ASEMINAR REPORT

ON

SEGMENTING AND TARGETING THE

MARKET

Submitted in partial fulfillment of the requirement for the degree ofMASTERS OF BUSINESS ADMINISTRATION

Session (2009-11)

SUBMITTED TO: - SUBMITTED BY:-Ms. POOJA KAURA VINAY BANSAL Lecturer, DIET M.B.A Ist Semester ROLL NO.1439143

DOON VALLEY INSTITUTE OF ENGINEERING & TECHNOLOGY, KARNAL

(APPROVED BY AICTE AND AFFILIATED TO KURUKSHETRA UNIVERSITY, KURUKSHETRA)

ACKNOWLEDGEMENT

In the completion of the project work, there is a feeling of satisfaction and in this moment

of happiness, I feel prompted to record my sincere gratitude for those who were a source

of inspiration, encouragement and guidance.

I am highly indebted to my guide Ms. POOJA KAURA, (Lecturer, Diet, Karnal), for her

valuable guidance and constant encouragement throughout the project work.

Finally it is an opportunity of immense pleasure to study under the guidance of highly

qualifies, dedicated and experienced faculty members of Doon Valley Institute of

Engineering & Technology (Karnal), the prestigious institution that has emerged as a

premier centre for excellence in MBA.

With great happiness and gratitude, I would also like to extend my sincere thanks to our

principal Mr. HARISH ABHICHANDANI and my mentor Mrs. MANISHA

TANWAR(H.O.D), for all their support and guidance.

VINAY BANSAL

PREFACE

The purpose of this report is to study different market segmentation skills. Consumers come into the market with their own unique set of preferences and resources. However, from the perspective of both the researcher and marketer there are sufficient similarities between individual consumers to warrant grouping them into “segments." These similarities are not restricted to their demographic characteristics alone, they may include motivations, values, lifestyles, the way in which consumers use products, their spending patterns, purchase behavior, and so on. The definition of a consumer market segment is "a relatively homogenous group of individuals whose motivations, product needs, and purchase behaviors, are similar."

GOAL OF THE REPORTThe goal of the report is to provide a market segmentation framework for a specific product market. The framework must include:

Identifying and naming two market segments within the market that is consumer and industrial market which are studied on different bases separately. Study of different bases helps marketer to choose best strategy according to his suitability and nature of product.Fully analyzing each of these market segments following the targeting strategies.Coming to some conclusions about the market attractiveness (profit potential) of each segment, and market segments not being served in the current market environment which potentially could be profitable.

CONTENTS

Acknowledgement Preface

Table of contents:Sr.No. Topic Page No.1. INTRODUCTION 12. NEED OF SEGMENTATION 43. OBJECTIVES 54. CRITERIA FOR EFFECTIVE SEGMENTATION 6

4.1 SEGMENTING CONSUMERMARKET 8

4.2 SEGMENTING INDUSTRIALMARKET

5. PRODUCT DIFFERENTIATION

AND MARKET SEGMENTATION

6. ADVANTAGES AND IMPORTANCE

OF SEGMENTATION

7. TARGETING

8. FACTORS TO BE CONSIDERED

9. TARGET MARKET STRATEGIES

10. HUL SEGMENTATION POLICY

11. MARKET SEGMENTATION OF TOSHIBA

12. MCDONALDS SEGMENTATION POLICY

SEGMENTATION

INTRODUCTION

SEGMENTATION:-

Market segmentation- is the process in marketing of dividing a market into distinct

subsets (segments) that behave in the same way or have similar needs. Because each

segment is fairly homogeneous in their needs and attitudes, they are likely to respond

similarly to a given marketing strategy. That is, they are likely to have similar feeling and

ideas about a marketing mix comprised of a given product or service, sold at a given

price, distributed in a certain way, and promoted in a certain way. Broadly, markets can

be divided according to a number of general criteria, such as by industry or public versus

private sector. Small segments are often termed niche markets or specialty markets.

However, all segments fall into either consumer or industrial markets. Market

segmentation is needed because the marketing concept calls for understanding customers

and satisfying their needs better than the competition. But different customers have

different needs, and it rarely is possible to satisfy all customers by treating them alike.

Buyers together make up markets. These buyers vary in numerous ways. These ways

include difference in their wants, acquiring ability, geographical sites, purchasing

behavior, and buying practices.

An example for how the market for soap may be segmented-

Types of Soap Characteristics of market segment

Beauty soap

E.g.: Dove, Lux, Camay

People who buy beauty soap will be people who want to keep their skin soft. They will

therefore buy soap which contains moisturizers. Women will mainly buy them.

Baby Soap

E.g.: Johnson’s baby Soap

This is a mild soap which will not harm a baby’s skin. It is bought mainly by mothers for

their babies.

Medicated soap

E.g.: Dettol, Lifebuoy

Sometimes soap is sold to help fight acne. This tends to be bought mainly by teenagers,

both male & female.

Non-branded soap

A Business market segment is a group of people or organizations sharing one or more

characteristics that cause them to have similar product or service needs. A true market

segment meets all of the following criteria: it is distinct from other segments (different

segments have different needs), it is homogeneous within the segment,it responds

similarly to a market stimulus, and it can be reached by a market intervention. The term is

also used when consumers with identical product and/or service needs are divided up into

groups so they can be charged different amounts. These can broadly be viewed as

'positive' and 'negative' applications of the same idea, splitting up the market into smaller

groups. Market segmenting is the process that a company divides the market into distinct

groups who have distinct needs, wants, behavior or who might want different products &

services.

The process of segmentation is distinct from targeting (choosing which segments to

address) and positioning (designing an appropriate marketing mix for each segment). The

overall motive is to identify groups of similar customers and potential customers; to

prioritize the groups to address; to understand their behaviour ; and to respond with

appropriate marketing strategies that satisfy the different preferences of each chosen

segment. Revenues are thus improved.

Improved segmentation can lead to significantly improved marketing effectiveness.

Distinct segments can have different industry structures and thus have higher or lower

attractiveness. With the right segmentation, the right lists can be purchased, advertising

results can be improved and customer satisfaction can be increased leading to better

reputation.

The purpose for segmenting a market is to allow marketing/sales program to focus on the

subset of prospects that are "most likely" to purchase manufacturer offering. If done

properly this will help to insure the highest return for marketing/sales expenditures.

Depending on whether manufacturer are selling to individual consumers or a business,

there are definite differences in what marketer will consider when defining market

segments

Segmentation is essentially the identification of subsets of buyers within a market who

share similar needs and who demonstrate similar buyer behavior. The world is made up

from billions of buyers with their own sets of needs and behavior. Segmentation aims to

match groups of purchasers with the same set of needs and buyer behavior. Such a group

is known as a 'segment'. Think of a market as an orange, with a series of connected but

distinctive segments, each with their own profile.

Of course a marketer can segment by all sorts of variables. The diagram above depicts

how segmentation information is often represented as a pie chart diagram - the segments

are often named and/ or numbered in some way.

NEED OF SEGMENTATION

The first thing we can establish is a category of need that our offering satisfies.

For businesses: Strategic -Segmentation is in some way important to the enterprise mission,

objectives and operational oversight. For example, a service that helped evaluate capital investment opportunities would fall into this domain of influence. The purchase decision for this category of offering will be made by the prospect's top level executive management.

Operations - Segmentation affects the general operating policies and procedures. Examples might be an employee insurance plan or a corporate wide communications system. This purchase decision will be made by the prospect's top level operations management.

Functional - Segmentation deals with a specific function within the enterprise such as data processing, counting, human resources, plant maintenance, engineering design, manufacturing, inventory control, etc. This is the most likely domain for a product or service, but we must recognize that the other domains may also get involved if the purchase of the product or service becomes a high profile decision. This purchase decision will be made by the prospect's functional management.

For the individual consumer: Social Esteem or Pleasure - Segmentation satisfies a purely emotional need in the

consumer. Examples are a mink coat or a diamond ring. There are some products that are on the boundary between this category and the Functional category such as a Rolex watch (a Timex would satisfy the functional requirement and probably keep time just as well).

Functional - Segmentation meets a functional requirement of the consumer such as a broom, breakfast.

OBJECTIVES OF SEGMENTATION

1. To make grouping of customers on the basis of their homogeneous characteristics

such as nature, habit, behaviour, income, age, education, profession, religion, etc.

2. To identify the needs ,tastes ,priorities ,buying-motives of the target consumers

3. To determine marketing strategies, targets and goals of the firm.

4. To make the activities of the firm consumer-oriented.

5. To identify the areas where the consumers may be created and market area can be

explained.

DIFFERENCE BETWEEN MARKET SEGMENTATION AND

MARKET SEGMENT

There is a difference between market segmentation and market segment. Market

segmentation is a process by which the market is divided in different segment on the

basis of some common characteristics of the consumers such as: income, sex, age,

education, profession, religion, etc whereas market segmentation is that part of whole

market in which we find uniformity in the buying trend or demand of every consumer.

CRITERIA FOR EFFECTIVE SEGMENTATION

Following are the criteria for effective market segmentation

1. IDENTIFIABLE : The segment or the group of consumer must be clearly

defined. That is, who is in the segment & who is outside the segment. The

marketer must be able to identify the members of the segment on the basis of

some characteristics. There must be clear differences between segments.

2. MEASURABLE: The effectiveness of the segmentation depends on the

measurability of the variable on the basis of which market is segmented. There are

many basis for segmenting the market. But whatsoever the base is taken that must

be measurable & obtainable in terms of data for effective segmentation.

3. ACCESSIBLE : The segment which is identified must be accessible so that a firm

can reach it through suitable means of communication and channels of

distribution.

4. RESPONSIVENESS: The identified market segment should respond favourably

to our marketing efforts. Different segments unless they respond in unique way to

particular marketing efforts hardly justify the use of a separate marketing

programme.

5. SIGNIFICANT: Another criteria for effective sementation is that it must be

worthwhile for cultivating & exploring it. It must have sufficient buying power.

The demand prospect should be sufficiently bright and profitable too.

6. SUBSTANTIABLE: The segment must be large enough to justify a separate

marketing programme. It should be large enough to justify the investment

required to market the product in it. It should be large enough to be profitable.

Substantiality not only depends upon the number of actual and potential buyers

but also on their purchasing power.

CRITERIA OF MARKET SEGMENTATION

According to Philip Kotler, segment marketing offers several benefits over mass

marketing. The company can market more efficiently, targeting its products and

services, channels and communication programmes towards the consumers that it

can serve best and most profitably. The company can also market more

effectively by matching its products, prices and programmes according to the

needs of carefully defined segments.

The step towards developing a segmentation strategy is to locate the base or basis

for segmenting the market. There are different basis which are used to segment

the market. Prof. Cundiff and Still have given a very simple division of product

market.

I. Consumer Market.

II. Industrial Market.

According to Philip Kotler, consumer market can be segmented on the basis of: (i)

Geographical basis; (ii) Demographic basis; (iii) Psychological basis; (iv)

Marketing basis; (v) Profit basis; (vi) Quantum basis; (vii) Loyalty basis.

The market for industrial products can be segmented on the basis of: (i) Type of

business; (ii) Usual purchasing procedure; (iii) Size of users; (iv) Geographical

market segmentation.

Market Segmentation

Industrial Market

Geographical

Demographical

Psychographical

Company Type: - Size, Type of

Industry, Decision Unit

Behavioural:- Usage rate, Buying status,

Purchase procedureBehavioural

Location

Consumer Market

SEGMENTING THE CONSUMER MARKET

The consumer market can be segmented on the basis of consumer characteristics like

geographic, demographic and psychological. The most common and popular criteria

bases or factors for market segmentation which are used by marketing managers may be

given as under:

I. Geographic Segmentation

It is the simplest convenient popular and usual base for market segmentation.

Historically also, the first and probably the most obvious basis for segmentation

of markets 1ias~eer geographical characteristics of people. In the geographical

basis regional differences in terms of topography, climate, population and its

density may be considered as the base for market segmentation.

Some example of geographic segmentation of market are as follows:

AREA : International, National, Regional, Local

REGION : Northern, Eastern, Western, Southern, Central.

CLIMATE : Hot, Cold, Humid, Rainy

CITY SIZE : Metropolitan, Big cities, Small cities, Towns, Villages

URBANISATION : Urban, Semi-urban, Rural, Slums.

DENSITY : High populated, moderately populated, Less populated.

The marketeer may design his marketing strategies taking into consideration the

characteristics of the individual markets. Geographic segmentation helps the

marketeers to concentrate their efforts to the exact places. Under geographic

segmentation organisational, promotional and distributional efforts can be

fruitfully utilised. Some examples are as follows.

(i) Climate: The climatic conditions have great impact over the purchase

decision. For example: C29lers and Air conditioners are not

normally sold in hilly areas, similarly wool and woolen dresses are

less desirable in Southern India.

(ii) Urbanisation: The urban people are we1Leducated with high incomes and

have mobility, while the rural people are less educated with low

incomes and low rate of mobility. The urban people prefers to buy

a variety products like readymade garments, shoes, grocery items,

kitchen wares, cosmetics and electric appliances, whereas rural

people are more interested in necessities of life, seeds, fertilizers

etc.

II. Demographic Segmentation

It is also an important. Most purposeful and commonly used basis. Under

demographic segmentation, a marketeer tries to differentiate between group of

customers on the basis of demographic variables such as age, sex, family size,

marital status, education, occupation, religion, language nationality etc.

Demographic basis as the following advantages:

(i) These are easy to recognise and easy to measure.

(ii) Their data can be easily made available.

(iii) These can be easily co-related with sales and other marketing efforts.

Some commonly used demographic basis are as follows:

SEX : Male, Female

AGE GROUP : Infants, Youngs, Adults, Old age

INCOME : High income group, Middle income group, Low income group.

EDUCATION : Primary, Secondary, senior secondary, College, University.

RELIGION : Hindu, Muslim, Sikh, Christian, Others.

NATIONALITY : Indian, Pakistani, Nepalese, Chinese, Russians.

OCCUPATION : Service, Business, Industry, Cultivators, Financiers.

MARITAL STATUS : Married, Unmarried

In the case of frequently purchased consumer products like: tea, coffee, soaps,

detergents, toothpaste etc., we can easily use demographic variables, some

examples are as follows:

(i) Sex: Male-female buying behavrious shows remarkable differences. So

product market can be easily segmented on this basis. Much difference of

physique, psyche and habits is found in male and female. Physical differences

require variations in the design and styling of certain products like bicycles,

scooters, garments, cosmetics, footwear, wrist watch etc. Therefore, the market

for these products can easily be segmented on the basis of sex.

(ii) Income: The income of an individual determines to a great extent the type and

quantity of products he buys. A person with low income is more concerned with

purchasing necessities. He demands low quality products at low price. Whereas

the middle income group buyer is more interested in quality and durability.

Buyers belonging to high income group demand luxuries and prestigious priced

goods. The availability of products in large, medium and small packs is also

influenced by level of income. The decision to sell on credit is also due to

differences in incomes.

(iii) Occupation: It is also are important base to segment the market. On this basis

market may be divided in businessmen, industrialists, farmers, professionals (like

Doctors, Chartered Accountants, Lawyers etc.), employed persons. The needs,

attitudes and preferences differ in all these groups of customers.

(iv) Family-life cycle: Family life cycle is a complex variable and is defined in

terms stage, marital status, age of wife and present age of children. Buying

behaviour changes with the change in stage of family life cycle. Investigations

have proved that the family life cycle exercise definite' influence on consumer

behaviour with reference to purchase of durables as well as non-durable products.

III. Psychographic Segmentation

Psychographic is a recent approach to market segmentation which has emerged as

a major alternative to the traditional approach. It describes the human

characteristics of consumers. It segment the market on the basis that how people

act. Psychographic basis includes. Personality, Lifestyle, Self-image, Attitude

etc. People within the same demographic group can exhibit very different

psychographic profits. Following are some commonly used psychographic basis

PERSONALITY : Extroverts, Introverts, Aggressive

LIFESTYLE : Conservative, Liberal, Health conscious,

Adventuresome, Status seekers.

SOCIAL CLASS : Lower-lower class, Lower-middle class, Middle

Class Middle upper class, Upper-upper class.

CULTURE : Continental, Chinese, Indian, South Indian,

Hindu culture.

There are two shortcomings in these basis. A marketeer must be aware of this,

while using psychographic basis:

(i) In this case data collection and analysis can be problematic because survey

instrument I.e. questionnaire have many questions.

(ii) Psychographic segmentation studies are costlier.

Psychographic basis are difficult to measure but they provide a useful

basis for segmentation. Some examples of psychogrephic basis are as

follows:

a) Personality: It effects the consumption of many goods especially those

which are consumed publicly. The differences for product preference is so

wide that it is not possible to serve the same product to all the consumers.

To judge personality traits of an individual is a difficult task but if the

important personality traits are recognised, then the marketeers can easily

select the most profitable segment or segments. Personality base on

segmentation plays an important role in the products like: Clothing,

Furniture, Crockery, Cosmetics, Automobiles, Shoes, jewellery,

Cigarettes, Liquor etc.

b) Life Style: Generally, products demand consumed by consumers express

their lifestyle. Lifestyle reflects the overall manner in which persons live

and spend time and money. It is behavioural concept enabling us to grasp

and predict buyer behaviour. On the basis of lifestyle consumers can be

grouped as 'Swingers' who seek latest products; 'Status seekers' who try to

buy goods that wi1I reflect a high status and 'Plain Joes' who seeks

ordinary and simple products. Consumers can also be group as

Conservative, Liberal, and Adventuresome. Another group of health

conscious consumer can also be made to market the products like:

medicines, vitamins, health aids etc.

c) Social class: The society is divided into various classes and a consumer

belonging to a particular class purchases according to its class features.

There are different ways to make groups on the basis of social classes.

Some authors give five groups classification, some give three groups

classification as: Upper, Middle and Lower. Upper class demands

expensive and superior products, e.g. A.C's Mobile phone, luxurious items

etc. Middle class demands comforts products, e.g. Cooler, Scooter,

Crockery, Furniture etc. Lower class demands necessity products. From

the ancient time Indian society is divided into four groups such as

Kshatriya, Brahmin, Vaish and Shudra. The buying behaviour of these

four classes differs significantly.

IV. Marketing Basis

Marketing conditions also form an important basis or criteria for market

segmentation. There are latest variables used by modern marketeers is include:

(i) Degree of Competition: Non competition, Low competition, Moderate

competition and acture competition in the market.

(ii) Channels of distribution: One level (i.e. only retailers), Two level (i.e.

wholesalers and retailers), Multi-level (i.e. selling agents, wholesalers and

retailers).

(iii) Buyers with price consciousness: High price market, Low price market.

For example, Connought Place market and Sadar Bazar market of Delhi.

V. Consumer-Behaviour Basis

Consumer behaviour may also form the basis of market segmentation consumer

behaviour divide the market on three basis: (i) Usage Rate; (ii) Benefit Response,

and (iii) Loyalty Response.

(i) Usage Rate: Markets can be segmented on usage rate as:

Heavy, Medium, Light and Non-User.

Though the heavy users are small in number but they show a high

percentage of total consumption. Normally, heavy users consume four to

ten times move than the light users. Therefore, marketeer likes to attract

the heavy users.

Non-user group is consisting two types of people. One, who generally do

not use this product (Le. Non-Potential Users) and those who might use

(Le. Potential Users). Potential users can be treated as target market, if

company desire to expand his market.

(ii) Benefit Response: When consumers buy a particular product they have

their expectation. Such expectations differ from product to product and

from consumer to consumer. These benefits can be durability, economy,

efficiency, prestige etc. For example, in case of 'Shampoo' the benefits

sought may: cleanliness, protection, cosmetic and economy, in case of

'Tooth Paste' the benefits sought may be : prevention from tooth decay,

gum's strongness, bright teeth, freshness, taste and low price, in case of

'Automobile' the benefits sought may be: fuel economy, quality, status,

resale value.

Segmentation based on benefits is usually most practical approach. Thus, a

company can choose any benefit it wants to emphasis, create a product

and deliver it by a direct message to the group seeking that benefits.

(iii) Loyalty Response: Loyalty response is the latest base used for

segmentation. It works on the tact that the consumers can differentiate

between the products. That is that create a product. That is they create a

product preference scale. That is, the buyers are asked to compare the

existing brands of product and rate them as they perceive them based on

their likings. Such an attempt helps the seller in developing an ideal brand

to which a sizeable group of customers is clustering. Later on, these

consumers can be sub-divided on the demographic or psychographic

features.

On the basis of loyalty response we may classify the consumers as most loyal,

moderately loyal and switchers. Most loyal are the ones who in no case will buy

any other brand as they have developed loyalty towards one' specific brand. They

are not ready to purchase any substitutem. Moderately loyal are the ones who do

not stick to particular brand rather they can easily choose between two or three

brands. Switchers are the ones who are not loyal to any brand. They rather,

purchase any brand which is conveniently available and are low priced. Such

consumers do not decide in advance the brand to be purchased rather they decide

on the spot what to purchase. However, it is very difficult to measure loyalty

correctly.

SEGMENTING THE INDUSTRIAL MARKET

Like the consumer market, industrial market can also be segmented. This market

segmentation is as appropriate for industrial products as for consumer products.

Many basis are used for segmenting the industrial market. Some important basis

are as follows:

1. Type of business activities basis: This type of segmentation strategy is

used when the industrial house produces several products or 'services. For

example, the market of a Insurance company can be segmented as: Fire

and general insurance business, Marine insurance business, Life insurance

business. A separate division may be formed for each type of business.

This market can again be segmented on the area basis.

2. Geographical location basis: Geogrphical segmentation may also exist,

when some kinds of business and service oganisation seem to settle in a

particular area, for one or other reason. For example: Handloom industry

at Panipat, Scientific goods industry at Ambala Cantt, Hosiery industry at

Ludhiana.

3. Usual purchasing procedure basis: Industrial buyers are generally more

systematic buyers than household buyers. Among industrial buyers there

in much variation in the amount of consideration given to buying different

items, for example less price, optimum quality, easy availability etc.

4. Size of user: Size of industrial purchases vary according to the size of

industrial user. The market according to size can be divided as large

buyers, medium buyers, small buyers. Since, it is generally more

economical to sell in large lots than small, the industrial markets quote

lower rates to buyers of large quantities.

Industrial market can also be segmented on the basis of:

(i) Demographic basis: such as Industry, Company size location.

(ii) Situational variables: such as Buyer-seller similarity, Risk bearing and

Loyalty, Urgency, Size of order.

PRODUCT DIFFERENTIATION AND MARKET SEGMENTATION.

The manufacturer who faces intense competition either tries to reduce the price of

his product or go for product differentiation. Product differentiation is a strategy

wherein the marketeer through sales promotion activities tries to put

psychological pressure on consumers and portrays as if his product is not only

superior to competitors but it is also the only one that can satisfy their needs and

wants. If the marketeer succeeds in convincing that his product is 'different' or

'better' than the one available in the market, consumer will be more inclined to his

product than its competitors. See the advertisement of "Maggi" Sauce. "Captain

Cook" salt; "Rin Detergent Bar".

In product differentiation strategy, the manufacturer does not make any big

physical alteration in the product rather he differentiates his products on the basis

of brand name, colour, shape, size etc. For example Hindustan Lever Ltd. presents

bathing soaps in different brand names such as Jai, Lux, Hamam, Rexona etc. in

various colours, sizes and fragrances without much physical difference. The

product differentiation strategy was first used in 1920s. Still, even to-day il is a

powerful strategy to sell the products of a company 10 different consumer

groups/segments successfully. Under product differentiation the demand is

bended according to supply. Product differentiation is generally used to sell the

products like Bathing soaps, Washing soaps, Cosmetics, Bidi, Cigarette, Sports

material, Petroleum products etc.

Market segmentation, on the other hand, divides the total heterogeneous market

into small homogeneous groups/segments and tries to produce the product that

satisfies the needs of a particular segment. Here the supply is bended according to

demand. It emphasis's the demand side. It is an attempt to adjust product and

marketing efforts according to the needs of consumers. Here, the total market is

divided into sub-markets and products are offered which satisfy the well defined

needs of specific groups of consumers/segments. Once the market has been

clearly identified, it becomes easier for the marketeer to offer products, which is

different from those of competitors. Market segmentation strategy was first used

in 19505 along with new concept of marketing. Still, this approach is most widely

used even today.

ADVANTAGES AND IMPORTANCE OF

MARKET SEGMENTATION.

Market segmentation is the reality of the market situation. Different customers

have different needs and preferences. Therefore, market demand for all the

products and services is heterogeneous and not homogeneous. For segmentation

when customers needs are analysed ; we find that there are number of needs,

which are still unfulfilled by fulfilling these needs we can become a successful

marketeer. Segmentation ensures higher customer satisfaction and improve

effectiveness of the marketing programme. Market segmentation strategy is a

customer oriented philosophy.

Market segmentation strategy benefits both the marketeers and the consumers.

According to Prof. Maurice I. Mendell and Prof. Larry J. Rosenberg, a marketeer

receives the following advantages from the market segmentation.

1. Knowledge of marketing opportunities: Under market segmentation,

marketeers are in a better position to locate and compare marketing

opportunities. In the- market area where, response of the customers seems

to be poor, the strategy of approach can be readjusted, so that the sales can

be pushed up.

2. Adopting effective marketing programme: When customer needs are

fully understood marketeer is able to formulate and implement different

marketing programmes which suits. to the markets. In the absence of

segmentation a single marketing programme will be framed which may

not be effective for all consumer- groups. But because of segmentation the

seller can create different marketing programmes which suits to the needs

of different consumer groups. He can make better adjustments of his

products and marketing appeals.

3. Proper allocation of resources: Segmentation leads to proper allocation

of marketing resources because customer is the focus of all marketing

efforts and only target markets are served. He can allocate his limited

financial and marketing resources according-to the needs of different

segments. Less resources' to be allocated where marketing opportunities

are less and more resources to be allocated where marketing opportunities

are more. Hence, market segmentation helps in proper allocation of

resources.

4. Better assessment of the competition: Market segmentation helps in

assessing correctly the strength and weaknesses of the competitors. This

assessment helps the marketeer to adopt different strategies in different

markets taking into account the competitor's strategies.

Market segmentation also helps to know the level of competition in each

segment. If the competitor has stronghold in any segment, there is no use

in wasting resources on such segment. However, in the segment where

competitor's product fails to satisfy the target group, the marketeer can

successfully penetrate in it.

5. Knowledge of customer's needs: Market segmentation improves a

company's understanding of why customers do or do not buy certain

products or services. It also provides an understanding that how a

company can make adjustment to meet changing market demands.

All marketing activities are directed towards the satisfaction of consumers.

With the help of segmentation it becomes easy to measure the level of

segmentation in each segment and also to make improvements in the

segmentation level.

6. Adjustment in products: Under market segmentation, marketeers can

easily make finer adjustments in their products and market communication

according to the change in taste, need, nature and income of the

consumers. More resources may be allocated to market segments where

sales opportunities are better.

7. Effective advertising appeals: Influencive messages can be propagated to

the consumers through effective advertising media when the choices,

habits, preferences, needs of different buyer groups are duly recognised

with the help of market segmentation. So different advertising appeals can

be formulated for different segments. Hence, segmentation helps to make

the advertising appeal more effective.

8. Enhance marketing efficiency: Market segmentation enhances marketing

efficiency by offering specific pricing, sales promotion and distribution

channel as per the requirement of different segments. Unique marketing

strategies can be framed regarding product, pricing, advertising, sales

promotion, distribution channel etc. according to changing need of the

segments. This increases the marketing efficiency of firm.

9. Increase in sales volume: By segmentation the market manufacturer can

increase his sales volume. As we know, each segment has different

demand pattern and when the manufacturer satisfy the demand of different

segments by changing his product, the total sales volume of the company

increases.

10 Benefits to consumers: Segment results in product wars between the

Sauce Vs Maggi Sauce; Tata Salt Vs Captain Cook salt; Colgate Vs Close

up and so on. Each time this product war goes in favour of consumers.

For example in Cola war, consumer gets more Cola for same price;

consumer also gains in terms of added quantity, quality and variety.

TARGETING

TARGETING

Targeting is the next step in the sequential process and involves a business making

choices about segment on which resources are to be focused. There are three major

targeting strategies: undifferentiated, concentrated, and differentiated. During this process

the business must balance its resources and capabilities against the attractiveness of

different segments. Target Marketing involves breaking a market into segments and then

concentrating the marketing efforts on one or a few key segments. Target marketing can

be the key to a business’s success.

After the most attractive segments are selected, a company should not directly start

targeting all these segments. The attractiveness of the segments is also depending on

other important factors. In the main activity of defining a target market, four sub

activities are given which are the bases for deciding on which segments will actually be

targeted.

The four sub activities within targeting are:

1. Defining the abilities of the company and resources needed to enter a market

2. Analyzing competitors on their resources and skills

3. Considering the company’s abilities compared to the competitors

4. Deciding on the actual target markets.

The first three sub activities are described at the topic competitor analysis. The last sub

activity of deciding on the actual target market is an analysis of the information made

available when comparing the companies’ abilities to the competitors’. This analysis

leads to a list of segments which are most attractive to target and have a good chance of

leading to a profitable market share.

Obviously, targeting can only be done when segments are predefined; there have to be

segments to analyze the competitors which are in this market. When the process of

targeting is ended, the markets to target are selected, but the way to use marketing in

these markets is not yet defined. To decide on the actual marketing strategy, knowledge

of the differential advantages of each segment is needed. When positioning a product, the

segments are first analyzed.

FACTORS TO BE CONSIDERED WHILE TARGET MARKET

SELECTION

Attractiveness of a Market Segment

1. Size of the segment (number of customers and/or number of units).

2. Growth rate of the segment.

3. Competition in the segment.

4. Brand loyalty of existing customers in the segment.

5. Sales potential for the firm in the segment.

6. Expected profit margins in the segment.

Suitability of Market Segments to the Firm

1. Whether the firm can offer superior value to the customers in the segment.

2. The impact of serving the segment on the firm's image.

3. Access to distribution channels required to serve the segment.

4. The firm's resources vs. capital investment required to serve the segment.

TARGET MARKET STRATEGIES

1. Single-segment strategy- Also known as a concentrated strategy. One market

segment (not the entire market) is served with one marketing mix.

2. Selective specialization- This is a multiple-segment strategy, also known as a

differentiated strategy. Different marketing mixes are offered to different

segments.

3. Product specialization- The firm specializes in a particular product and tailors it

to different market segments.

4. Market specialization- The firm specializes in serving a particular market

segment and offers that segment an array of different products.

5. Full market coverage- The firm attempts to serve the entire market.

HUL SEGMENTING POLICY

Company’s Background

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods

Company, touching the lives of two out of three Indians with over 20 distinct

categories in Home & Personal Care Products and Foods & Beverages. They endow

the company with a scale of combined volumes of about 4 million tonnes and sales of

Rs.10,000crores.  

 

HUL is also one of the country's largest exporters; it has been recognized as a Golden

Super Star Trading House by the Government of India.  

 

The mission that inspires HUL's over 15,000 employees, including over 1,300

managers, is to "add vitality to life." HUL meets everyday needs for nutrition,

hygiene, and personal care with brands that help people feel good, look good and get

more out of life. It is a mission HUL shares with its parent company, Unilever, which

holds 51.55% of the equity. The rest of the shareholding is distributed among 380,000

individual shareholders and financial institutions.  

 

HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's,

Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-

Annapurna, Kwality Wall's – are household names across the country and span many

categories - soaps, detergents, personal products, tea, coffee, branded staples, ice

cream and culinary products. They are manufactured over 40 factories across India.

The operations involve over 2,000 suppliers and associates. HUL's distribution

network comprising about 4,000 redistribution stockists, covering 6.3 million retail

outlets reaching the entire urban population, and about 250 million rural consumers.  

 

HUL has traditionally been a company, which incorporates latest technology in all its

operations. The Hindustan Unilever Research Centre (HLRC) was set up in 1958, and

now has facilities in Mumbai and Bangalore. HLRC and the Global Technology

Centers in India have over 200 highly qualified scientists and technologists, many

with post-doctoral experience acquired in the US and Europe.  

 

HUL believes that an organization’s worth is also in the service it renders to the

community. HUL is focusing on health & hygiene education, women empowerment,

and water management. It is also involved in education and rehabilitation of special

or underprivileged children, care for the destitute and HIV-positive, and rural

development. HUL has also responded in case of national calamities / adversities and

contributes through various welfare measures, most recent being the village built by

HUL in earthquake affected Gujarat, and relief & rehabilitation after the Tsunami.  

 

In 2001, the company embarked on an ambitious programme, Shakti. Through Shakti,

HUL is creating micro-enterprise opportunities for rural women, thereby improving

their livelihood and the standard of living in rural communities. Shakti also includes

health and hygiene education through the Shakti Vani Programme, and creating

access to relevant information through the iShakti community portal. The program

now covers 15 states in India and has over 31,000 women entrepreneurs in its fold,

reaching out to 100,000 villages and directly reaching to 150 million rural consumers.

By the end of 2010, Shakti aims to have 100,000 Shakti entrepreneurs covering

500,000 villages, touching the lives of over 600 million people.  

 

HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The

programme endeavors to induce adoption of hygienic practices among rural Indians

and aims to bring down the incidence of diarrhea. It has already touched 70 million

people in approximately 15000 villages of 8 states..  

 

If Hindustan Unilever straddles the Indian corporate world, it is because of being

single-minded in identifying itself with Indian aspirations and needs in every walk of

life.

DIFFERENT PRODUCT LINE OF HUL

Lux   Breeze

Lifebuoy   Dove

Liril   Pears

Hamam   Rexona

     

Surf Excel     Fair & Lovely  

Rin     Pond's  

Wheel     Vaseline  

Sunlight     Aviance  

     

Sunsilk Naturals     Pepsodent  

Clinic     Closeup  

     

Axe     Lakme  

Rexona    

Ayush          

        

Brooke Bond   Brooke Bond Bru    

Lipton          

     

Kissan   Kwality Wall's    AnnapurnaKnorr

MARKET SEGMENTATION OF TOSHIBA

Toshiba is a cooperation which established in 1978 in Japan. Toshiba is the world's

9th largest integrated manufacturer of electric and electronic equipment, with 190,709

employees’ worldwide and consolidated annual sales of over US$61 billion, taking

the number 91 spot in the world (The Fortune, 2007). This cooperation is also a world

leader in high technology, a diversified manufacturer and marketer of 4 main business

segments which are Digital Products, Electronic Devices & Components, Social

Infrastructure Systems and Household Appliances (Toshiba, n.d.).

Demographic Market Segmentation: Market Segmentation Based on Gender Groups:

Gender is one of the key demographic variables for Toshiba’s market segmentation.

Although Toshiba’s product line is suitable for both men and women, it is the male

side that makes up the majority portion of consumers. Men have a "technological

world view" that grew up along with industrial society (Brenston, 2007). Hence it was

no surprise that Toshiba had that in mind and made its product renowned for elegance

and class, which is an essential element in middle-high working class. By looking at

the new Toshiba satellite television commercial (2009), one can tell that the product

is targeted towards working class men as the commercial include offices and male

entrepreneurs in its scene. Besides that, Toshiba hires famous female celebrities such

as Japanese singer BoA and Chinese athlete Guo Jing Jing to promote their products,

notable for the sex appeal towards men.

McDONALDS SEGMENTATION POLICY

McDonald's Corporation is the world's largest chain of fast food restaurants, primarily

selling hamburgers, french fries, soft drinks, milkshakes and desserts. It appeals to

local taste preferences with relevant offerings like the offerings of one-third pound

Big Tasty in most Europe and Latin America.

McDonald's began in 1940 and opened by siblings Dick and Mac McDonald in San

Bernardino, California. “We take the burger business more seriously than anyone

else." is the philosophy of McDonald’s. The successful expansion of McDonald's into

many international countries make the company become a symbol of globalization

and the spread of the American way of life. However, it also make it a frequent topic

of public debates about obesity, corporate ethics and consumer responsibility.

There are at least 31,000 McDonald can be found in 120 countries and territories

around the world serving nearly 54 million customers each day. McDonald's has

always been a franchising company and has relied on its franchisees, to play a major

role in the System's success. It remains committed to franchising as a predominant

way of doing business.

CONCLUSION

Market Segmenting and Targeting are the tools used by the marketers to capture the

market share from the rivals of their product. Thus, we can say that the total process

of market segmentation and targeting is a very important attribute of marketing mix.

These two process very closely related inter related with each other. To make this

marketing process effective a thorough swot analysis of the firm is very important.

Keeping in mind the strength, weakness, opportunities and threat the firm can

formulate and implement its total marketing mix.

We conclude that market segmentation helps the manufacturers and marketers to

match their products with the real needs of the consumers groups. It also benefit the

consumer, he may get the best suited products at proper price and quantity.

BIBLOGRAPHY

BOOKS:-

AUTHOR’s SURNAME NAME TITLE PUBLICATION

BANSAL Dr.S.P.PRINCIPLES OF

MARKETING KALYANI

JAIN ASHOKPRINCIPLES OF

MARKETING VK

WEBSITES:-

WWW.GOOGLE.IN

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