Target Marketing1

7/30/2019 Target Marketing1

1/85

Target Marketing


2/85

Socio-Economic Classification

Urban Pakistan


3/85

Variables Used: Education of Chief earner +

Occupation of the chief earner

Chief Earner: The member of the household whocontributes the most to the household and bears the

greatest proportion of the overall household

expanses.


4/85

Rationale for the classification of household on these two

variables are:

1. The consumption, income and lifestyle of a household is

strongly correlated with how educated and economically

sound the chief earner is.

2. Income alone is not the true indicator as it is highly

misinterpret. It is either understated or overstated.3. In many households the chief earner is also the head of

household. In such cases behavior/opinion/attitude of the

chief earner may influence the behavior and lifestyle of all

other members.

According to the population survey of Pakistan 1998, there are

6,24 million urban households. The average urban household

size reported is 6.8


5/85


6/85

A1

Most urbanized, predominantly metropolitan class

Most educated and affluent group

Chief earner self employed/employed/professionals,

medium/large businessmen or senior officers, executives in

government, private or public limited companies.

Substantial percentage of house wives are either graduates or

post-graduates.

Extremely high durable ownership with high penetration of

entertainment durables.


7/85

A1

Extremely high durable ownership with high penetration of

entertainment durables.

Highest consumption of packaged edible and daily use products.

Use of high-tech items such as personal computers, internet

connection, credit card and mobile phones.

Greater per capita income smaller average household size

Highest consumption of both electronic and print media

Videos, elite magazines and English movies are possible media

for marketing.


8/85

A2

Broadly labeled as well educated employed class of urban

Pakistan

Chief earners in A2 class households are predominantly

postgraduates working as lower/middle executives or officers in

government/semigovernment institutions.

High penetration of all large, brown and white appliances.

Entertainment durables such as decoders for satellite channels,

Cd players etc.

House wives are reasonably well educated and have a fewer

number of children.


9/85

A2.

Convenient packaged items i.e. packed spices and achaars are

part of kitchen budget.

Bank account ownership of chief earners and housewives is

relatively higher than lower SECs

Media consumption is quite high.

Reachable by urdu, English daily morning paprers.

Television viewer-ship, radio listener-ship and magazinereadership is substantial.


10/85

B

Exhibits characteristics of an upper middleclass. In almost half

households, chief earners are small sopkeepers, one quarter arelower/middle officers or executives and remaining are

supervisors.

Majority of chief earners have college education (i.e.intermediates, graduates) while house wives have either some

college education, or are matriculates.

On an average, household have three children (persons less

than 12 years of age).

Half of the HHs who have children send them to English

Medium schools.


11/85

B

Relatively high consumption of squashes /red syrups and

shampoo as compared to lower SEC.

Consumption of most packaged items is as high that in A2 class

with exception of noodles & cereals.

Substantial penetration of durables such as air conditioners,

freezers, cooking ranges, 20 inch TV sets.

90% in this class can be reached through either print or

electronic media.

30 % listen to radio and read magazine.

This class is quite reachable through Urdu video cassettes.


12/85

C

Class which can be said to be small retailer class of urban

Pakistan.

In 605 C class households, the chief earner is a small

shopkeeper.

Education distribution of chief earner is broad ranging fromprimary to post graduate/professional.

30% house wives are illiterate.

Household size and presence of black and white TV are higher

than 3 upper SECs.


13/85

C

27% of households have telephone connections.

Penetration of expensive durable is low.

There is a substantial usage of packed items and

essential durables as sewing and washing machines arewidely owned.

Individuals in this class can be reached through Urdu

monthly digests, television, radio and Urdu newspapers.


14/85

D

The lower middle class of urban Pakistan

Owns major brown household durables and send children

mostly to Urdu medium schools.

The chief earners in this class are; skilled workers, small

shopkeepers, and non-executives employees with some school or

college education not exceeding intermediate.

Consumption of packed edibles and FMCGs is moderate. This

class can be reached through monthly digests, television, radio,

and Urdu newspapers.


15/85

E1: This class owns very basic durables such as black and white

television sets, bicycles, sewing machines, etc.

In half households, the housewife is illiterate.

The chief earner has only some basic education (510 years).

HHS are finaced/run by chief earners who are skilled/unskilled

workers or petty traders, i.e. the lower status occupation

categories.

On an average more children are present per household than

upper SECs.

70% are media contactable.

They can be reahed mostly by television and Urdu newspapers

especially the afternoon papers.


16/85

Classification of Socio-Economic Classes by Provinces

Punjab Sindh NWFP Baluchistan

A1 2% 4% 2% 2%

A2 3% 4% 4% 5%

B 10% 10% 9% 7%

C 18% 19% 18% 16%

D 21% 22% 24% 205

E1 22% 17% 13% 17%

E2 24% 24% 30% 32%


17/85

Socio-Economic Classes in Metros/Small Towns

Karachi Lahore Islamabad/Rawalpindi

RemainingUrban Centers

A1 4% 3% 4% 25

A2 4% 4% 5% 4%

B 11% 11% 15% 9%

C 19% 19% 17% 18%

D 23% 23% 27% 205

E1 17% 20% 185 20%

E2 22% 20% 14% 27%


18/85

Average number of 12+ Years Household Members

A1 A2 B C D E1 E24.89 5.07 5.25 5.38 5.14 5.04 4.48

Average Number of Children

A1 A2 B C D E1 E2

2.67 3.00 2.89 3.06 3.14 3.19 3.26


19/85

Household Size in each SEC

A1 A2 B C D E1 E2

6.6 6.93 7.14 7.62 7.46 7.49 7.47

5% of households in A1 class are 2 members household.

14% in A1, 11% in A2, 10% in B class are 4 members HHs.

17% in A1, 18% in A2, 15% in class B are 5 member HHs.

10% of HHs in E1 and E2 are 9 member HHs.

15% of A1 HHs, 185 of A2 HHs, 20% of B HHs, 24% of C HHs,

21% of D HHs, 22% of E1 HHs and 22% E2 HHs are 10 or more

than 10 member households.


20/85

Number of Earners

No. ofEarners

A1 A2 B C D E1 E2

1 61% 59% 60% 55% 58% 58% 56%

2 21% 26% 24% 25% 24% 25% 24%

3 12% 8% 10% 12% 11% 12% 12%

4 4% 5% 4% 65 5% 4% 5%

5 or more 2% 2% 1% 2% 2% 3%


21/85

Defined

Identifying and communicating with groups

of prime prospects


22/85

Has the target changed?

Is it going to be profitable?What is the rationale for

selecting this target?

Who Is Going To Buy YourProduct?


23/85

Exhibit 4.1:

The head andvisual attracts the

prime prospects
http://www.brookhillsteeplechase.com/


24/85

Marketers have a tendency togeneralize

Yet, we know betterA cardinal rule in marketing

has always been to know yourmarket

Marketing Generalization


25/85

Target marketing

Defining Prime Prospects


26/85

Exhibit 4.2:This Internet site

attracts musicians

and buyerswith a

novel idea, TheyBuy it. We pay you.
http://cybertunes.org/


27/85

Where Do We Start?

Census Data

Minority Markets

Defining Prime Prospects(continued)


28/85

Households

Household Income

Spending

Marrieds

Birthrate

Population

Defining Prime Prospects(continued)


29/85

What other demographic factors

do you think might be important

in defining prime prospects?


30/85

Marketing concept

A management orientation that views the needs ofconsumers as primary to the success of a firm

Customer valueheart of concept

Develop customer relationship ( customerorientation )vis a vis making a sale

Target marketing , positioning, value proposition

Market intelligence- to develop total marketing

programs Profitability vs sales vol

Continuous improvement

Customer focused organizational structure


31/85

What is a product

A bundle of ingredients put together for sale

as something useful to a consumer

Represent a bundle of satisfactions,

WEIGHTAGE GIVEN TO different

satisfactions, designed for different groups

Matching people with benefits creates

loyalty & insulation against competitive

attacks


32/85

Brand Loyalty -Six segments

Nationalbrand loyal- buy single national brandat regular price

National Brand Deal-purchases made on price /better deal- more store switching

Private label loyal- segment buys the private labeloffered by the store where they shop.

Private label deal-segment shops at many stores

and buys the private label of each store on dealNational brand switcher- switch regularly among

various national brands in the market.

Private label switcher- segment isn't very deal

prone, buys private labels at regular price.


33/85

Market is a group of people:

Who can be identifiedWho could use our product

Who could afford to buy it

Who can be reached

What Is a Market?


34/85

Some trends to watch

Population- determine fastest growing

markets

Income- and spending- discretionary

Living patterns- singles, single parents,

childless young couples, dual earner

married couples with children, empty

nesters


35/85

Market

group of people who can be identified by somecommon characteristic, interest, or problem, use a

certain product to advantage,

Can afford to buy it, and can be reached through

some medium

EG: IDB, CB, FB, NLB- market constituencies

Concept of Majority fallacy: initial entrants

into a field will do good, and appeal to abroader group, later entrants may gain a larger

market share by tapping minority segments-

niches


36/85

Exhibit 4.4: Visualpuns attract people

with lawns that have

weeds
http://www.novartis.com/


37/85

From Generic to Product Markets

Generic MKT- market with broadly similar needs

and sellers offering various , diverse ways of

satisfying those needs.

Looks at markets from a customers point of vieweg Status Seekers have different ways to satisfy

their status needs-MERC, designer outfit, Luxury

cruise.

Sellers in the generic status seeker market focuss

on the need the customer wants satisfied- not on

how the sellers product is better than that of

another producer.


38/85

From Generic to Product Markets

Product MKT- A market with very similar

needs and sellers offering close substitute

ways of satisfying those needs

If the status seeker wants to satisfy his

status need with a new expensive car(

Product market)In this product market

there may be options-Merc, Lexus, BMW,

Jaguar-competing for consumers money

h i i i


39/85

What is competition

Product category &subcategories, What products in what categories compete for

consumers attention and $

Marketers need to answer a number of questio

:

1. Who are our competitors

2. What brands

3. What other product categories4. Are there many brands or few

5. Which are strong, which are vulnerable

6. Are there any strong well established brands, o

is the market volatile

h i i i


40/85

What is competition

A major purpose of target marketing is toposition a brand effectively within a

product category ( eg soft drinks) or

subcategory( lemon lime soft drinks)

Products are normally competitive amonga segment rather than across several

groups EgShampoos

Competition more broadly includes all the

forces that inhibit the sale of the product- (

same product class or subclass)


41/85

Market Segmentation Geographical Segmentation

Product User Segmentation

Lifestyle Segmentation

Planning The Advertising


42/85

Exhibit 4.6:

Lifestyle isimportant for many

product and

services,

Congoleum says,

Floors for the way

you live.

Steps in Segmentation
http://www.congoleum.com/


43/85

Steps in Segmentation,

Targeting, and Positioning

1. Identify Basesfor Segmenting the Market

2. Develop Profilesof Resulting Segments

3. Develop Measuresof Segment Attractiveness

4. Select TargetSegment(s)

5. Develop Positioningfor Each Target Segment

6. Develop MarketingMix for Each Target Segment Market

Positioning

MarketTargeting

Market Segmentation

Step 1 Market Segmentation


44/85

Step 1. Market SegmentationLevels of Market Segmentation

Mass Marketing

Same product to al l consum ers(no segmentat ion )

Segment MarketingDifferent pro ducts to one or mo re segments

(som e segmentat ion)

Micromarketing

Products to sui t the tastes of indiv iduals and locat ions

(com plete segmentat ion )

Niche MarketingDifferent produ cts to subg roup s w ith in segments

(more segmentat ion )

Local Marketing

Tailor ing b rands/ prom ot ions

to local custom er group s

Individual Marketing

Tailor ing produ cts / programs

to indiv idual customers

Step 1 Market Segmentation


45/85

Step 1. Market SegmentationBases for Segmenting Consumer Markets

Geographic

Demographic

Age, gender,family size andlife cycle, orincome

PsychographicSocial class, lifestyle,

or personality

BehavioralOccasions, benefitssought, user status,usage rate, loyalty

Nations, states,regions or cities

Requirements for Effective Segmentation


46/85

Requirements for Effective Segmentation

Size, purchasing power, profilesof segments can be measured.

Segments can be effectivelyreached and served.

Segments are large or profitableenough to serve.

Measurable

Accessible

Substantial

Differential

Actionable

Segments must respond

differently to different marketingmix elements & programs.

Effective programs can bedesigned to attract and serve

the segments.


47/85

Segmenting

Clustering people with similar needs into a

market segment

Market segment- a homogenous group of

customers who will respond to a marketing

mix in a similar way

i i f i b d


48/85

Criteria for segmenting a broad

product market

Homogenous( similar) within- The customers in

a market segment should be as similar as possible

with respect to their likely responses to marketing

mix variables and their segmenting dimensions

Heterogeneous ( different) between- the

customers in different segments should be as

different as possible with respect to their likelyresponses to marketing mix variables and their

segmenting dimensions


49/85

Specific Targets

Single TM approach- Segmenting the market andpicking one of the homogenous segments as thefirms target market

Multiple TM approach- Segmenting the marketand choosing 2 or more segments, then treatingeach as a separate target market needing adifferent marketing mix

Combined approach- combining 2 or more submarkets into 1 larger target market as basis for 1strategy


50/85

Market Segmentation Sometimes When you talk to everybody , you

end up talking to no body

MS- The division of an entire market ofconsumers into groups whose similarity makesthem a market for products serving their specialneeds

Types :

Geographic

Product user( amt of product usagemarkets withhighest sales potentialSement divided into allusers and subdivided into H/M/L users)

The definition of usage varies with the product

category


51/85

Life Style Segmentation-AIO measure

1. Activities, leisure time, preferences, preferences

for social events, community involvement

2. Interests, family orientation, sports interests,

media usage

3. Opinion, political preferences and views onvarious social issues

Benefits and attitude segmentation- cluster people

into groups based upon what they want in a

product.

Speed Bump:


52/85

Speed Bump:

Linking the

Concepts

Using the segmentation bases youve just

read about, segment the Pakistani footwearmarket.

>Describe each of the major segments andsubsegments.


53/85

Do you think some general-market

advertising efforts are effective in

reaching ethnic groups?

Market Targeting


54/85

Market TargetingEvaluating Market Segments

Segment Size and Growth

Analyze sales, growth rates and expected

profitability for various segments.

Segment Structural Attractiveness

Consider effects of: Competitors,

Availability of Substitute Products and,

the Power of Buyers & Suppliers.

Market Targeting


55/85

Market TargetingMarket Coverage Strategies

Segment 1

Segment 2

Segment 3

Segment 1

Segment 2

Segment 3

Company

MarketingMix

CompanyMarketing

Mix

Company

Marketing Mix 1

CompanyMarketing Mix 2

Company

Marketing Mix 3

Market

A. Undifferentiated Marketing

B. Differentiated Marketing

C. Concentrated Marketing

Step 3 Positioning for Competitive


56/85

Step 3. Positioning for Competitive

Advantage

Products Position - the way the

product is defined by consumers on

important attributes - the place theproduct occupies in consumers

minds relative to competing

products.



57/85


Advantage

Marketers must:

Plan positions to give their

products the greatest advantage inselected target markets,

Design marketing mixes to create

these planned positions.



58/85


Advantage strategies

Against a

Competitor

Usage

Occasions

Away from

Competitors

Product

Attributes

Product

Class

Benefits

Offered

User Class

B

A

ED

CH

G

F

Steps to Choosing and Implementing


59/85


a Positioning Strategy

Step 1. Identifying Possible

Competitive Advantages:

Competitive Differentiation.

Step 2. Selecting the Right

Competitive Advantage: Unique

Selling Proposition (USP).



60/85


a Positioning Strategy

Step 3. Communicating andDelivering the Chosen Position.


61/85

According to Exhibit 4.9, the heavy

users of brand X are women aged 55

and older. What products would beappropriate for this target market?


62/85

NEED

Segmentation on needs, social values


63/85

NEED

" The lack of something requisite,desirable, or useful;

the lack of the means

of subsistence."

Maslows Hierarchy of Needs


64/85

Maslow s Hierarchy of Needs

PHYSIOLOGICAL OR SURVIVAL NEEDS

MOST NEEDS HAVE TO DO WITHSURVIVAL PHYSICALLY AND

PSYCHOLOGICALLY



65/85



SAFETY NEEDS

ON THE WHOLE AN INDIVIDUAL

CANNOT SATISFY ANY LEVEL

UNLESS NEEDS BELOW ARE

SATISFIED



66/85



SAFETY NEEDS

LOVE, AFFECTION, ANDBELONGINGNESS NEEDS



67/85



SAFETY NEEDS


ESTEEM NEEDS



68/85


SELF-ACTUALIZATION

NEED

FOR

MASLOW EMPHASIZES NEED FOR SELFACTUALIZATION IS

A HEALTHY MANS PRIME

MOTIVATION



69/85


SELF-ACTUALIZATION

NEED

FOR

MASLOW EMPHASIZES NEED FOR SELFACTUALIZATION IS

A HEALTHY MANS PRIME

MOTIVATION

SELF-ACTUALIZATION MEANS ACTUALIZING

ONES POTENTIAL BECOMING ALL ONE IS

CAPABLE OF BECOMING



70/85



SAFETY NEEDS


ESTEEM NEEDS

SELF-ACTUALIZATION

NEED

SOCIAL VALUE GROUPS


71/85

SOCIAL VALUE GROUPS
http://www.insightmc.com/insightmc_groups9.htmhttp://www.insightmc.com/insightmc_groups8.htmhttp://www.insightmc.com/insightmc_groups7.htmhttp://www.insightmc.com/insightmc_groups6.htmhttp://www.insightmc.com/insightmc_groups5.htmhttp://www.insightmc.com/insightmc_groups4.htm


72/85

CONTENTED

CONFORMERS

Want to be 'normal' so go

along with the herd.

Accepting of their lot, they

are comfortable and

contented in the secure

world they have created.


73/85

DI SCONNECTED

Stand apart and are

embittered, and

therefore apathetic.

Tend to live in the ever

present now, not

thinking of tomorrow'sconsequences.


74/85

ESTEEM SEEKERS

Acquisitive andmaterialistic they

aspire to what they

see as the symbols

of success, both in

terms of

'possessions' and

'experiences'.


75/85

I NNOVATORS

Self confident risktakers, they seek out

the new and the

different and set

their own targets to

achieve.

SELF ACTUALISERS


76/85

Seeking the highest levels of

personal development,

they are people and relationship

oriented and consequently are

tolerant and empathetic.

Innovative and experimental by

nature they are open, sociable, far-

sighted and non-materialistic.

They have the self confidence to

back their own judgment and the

vitality to sweep others along with

them.


77/85

STRIVERS

Looking towards Outer

Directedness, image and

status are important but

only to provideacceptance from their

peer group so hold on to

traditional values.

TRADITIONALISTS


78/85

TRADITIONALISTS

Risk averse, they

look to traditional

values and

behaviors for

guidance.

Quiet and

reserved, they

hang back and tryto blend in with

the crowd.


79/85

Gear up for Generation Next


80/85

They were born between 1976 & 1987. They represent16% of the population (45 million), and will be

societys key influencer group in 2005

What Are Their Values?

They want it all -- fame, luxury, fortune

Self-confident, assured, not intimidated

A sense of entitlement -- they want it easily andquickly

Theyre in command & control of their own destiny,play by their own rules


81/85

More likely to be ruled by their instinctsthan homework

They value the fast pace of life

Technology is an important part of theirpersona

Theyre multicultural-- tolerant, pluralistic,diverse

Highly parochial -- little interest in things

beyond their realm, they are their own******

Th t b t t h t


82/85

Theyre great consumers but tough customers

Consumption oriented, but demanding negotiators withhigh expectations

Its all about them

They must be in the spotlight, putting their personalstamp on everything

They want to form relationships with their brands, whichincludes a significant emotional component

The brand must stay fresh

It must be fun and entertaining

Dont expect em to play by the rules

They distrust the system and want to beat it

The Most Intelligent, Informed


83/85

The Most Intelligent, Informed

Consumer Ever

Concurrent with the shifts in power toindividuals is the emergence of an incrediblysavvy, wise consumer.

Key trend drivers:

More access to & utilization of information

More competitors aggressively seeking their

business


84/85

Hard-earned lessons learned during thedownsizing and recession of the early 90s

Greater buying power

More experience in finding deals anddiscounts

Higher levels of education

Higher levels of sophistication

This increasingly discerningconsumer will demand more recognitionand respect from both advertisers andagencies


85/85

More sophisticated consumers (not

just in urban areas) demand moresophisticated products: design andfunction. (e.g targets designers)

Successful brands must offer morethan status: a good value and connection

with consumers personal values andpriorities

Documents

Target Marketing1