Market Segmentation PDF

MARKET SEGMENTATION LEARNING OBJECTIVES: TO LEARN WHAT IS MARKETING AND THE MEANING OF MARKET SEGMENTATION TO UNDERSTAND THE IMPORTANCE OF SEGMENTING A MARKET TO IDENTIFY THE WAYS A MARKET CAN BE SEGMENTED Marketing and Market Segmentation GEOGRAPHIC SEGMENTATION An ice cream company...

MARKET SEGMENTATION LEARNING OBJECTIVES: TO LEARN WHAT IS MARKETING AND THE MEANING OF MARKET SEGMENTATION TO UNDERSTAND THE IMPORTANCE OF SEGMENTING A MARKET TO IDENTIFY THE WAYS A MARKET CAN BE SEGMENTED Marketing and Market Segmentation GEOGRAPHIC SEGMENTATION An ice cream company segmenting a country and targets those specific areas that are hottest and therefore more likely to buy ice cream. Swimwear brands that are targeted for hot areas with beaches and similarly, raincoats for areas that experience excessive rainfall. Woolen clothes are extensively used in places that experience extreme winter. Demographic Segmentation ❖Children and teenagers may prefer fast food or snack foods, while older adults may prefer healthier options or more traditional meals. ❖Gender is another important demographic factor that can influence dining and food preferences. ❖A fashion brand that targets young women with high disposable income might offer trendy, premium, and exclusive products, while a brand that targets families with children might offer durable, affordable, and practical products. Psychographic Segmentation ❖Psychographic segmentation categorizes consumers into groups based on psychological factors influencing their buying behavior, personality, values, beliefs lifestyle, attitudes, interests, activities, and social class. ❖Zara targets consumers who prioritize fashion trends and appreciate swift style changes. ❖Nike focuses on the people who enjoy engaging in sports. ❖Netflix uses psychographic segmentation to recommend content to its users. By analyzing viewing habits, preferences, and user ratings, they create personalized content suggestions. Behavioral Segmentation ❖Occasion: Rewards on birthdays, anniversaries, purchasing for a vacation etc ❖User Status: Non users, Regular users, First time buyers, Defectors ❖Customer loyalty: Loyalty is based on the usage, rewards and benefits. ❖Benefits sought: Customers researches on the benefits like the benefits of a shampoo. ❖Examples: Frequent flyers, Tooth paste IMPORTANCE OF SEGMENTATION ►1. Improved customer relations ►2. Perfect-like marketing mix ►3. Better resource allocation ►4. Focus marketing Communication ►5. Taking care of dynamic environment ►6. Competitor Analysis ►7. Measurements Q&A 1. What is Market Segmentation 2. What is a particular market segment at the which the business aims its product called? 3. How is a market segmented based on lifestyle? 4. How is a market segmented based on location? 5. An internal travel agent sells tickets for ‘round the world’ cruises. Who is his targeted market? 6. What is the disadvantage of using market segmentation? 7. What does demographic mean? ACTIVITY ► Scenario: You are the marketing manager of a company that produces premium organic skincare products. Your company wants to expand its market reach and increase sales. The products are priced higher than conventional skincare products due to their superior quality and organic ingredients. Your task is to identify potential market segments and develop targeted marketing strategies to reach them effectively. TARGETING  TYPES OF TARGETING ► 1. Mass Marketing or undifferentiated marketing Mass marketing is a marketing strategy in which a firm decides to ignore market segment differences and appeal the whole market with one offer or one strategy, which supports the idea of broadcasting a message that will reach the largest number of people possible ► 2. Large Segment Strategy or Concentrated targeting When a market is segmented and marketing resources are limited, the marketer may decide to pursue a large segment strategy. A mass market may be segmented say into three core segments. It can called as Concentrated Targeting or Niche Strategy. ► 3. Adjacent Segment Strategy When a single segment focus has reached the point of full market penetration and after a single-market segment successful, the marketer opts for adjacent marketing strategy, a closely related segment is tackled next. ► 4. Multi Segment Strategy or Differentiated Strategy Market segmentation opens the door to multiple market based strategies and greater marketing efficiency. For example in case of a power supplier, the segments may include domestic users, government users, commercial establishments, factories, occasional users, etc. The power supplier would serve all the segments at the same time. ►5. Small Segment Strategy A small segment strategy in business is when a company focuses its efforts on serving a very specific group of customers with distinct needs and preferences. This approach allows the company to differentiate itself from competitors and build strong relationships with its target customers, often leading to greater customer loyalty and profitability. ► 6. Niche Marketing The word niche itself implies that one is targeting a limited number of consumers or a particular set of customers. Niche segment consists of sufficient number of customers seeking somewhat specialised benefits from a good or service. This strategy would avoid direct competition with larger firms who are pursuing bigger segments. ► 7. Sub segment Strategy If there are meaningful differences in customer needs within segments which are presently not being met by current market segmentation, then there is need for possible sub-segmentation  POSITIONING ► Positioning in marketing refers to how a company or brand presents itself in the minds of consumers relative to competitors. ► In simpler words, positioning answers the question: "How do consumers perceive my brand compared to others?" ► It involves defining your unique value, benefits, and characteristics that make your offering desirable and relevant to your target audience. ► Effective positioning helps consumers understand why they should choose your brand over others, based on the specific needs and preferences you aim to fulfill.  POSITIONING PROCESS 1. Competitive products 2. Determinant Attributes - Price, Quality, convenience 3. Information from potential customers 4. Determine product’s current location (positioning) in the product space and intensity thereof 5. Customers’ most preferred combination of determinant attributes. 6. Fit between preferences of market segments and current position of product (market positioning) 7. Positioning statement  BASES OF POSITIONING Positioning concerns arranging for a product or brand to occupy a clear, distinctive, and desirable place – relative to competitors’ positioning in the minds of targeted consumers or business customers. 1. Attributes – e-bay, “Buy it, Sell it. Love it.” 2. Price/quality – Omega watches, “We measure the 100th second that separates winning from taking part.” 3. Product class – BMW, the “ultimate driving machine.” 4. Completeness – Raymond’s “complete man”. 5. Vistara Airlines - It will be the first airline to offer premium economy seating and value for frequent flyers.