MARKET

SEGMENTATION

Mahajan Samant
 MARKET SEGMENTATION
BASIC IDEAS ( for M.S)
1. Selection of target market.
2. Effective Marketing programs.
 RATIONALE
• “WHAT NEEDS AND WHOSE NEEDS”
• “PRINCIPLE OF DISTINCTIVE
COMPETENCE”

Homogeneous 
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SuoenegoreteH
 Targeting Options

1. Undifferentiated Mktg….ONE PRODUCT

2. Concentrated Mktg….. PARTICULAR

MARKET SEGMENT

3. Differentiated Mktg…..DIFFRENT
PRODUCT FOR DIFFERENT M.S
MARKET SEGEMENTATION
(DEFN.)

Process of identifying group of

buyers with different buying
desires or requirements.
MARKET TARGETING (Defn.)

Decision ‘Which M.S to serve’

 ENTERING A MARKET?
FIVE STEPS
1. Determine those attribute along which to
identify the possible existence of distinct M.C.
2. Determine size & value of diff / vari. M.S
3. Determine how existing brands are positioned.
4. Look for opportunities in M.s’s not /
inadequately being served.
5. Determine co-related characteristics of
attractive M.S.
 REQUIREMENTS FOR EFFECTIVE MARKET
SEGMENTATION

1. Measurability

2. Accessibility

3. Substantiality
 BENEFITS OF SEGMENTATION
1. For guiding Marketing Strategy.
2. Better position to spot & compare mktg.
opportunities.
3. Finer adjustments of products & mktg.
appeals possible.
4. Mktg. programs & budgets based on clearer
ideas of the response characteristics of
specific M.S’s
 BASES FOR SEGMENTATION

1. GEOGRAPHIC

2. DEMOGRAPHIC

3. PSYCHOGRAPHIC

4. BEHAVIORAL
 MARKET
TARGETING
 I. UNDIFFERENTIATED
MARKETING

• Focus : ‘What is common’ (not ‘What is different’)

• Appeal : Broadest number of buyers.
• Rely on : Mass channels/ advts./ universal themes.
(Coke) Endow product, superior image in prosp’s
MIND
{Cost Economics, Mass Production} Low M.R.
COST(?)
Later, Less profitable segment (!)
 II. DIFFERENTIATED
MARKETING
• Focus : Two or more segments & separate
product.
• Appeal : Customer’s Desires
• Rely On : Creating more total sales, Concern
about increasing cost, optimality of strategy.
Later, over – differentiation  reverse(!)
CGL MEMO
 III. CONCENTRATED
MARKETING
• Focus : Large share in one or a few sub-market.
• Appeal : Customer’s Delight (Good MKT
Position)
• Rely on : Greater Knowledge, Special
Reputation. Enjoy operating economics (due)
specialization
Earns high rates of ROI.
Later, higher than normal risk.
 FIVE FACTORS FOR ACTUAL CHOICE

1. Company resources

2. Product homogeneity

3. Product stage in life cycle

4. Market homogeneity

5. Competitive MKTG. STRATEGIES

MAJOR SEGMENTATION
VARIABLES
 I. GEOGRAPHIC
1. World Region
2. Country
3. Metro (city)
4. Town
5. Village
6. Population density
7. Climate
8. Others
 II. DEMOGRAPHIC
1. Age
2. Sex
3. Gender
4. Income
5. Occupation
6. Education
7. Family Size
8. Family Life Cycle
9. Religion
10. Race
11. Caste
12. Special Community
13. Nationality
14. Others
 III. PSYCHOGRAPHIC
1. Social class
2. Life style
3. Personality
 IV. BEHAVIORAL
1. Occasion
2. Benefits
3. User status
4. Usage rate
5. Loyalty status
6. Readiness stage
7. Marketing Factors
8. Attitudes towards Product
 Levels of market segmentation
Starting point… Mass Marketing

Example: Ford T car

Coke 6.5 Ounce Bottle !

MANY CRITICS HENCE ,

MICRO MARKETING
 MICRO MARKETING
• SEGMENTS
• NICHES
• LOCAL
• INDIVIDUALS
MARKET SEGMENT……..
Consists of group of customers who
share a similar set of wants.
 NICHE…..
is a more narrowly defined group
seeking a distinctive mix of benefits
• Customers willing to pay a PREMIUM.
• Niche unlikely to attract competitors.
• Niche gets certain economics through
specialization
• Profit size & growth potential.
e.g. Estee lauder, Hallmark
LOCAL….
Target Marketing is leading to mktg.
programs tailored to the needs &
wants of local customer groups,
areas, neighborhoods.
e.g. Citibank's different services to
its branches.
INDIVIDUAL……..
Customized.. One to one
marketing!
Leading to mass customization,
On-line CHOICEBOARD!
 ADVERTISING
1. Any paid form of non-personal presentation of ideas, goods
or services by an identified sponsor.’ …Kotler.
2. ‘Contribution to brand image.’ .David Ogilvy
3. ‘Intervener in all aspects of economic & cultural life.’
…. Pope VI
4. ‘Paid, non-personal communications through various media
by business firms, non profit organizations & individuals
who are in some way identified in the advertising message
& who hope to inform or persuade members of a particular
audience.’
5. ‘Nourishes consuming power.’ ..Sir W. Churchill.
 POSITIONING
New approach to communication ‘POSITIONING’
‘BATTLE to overcome universal reason given for
FOR problems that develop ‘failure to communicate.’
Positioning starts with a product, a piece of
YOUR merchandise, a service, a company, an
MIND.’ institution or even a person. Perhaps yourself.
P is what you do to the mind of the prospect i.e.
position your product in mind of the prospect
AL RIES
& 6 INCHES OF GREY MATTER = MIND =
JACK TROUT BATTLEGROUND
 VARIOUS ERAS

1. PRODUCT ERA
• Fifties in USA & Seventies in India.
• Attention on product feature.
• Attention on customer benefits
• Unique selling proposition Rosser Reeves
• Decline due technology + me too products
‘new & improved jokes
 2. IMAGE ERA
• Architect ‘David Ogilvy’
• Every advertisement is a long term investment
in the image of a brand.
• Me too companies kill image era.
• E.g. Rolls Royce, Marlboro
• Xerox exceptions due to technical
achievement.
 3. POSITIONING ERA
• IBM…………. Invented the computer?
first company to build a computer position
‘Sperry Rand’

• Amerigo Vespucci……..who discovered USA?

{15th Century}
Separate Continent
Not Asia
Wrote!! ‘Christopher Columbus’