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7/30/2019 6. Mm Module - 4m
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Amity Business School
Process of Segmentation
1. Survey
2. Formation of segments
3. Customer profile
4. Analysis & Evaluation
5. Selection of target markets
EFFECTIVE SEGMENTATION
Measurable Substantial Accessible
Differentiation Actionable
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PATTERNS OF
MARKET SEGMENTATION
1. Based on PREFERENCESHOMOGENOUS DIFFUSED CLUSTEREDNo branding Many brand Mkt for shoes, cars,
is based ondifferent attributes.
2. NEED BASED MARKET SEGMENTATION
MARKET PARTITIONING : Hierarchy of attributes consumer follow inchoosing a brand. Eg : Washing powder
NEED Cheap Moderate Expensive
SIZE Small Medium Large Super large Family Pack
BRAND Local Dealer Surf Surf Excel Ariel Nirma
FORMS Bar Cake Powder Liquid
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1. Manufacturing the product with the market demand.
2. Working for economic functioning.
3. Tapping opportunity and doing away with the threat.
4. Enables the company for appropriate marketing mix.
5. Overall monitoring of all marketing operations.
6. Increased sales & market share.
7. Providing growth opportunities to smaller firm.
8. Improving the products.
Significance ofSEGMENTATION
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SEGMENTING
CONSUMER MARKET
GEOGRAPHIC SEGMENTATION : Nations, states, regions, countries,cities or neighborhood.
DEMOGRAPHIC SEGMENTATION : Based on age, family size, family lifecycle, gender, income, occupation, education, religion, race, generation,
nationality & social class.PSYCHOGRAPHIC SEGMENTATION: Based on Lifestyle, value &personality.
BEHAVIORAL SEGMENTATION: On basis of decision roles, occasions,benefits, user status, usage rate loyalty status, readiness stage, attitude
towards product.MULTI-ATTRIBUTE SEGMENTATION (GEOCLUSTERING): Combiningseveral variables for identifying smaller better defined target group.
TARGETING MULTIPLE SEGMENTS
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Amity Business SchoolBENEFITSMOBIL Classifications
1. Road Warriors: 16% (Premium Products & Quality)
2. Generations F: 27% Fast
3. True Blues: 16% Branded
4. Home Bodies: 21 % Convenience
5. Price Shoppers: 20% Low Price
LOYALITY [Competition Based Segmentation]
1. Hard-Core Loyal
2. Split loyals
3. Shifting loyals
4. Switchers
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Psychographic Segmentation(Psychology +Demographics)
SRI Consulting Business Intelligence (SRIC-BI) VALS TM
Based on responses derived from questionnaire featuring 4demographic and 35 attitudinal questions. 80,000 surveys per year.
INNOVATORS High ResourcesHigh Innovation
Ideals Achievement Self-Expression
Thinkers Achievers Experiences
Believers Strivers Makers
SURVIVORS Low Resources
Low Innovation
PrimaryMotivation
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Product-Related SegmentationDividing a consumer population intohomogeneous groups based oncharacteristics of their relationships to
the product Can take the form of segmenting based on:
Benefits that people seek when they buy
Usage rates for a product
Consumers brand loyalty toward a product
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Benefits Focuses on the attributes that people seek in a good
or service and the benefits that they expect to receivefrom that good or service
Groups consumers into segments based on what
they want a product to do for them
Usage Rates
Segmenting by grouping people according to the
amounts of a product that they buy and use
Markets often divided into heavy-user, moderate-
user, and light-user segments
The 80/20 principle (Praedos Law)
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Brand Loyalty
Segmenting consumers grouped according
to the strength of brand loyalty felt toward a
product
Frequent flyer programs of airlines and
many hotels
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Using Multiple Segmentation Bases
Increase accuracy in reaching the right
markets
Combine multiple bases
Geographic and Demographic
Product-related with income and expenditure
patterns
Others
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SEGMENTINGBUSINESS MARKET
DEMOGRAPHIC: Industry, Company size, Location.OPERATING VARIABLES: Technology, User or Non-user status, Customercapabilities.
PURCHASING APPROACHES: Purchasing function organization, Powerstructure, Nature of existing relationships, General purchase policies,Purchasing criteria.
SITUATIONAL FACTOR: Urgency, Specific application, Size of order.
PERSONAL CHARACTERSTICS: Buyer-seller similarity, Attitudes towards risk& Loyalty.
BUSINESS BUYERS can be FIRST TIME PROSPECTS, NOVICES, SOPHISTICATES.
INDUSTRIAL BUYERS can be PROGRAMMED, RELATIONSHIP, TRANSACTION &BARGAIN HUNTERS.
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TARGETING
1. Standardization
2. Differentiation
4 Ps, People, Images, Service, Channel
3. Focus
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Amity Business SchoolStrategies for Reaching
Target Markets
Undifferentiated Marketing: when afirm produces only one product or product
line and promotes it to all customers with asingle marketing mix.
Differentiated Marketing: when a firmproduces numerous products & promotes
them with a different marketing mix designed
to satisfy smaller segments.
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Concentrated Marketing (nichemarketing): when a firm commits all of itsmarketing resources to serve a single
market segment
Micromarketing: involves targeting
potential customers at a very basic level,such as by ZIP code, specific occupation,lifestyle, or individual household
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Selecting and Executing a Strategy
No single, best choice strategy suits all
firms Determinants of a market-specific strategy:
Company resources
Product homogeneity
Stage in the product life-cycle
Competitors strategy
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Positioning: a marketing strategy thatemphasizes serving a specific market
segment by achieving a certain position in
buyers minds
Attributes
Price/quality
Competitors
Application
Product user
Product class
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Positioning mapGraphic illustration that shows differences in
consumers perceptions of competing
products
Reposition
Marketing strategy to change the position ofits product in consumers minds relative to the
positions of competing products
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Trout and Ries suggest a six-step questionframework for successful positioning:
1. What position do you currently own?
2. What position do you want to own?3. Whom you have to defeat to own the position
you want.
4. Do you have the resources to do it?
5. Can you persist until you get there?
6. Are your tactics supporting the positioningobjective you set?
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HypotheticalCompetitivePositioningMap forSelectedRetailers
P iti i St t i
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Positioning Strategies
1. Product Attributes
2. Benefits3. Usage Occasions4.Users5. Against a Competitor6. Away from a Competitor7. Product Classes
Positioning Differences1. Important
2. Distinctive3. Superior4. Communicable5. Preemptive
6. Affordable7 Profitable