Segmentation Mba II

8/7/2019 Segmentation Mba II

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SEGMENTATION AND

TARGETING

- By Vidushi Sharma


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Introduction:-

Market place is characterized by age of diversity

One size does not fit all homogeneous offering will

not do.

Market segmentation is the process of dividing the

market into distinct subsets of consumers with

common needs and characteristics and selecting one

or more segment to target with a distinct marketing

mix.

Eg HULs soap (product line)


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What is Market

Segmentation?

Segmentation is the process of

dividing heterogeneous market into

homogeneous groups.

These homogeneous groups havesimilar needs and wants.


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Need for Segmentation:-

Needs and wants of customers vary, it is very

heterogeneous and thus it is not possible for a

marketer to serve such customers profitably. It

is better to divide such market into

homogeneous groups.

Helps in competing in a highly competitive

market.


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Bases for Segmentation :-

1. Geographic Segmentation

2. Demographic Segmentation

3. Psychographic Segmentation

4. Behavioral Segmentation


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I. Geographic Segmentation :-

Dividing the market into different geographical

units such as nations, states, countries, cities

etc.

Rationale: people who live in same area share

similar needs & wants and these wants differ

from those living in other areas.

Region : South, West, North, East

City: Class I, Class II, metro cities etc

Rural and urban areas.


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The culture, food habits, TV viewing patterns, social

customs varies. RK Swamy BBDO guide to urban

markets: market potential values of town wascalculated on the basis of 5 indicators:

1. Number of consumers.

2. Means which the consumers have.3. Consumption behavior.

4. Awareness levels.

5. Marketing support infrastructures.

Easy to form segments on this basis

Local media makes it easier to communicate with

these segments


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E.g. - woolens are more required in Delhi than in

Chennai.

Design and color of cloths and accessories vary in

rural and urban areas.

Brands preferred also vary in rural and urban areas.

In arid regions of western India air coolers arepreferred while in regions with hot and humid

climate air conditioners are preferred.

Southern states show higher preference towards

coffee while other states prefer tea.


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II. Demographic Segmentations

1. Age :-

Consumers wants and needs vary with age groups.

Different age groups present different marketing

challenges and opportunities.E.g.

i- Johnsons baby soap and talcum powder.

ii- Magic pot magazine published by Malaya

Manorama

iii- JAM- Just Another Magazine

iv- TV channels


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2. Gender :-

Men and women have different attitudinal and

behavioral orientation.

Gender difference is due to socialization, brought

up.

Different shopping behavior is shown by males andfemales.

Product categories to which gender differentiation

can be applied is- clothing, hairstyle cosmetics and

magazines.

E.g.-

i - Axe, park avenue, Raymond - masculine products

ii- Temptation, pleasure feminine product


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3. Marital Status:-

Marital status has remarkable influence on

consumption habits of a person. Bachelor: more spending on cloths, entertainment,

eating out less investment.

Married person: higher investment, insurance

4. Education:-

Education decides - media for communication,

advertisement matter, language for communication,

search for information.

Thus choice of product varies with level of

education.


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5. Occupation:-

Employment data helps in designing product and

advertisement aimed towards people of particularprofession.

E.g. Rotomac, ariel

6. Family life cycle:

Families pass through a series of predictable stages.

At each stage requirements of family vary

It includes marital status, age, income and

employment status


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Family life cycle:

BachelorhoodNewly married young couples

Parenthood (full nest)

Post Parenthood (empty nest)Dissolution (Solitary survivor stage


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7. Social Class

It shows the relative status in society.

It is function of education, income and occupation.

Buying habits, product preferences degree of brand

loyalty vary in different social classes.

Knowledge of social class difference is used to appeal

specific segments.

In India socio-economic classification is generally

used(caste system).


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III. Psychographic Segmentation

Psychographic is the science of using psychology and

demographics to better understand consumers.

Psychographic = Psychology + Demographic

Here buyers are divided in groups on the basis of

psychological traits lifestyle, values, motivation,attitude etc


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1. Lifestyle :-

Lifestyle and values affect the choice of product

category and brands.

COMPARE :-

Lifestyle of housewife & working women

Lifestyle in metros & towns.

Lifestyle of middle class & high class person

Strict norms of religion affect food habits & dress

codes.


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Eg McDonalds

Titan : Raga, Sonata, Fast track

Maggi, Top ramen

Femina

VALS 2 (Values & Lifestyle model) by SRI-Consulting Business Inteligence

According to this model consumers are

divided in 6 groups:

Fulfilled, Believers, achievers, Strivers,

Experiencers, Makers


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2. Motivation :

Driving Force

Buyer behavior is driven by motivation.

E.g. : ready to eat food When launched in India was

failure.

House wives need to be motivated to buy them Evereset

Maggi Atta noodles

Foodles HorlicksKnor Soups

Kellogs


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3. Attitudes :

It is the way one thinks, feel & perceive towards

some aspect of our environment such as product,

brand or advertisement

It is a learned phenomenon, can be favorable orunfavorable.

It is for a longer period of time.

5 types of attitude: enthusiastic, positive, indifferent,

negative & hostile

E.g. purchasing a bike


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4. Personality :

Rarely used method

People with low esteem, low self confidence-

Advertisements showing acceptance in social

groups

E.g. Belmont


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IV. Behavioral Segmentation

Division is on the basis of customer knowledge, use

& response to a product.

1. Occasions:- Defined as time of day, week, month, year, or in

terms of temporary aspects of consumers life

Anniversary, wedding, Birthday etc

E.g.: Air travel Business, family, vaccation

Greeting cards, Cadbury, Monaco, Marie etc


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3. User Status:

Non-users

Ex-users

Potential Users

First Time Users

Regular Users

Each group is handled by different marketing strategy

by the marketer.


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Benefits of

Market Segmentation Identifies opportunities for new product

development

Helps design marketing programs most effectivefor reaching homogenous groups of buyers

Improves allocation of marketing resources


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TARGETING It is the process of selecting one or more segment which

the firm want to and can serve profitably in availableresources.

There are various criteria on the basis of which a

segment is selected for targeting :

1. Identifiable an Measurable

2. Accessible

3. Substantial

4. Responsive

5. Homogeneous

6. Differentiable

7. Actionable


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Each Market Segment

should be

MeasurableMeasurable

ResponsiveResponsive

AccessibleAccessible

SubstantialSubstantial


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Targeting Strategies:

1. Single Segment Concentration:-

M1 M2 M3

P1

P2

P3


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E.g. Zodiac formal shirts for executives, Specialty

hospitals.

Advantages:

1. Strong knowledge of segment

2. Economies of production, distribution &

production.3. Segment leadership and can earn high return on

investment.

Disadvantages:

1. Out of market if technology changes.

2. E.g. Digital camera & polaroid


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1. Single Segment Concentration:-

Diversify and thus less risky.

M1 M2 M3

P1

P2

P3


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3. Product Specialization:

Strong reputation in the product area.

E.g. Microscope

M1 M2 M3

P1

P2

P3


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4. Product Specialization:-

M1 M2 M3

P1

P2

P3


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Features :

Serving many needs of a particular customer group. Same channel can be used for different products to

reach the same group of customers.

Strong image in serving a particular group of

customers.

Reduced risk.


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5. Full Market Coverage:

M1 M2 M3

P1

P2

P3


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Features :

Large firms like IBM, GM, Coca-cola

This can be done in to ways:

1. Undifferentiated Marketing : Standard product,

mass distribution & marketing

2. Differentiated Marketing : Maruti Suzuki


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THANK YOU!!

Documents

Segmentation Mba II