SSD SMG L3A Segmentation

8/7/2019 SSD SMG L3A Segmentation

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Special features of servicesSpecial features of services

Intangibility = > Unseen , Untouchable , Nearly ± Invisible

Cannot be displayed , even at PoP

= > Customer Confidence= > Customer Evaluation

Customers seek µevidence of quality¶ (or of skills)µTangibilising the Intangible¶eg SEB seal on an electric meter eg ICAI certificate for ACA / FCA



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Inseparability = > Integrated with µOfferer¶ie Created , delivered & consumed simultaneously

ie marketing & production is almost concurrentService provider participates ,so does the customer !!

Shortest sales channel ie direct sellingCannot be deferred for future / put for parallel useeg Surgeon & µOperations¶ ± No parallel selling



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Inconsistency = > Variability , HeterogeneityDifferent Service providers at different times

Same service provider in different µservicescape¶ / different customer

eg IA Service , JET service by particular provider

Products => WYSIWYG , Services => WYSINWYG ??

Service Quality UniformityArticulation by Customer Helps , Customization



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Inventory (Inability to) = > PerishabilityCannot be µstored¶ till µsold¶

eg Empty seats on a flight / in a concert

Under used bank staff on fri X= Quick service on Saturday !

Direct Opportunity Costs , idle surgeon

Matching demand & supply , peak SR traffic



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Challenges for Service Organizations / MarketersChallenges for Service Organizations / Marketers

Service Quality defining : Intangibility & VariabilityService Quality maintaining : Integrated Offering

Org Structure : Mktng + Opns + HR interlinkedFluctuating Demand : PerishabilityBalancing Act : Standardisation v/s PersonalisationCompetition Thwarting : Patenting Problems / Entry

Consistent Communication : Direct communicationwith customers by frontline.





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SegmentationSegmentation

Process of dividing the total market into smaller groups , such that members of each group are :

Very similar in their buying behaviour Have common factors that influence their demandLikely to respond similarly to a common µstimulus¶Have common characteristics meaningful to

design / delivery / promotion / pricing

The Idea is to make Marketing more accurate / effective



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K ey Points about SegmentationK ey Points about Segmentation

It is a division & sub-division of the Market.Demand-focussed or Consumer-focussed approach.Recognises diversity of Wants & Desires of Consumers.

Different consumers have different responses to same stimuli.It is very information-dependent & knowledge-intensive.Each segment represents a different opportunity.

Marketing will be most effective if appropriate Products are

made available to these segments (markets)That¶s Why the Imp of µProduct ± Markets¶ Concept



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Attributes of SegmentationAttributes of Segmentation

Any given segment should ideally be :

Relevant : Compatible with design / mktng / distbn skillsMeasurable : Numbers & / or Purchasing Power Sizeable : Voluminous enough => Prod Costs => Profits

Reachable : Communication / Distribution



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Segmentation ApproachesSegmentation Approaches

Geographic Segmentation :

Basis of Countries / Regions / States / Cities / TownsEg Food Habits : regional disparities / influencesHelps understand / improve µreach¶eg Growth Mode of Pvt Banks



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Demographic Segmentation :Basis of study of µpeople profile & attributes¶Population Size / Age Distribution / Gender Ratio /Income Levels / OccupationHelps target niche markets

eg High End Portfolio management services for HNWIs

eg µCorporate Floor¶ in luxury hotelseg Theme Parks for the Youngeg Shopping Festivals for Women



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Psychographic Segmentation :

Basis of Lifestyle Analysis / People¶s AIOHelps to tap people beliefs / interests / traits

Eg Tourism through µadventure sports¶ for outdoor freaksEg Weight Management programs at fitness centresEg µHep¶ Foreign Bank Card v/s µStaid¶ Nationalised Bank



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Behavioral Segmentation :

Basis of Benefits Sought or responses expected

Usage Levels / Brand Loyalty / Distribution Channels UsedEg Marriott Chain : Marriott / Courtyard / Residence Inn / Fairfield Inn



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Volumes Segmentation :

Heavy Users / Medium / Light / Non-UsersPareto principle may apply (80:20)Helps in customer retention strategies

Helps in moving users up-the-usage-chainEg HDFC Bank¶s netbanking service



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Segmentation Spectrum in ServicesSegmentation Spectrum in Services

Very Broad Spectrum ± Service Attribute Driven

Eg Solicitor¶s Firm = > Individual / Corporate ClientsEg SEBs = > µOne-size-fits-all¶ approach



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Extreme SegmentationExtreme Segmentation

Can we have a Segment of One ?

Inherent Heterogeneity => OpportunityLeveraged Effectively = > Customization Strategy

Eg Large Accounts Businesses => Segment of OneEg Advertising / Consulting => Account /Relationship Manager



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Extreme SegmentationExtreme Segmentation

Can we have µMass Customization¶ ?

Customization around Standardization : Hotels / In-Roo

Customer usage Customization : ATMs / Salad Bar

P-o-P Customization : Health Care / Counselling

Modular Customization : MBA Majors / Tourism



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Benefits of SegmentationBenefits of Segmentation

Easier Marketing : Less Complexity , Smaller UniverseAccurate Marketing : Giving-what-they-want,Customization

Efficient Marketing : Maximum-Bang-for-Each-Buck

Identify & Develop Niche Markets : New Markets / New Buyers



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Segmentation : Mini Case StudySegmentation : Mini Case Study

Banking Services

1. Economic System :

Agriculture Sector : Large / Medium / Small /Marginal

Industrial Sector : Large / Medium / Small /Co-operativServices Sector : Profit Motivated / Not-for-Profit



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Banking Services Segmentation..ContdBanking Services Segmentation..Contd

2. Demographic :

Households : HIG / MIG / LIGGender : M / F : Working Women / HousewivesExpatriates : Foreigners with brand exposureTeenagers : Hostelites



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Banking Services Segmentation..ContdBanking Services Segmentation..Contd

3. Psychographic :

Globe-Trotting Class : µGlobal Gold Card¶

Entry-Level Young Class : Co-Branded CITI-MTV Card

4 . Behavioral :

Brand Loyalty Benefits : Free Cr Card to SB A/C Holders



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Global ImpactGlobal Impact

Multiple choices,difficult decisions.



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SSD SMG L3A Segmentation