficient potential customers in each segment involves trade-offs between customer homogeneity & scale effects.

REQUIREMENTS FOR EFFECTIVE REQUIREMENTS FOR EFFECTIVE SEGMENTATIONSEGMENTATION

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EVALUATION OF MARKET SEGMENTSEVALUATION OF MARKET SEGMENTS

1) Sales Estimate for the Segment

i)Market Potential

ii) Company Sales Potential

2) Growth Expected

3) Characteristics of Segment

I) Competitive Assessment

ii) Threat of Substitute Products

iii) Buyer’s Bargaining power

iv) Supplier’s Bargaining Power

4) Company’s Objective Resources

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ALTERNATIVE APPROACHES TO TARGET ALTERNATIVE APPROACHES TO TARGET MARKET SELECTIONMARKET SELECTION

Marketing Mix

UNDIFFERENTIATED MARKET

UndifferentiatedMarket

DIFFERENTIATED MARKET

Segment 1Segment 2Segment 3Segment4

Company

Customers

Company

Company

Customers

Customers

Marketing Mix

Segment 1Segment 2Segment 3Segment4Segment 5

Mktg. Mix 1Mktg. Mix 2Mktg. Mix 3Mktg. Mix 4Mktg. Mix 5

CONCENTRATED MARKET

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Undifferentiated Targeting Strategy :

Marketing strategy to produce only one product and market it to all customers using a single marketing mix.

Concentrated Targeting Strategy :

A targeting strategy used to select one segment of a market for targeting marketing efforts.

Differentiated Marketing :

A strategy that chooses two or more well-defined market segment & develops a distinct marketing mix for each.

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STRATEGIES FOR REACHING TARGET MARKETSSTRATEGIES FOR REACHING TARGET MARKETS

Targeting Strategy

Advantages Disadvantages

Undifferentiated Targeting

Potential savings on prod./ Mktg. Costs

• Unimaginative• product offering

ConcentratedTargeting

Concentration of resourcesCan better meet needs of a narrowly defined segmentAllows small firms to compete with larger firms Strong positioning

Segment to small or changing

DifferentiatedTargeting

Greater sales revenues

Better meet needs of various segments (vs. Undifferentiated targeting.

. High Costs

. Cannibalization

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Patterns of Target Market Selection

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Patterns of Target Market Selection

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Patterns of Target Market Selection

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Segment-by-Segment Invasion Plan

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Segmenting for Business Markets

DemographicDemographic

Operating VariableOperating Variable

Purchasing ApproachesPurchasing Approaches

Situational FactorsSituational Factors

PersonalCharacteristicsPersonalCharacteristics

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Marketing Debate

Is mass marketing dead?

Take a position:1. Mass marketing is dead.2. Mass marketing is still a viable wayto build a profitable brand.

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Marketing Discussion

How would you classify yourself interms of the various segmentationschemes?