MARKET SEGMENTATION

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MARKET SEGMENTATION : 

MARKET SEGMENTATION

Mass marketing : 

Mass production, mass disribution,mass promotion for one product for all buyers. Largest potential market, lowest costs, higher margins. increasing breakage of markets, explosion of advertising medias and distribution channels. so mass marketing is no more relevant or difficult. Mass marketing

Market segment : 

It consists of a group of customers who share a similar set of needs and wants. The company can offer better design,price,disclose,deliver,fine tune the marketing activities for each market segment. Flexible market offering for the market segment. Naked solution-base model of four wheelers. Discretionary options-carries an additional charge-power steering, air condioner. Market segment

Market segmentation : 

It is the process of dividing a heterogeneous market into homogeneous subunits. Why market segmentation? buyers having different needs and wants. purchasing power may vary. different geographical locations. different buying attitudes and habits Market segmentation

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Hero honda Price conscious customer- CD DAWN Fuel conscious customer- SPLENDOR Power conscious customer-CBZ Style/luxury - KARIZMA

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Marketing mix can be effectively used in market segmentation. Competition is limited.

Purpose of segmentation. : 

Identifying group of customers with similar wants. Analyze their buying behavior and characteristics. Providing products matching with needs. Satisfying needs while meeting organizations objectives. Purpose of segmentation.

Bases for segmenting the market : 

Customer-based Product –related Competition-related Bases for segmenting the market

Customer-Based. : 

Geographic-location of customers-based upon where people live. Rural- urban, Metro-non metro. The present situation of geographic segmentation? It is believed that rural markets are different from urban markets. Today it is gradually changing. Significance of branded products in rural markets is growing. Rural people do little shopping at their villages. Significance of brand,price,size,product features in decision making is highly considered. Customer-Based.

Need for geographical segmentation. : 

In India more than 5000 towns and 638000 villages. Nearly 87% villages have a population of less than 2000 people. Geographical size-marketing efforts. Study has conducted in five major indicators. Number of consumers. Living pattern Consumption behavior. Awareness levels. Availability of marketing-support infrastructure. Need for geographical segmentation.

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From the study report out of 784% towns with population of more than 50000,16% towns created 80% market potential value. to identify the most suited communication medium for each geographical segment. To create effective logistics service. To serve different product requirements for each geographical segment.

Demographic characterestics. : 

Age. Infants market(newly born,-1 year). Child market(1-12). Teens market(13-19). Adolescent market(16-19). Youth market(20-35) Middle-aged market(36-50). Elders or senior market(50 yrs and above)- Demographic characterestics.

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Child market power.(1-14).strong influencers and decision makers. Youth market-financially secure, more educated, powerful youngsters. Tastes are changing so quickly firm which is segmenting and targeting youth should remain relevant and contemporary. Product should not be outdated. V channel.

income : 

Low income. Low middle income. Middle income. Upper middle income. Higher income. income

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Each of this segment requires appropriate price and customized products. As the family income increases the purchasing power is also increses,marketer has to understand the spending pattern of a customer according to the income shifts. Nirma-Middle class focussed Profitability from the bottom(general discussion).(BOP),Marketing to the poor.

gender : 

Male and female. Have different attitudes and behave differently. Shopping styles are different. Decision making methods are different. More serials on T.V channels are focusing women. Emami has introduced fair and handsome for men. Sharukh khan as the brand ambassador. gender

Marketing to women : 

Educated,assertive,confident,financialy secured. Marketing to women

Group no:5 : 

Demographic segmentation-Social class,Generation,occupation,Education,marital status, family size, structure of family. Psychographic variables. Buyer readiness. Presentation on Wednesday 11-05-2011. Group no:5

Product-related segmentation : 

Product-use situation. One Product can be used for different use situations or occasions. Dividing the market of a product on the basis of different product use situations or occasions. Occasions- Birthday,marriage,festivals,parties. Product-Biscuit. Consider the biscuit consuming market and observe different biscuit consuming situations. It can be served as a snack with the evening tea. Product-related segmentation

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Can be served as an item in a party. Can be distributed on a break during tiring working day. With the bed coffee. During travelling. School going children can use it during the intervals. When a person is hospitalized. Senior people can use it.

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Watch-identify product use situations-divide the market-offer different range of watches. Greeting cards. Cakes. Umbrella. Identify product use situtions,divide the market, make product modifications for each situation, create strategies to expand sales of your product through this situations.

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Product-benefit segmentation. Buyers are classified according to the benefits they are looking to get from a product. It is based on the Attributes (characteristics) of products, as seen by the customers.” Many marketers now consider benefit segmentation one of the most useful methods of classifying markets.”

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Shampoos-benefits-cleaning of hair,condititoning effects, medicinal properties, attraction of hair. Clinic- plus,chic,pantene,sunsilk,meera ayurvedic, all these products addresses different benefit segmentation in shampoo market. Toothpaste-benefits- Mobile phones- Multi-benefits or combo benefits from one product.

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Product consumption related segmentation. On the basis of usage rate the customers can be divided into segments. Heavy users. Moderate users. Light users. Cigarette-chain smockers,moderate smockers, rare smockers. Light users should get more initial offers. Which one is more profitable, getting one heavy user or more light users?

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Decision criteria based segmentation. Every customer is having a set of decision criteria to choose a brand or product. Price,service,technology,features.

Competition-related segmentation. : 

Based on the customer loyalty. Hard-core loyal-strong brand loyal. Newspaper readers,smokers,tea drinkers. Understand product strength with respect to the competitor. Soft-core loyal-loyal to two or three brands. Which brand is more competitive and why? switchers-never stick to a brand. Is it due to the behavior cased by indifference,habit,non-availability of competing brands, low price. Competition-related segmentation.

Slide 28: 

Customer loyalty programme. Retailing,Aviation,hospitality-providing awards for loyal customers. points to the regular customers.

Behavioral segmentation. : 

Based on the buyer behavior of specific products. Knowledge, usage level, response, attitudes. Behavioral variables such as occassions,benefits,user status, buyer readiness stage, loyalty status and attitude. Behavioral segmentation.

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User-status. Non-user ,ex- user, potential user, first-time user, regular user. Attitude. Enthusiastic,posititve,indifferent,negative,hostile.

Multiple bases for segmentation : 

Much more clarified segmentation. Rural customers-changing patterns. Clear inputs for Perfect targeting and positioning. Multiple bases for segmentation

How to segment a market. : 

Survey stage. Analysis stage. Profiling stage. How to segment a market.

Slide 33: 

Survey stage. Focus group discussions and interviews. Questionnaire. Demographics,geography,psychographic,and media habits. Attributes on a product and its rating. Brand awareness and brand ratings. Usage pattern. Consumption and spending pattern.

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Analysis stage. Factor analysis. Cluster of customers should be identified.

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Profiling stage. Each cluster is profiled in terms of demographics,geography,psychographic,and media habits ,Consumption and spending pattern.

Target marketing : 

Strategic decision. Segmentation-dividing common groups-identifying process. Target market-deciding which group has maximum market potential and the approach to that specific group-decision process. Target marketing

Five strategies : 

Single segment concentration. Specific segment ,designs according to that segment. Dcsmat-MBA Selective specialization. Different products to different segments. Airlines-first class, business class, economy class. product specialization. One product for several segments. Dettol. Five strategies

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Market specialization. For specific market, different products. Hospital equipments. Full market coverage. Trying to serve all the customers with their needs. Coca-cola. Differentiated marketing. Undifferentiated marketing.

Positioning. : 

It is the strategy/ that enables a firm to competitively and strongly place its brand/ in the customers mind/ such that it becomes the strong brand. Benefits of the brand. Commitments of the brand-Aquafina. Differentiation of the brand. It should reflect target segments. Feelings,beliefs,aspirations,hopes. Maruthi 800-economy small car maruthi esteem-aspirational mid sized car. Positioning.

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Make differentiation through Product, service,channel,price,people,image. Product-appy fiz Service-home banking. Channel-retailing and nano,amway. Price- karbon mobiles. People-I.T firms. Image- social responsibility.

To select the positioning platform : 

To select the positioning platform

Niche marketing : 

A niche is more narrowly defined group. Niche will be identified by dividing market segment/ into different market sub segments/ or by dividing a group within a distinctive set of traits who seek special combo of benefits. ESPN-STAR SPORTS-STAR CRICKET,shalome channel CIGARATTE-Filtured,Unfiltered. Magazines like Yatra-Mathrubhunmi. Music lovers-Avial. Dabur-ayurvedic toothpaste-red,green. Niche marketing

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More profitable. Less competition. Increased customer satisfaction. Increased market efficiencies. High risk in niche identification and pricing. Has to be consistent in product modifications.

Local marketing. : 

“Worlds local bank”-HSBC bank Marketing activities which is focusing on needs and wants of local customers. Movie-Happy Days. Local needs are different. National ads-high expense. Manufacturing and marketing costs are high. Logistical problems. Brands overall image may be badly affected. Local marketing.

Individual marketing. : 

Individual customers are having more interest in what to buy and how to buy. Customerization. The ability of a firm to respond to its individual customers by customizing its products,services,and messages on a one to one basis. Customization. Empowering the consumers to design the product, service offering of their choice. Individual marketing.

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The firm has to be customerized by customizing the customer. Customization is not for every firms. Paint companies. Banks. Ruff-n-tuff jeans. Online sales-fashion,movies,music. Baskin-robbins.

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