Chapter : 8

Market Segmentation and Targeting

Objectives of the lesson

Need for market segmentation Market segmentation levels The selection of segmentation Effective segmentation Target market selection process

Maruti Udyog Limited

Maruti800 Alto Zen Wagon R Versa Esteem Baleno Swift

Market Segmentation
Dividing the market by grouping the
customers with similar tastes, preferences into one segment is called segmentation

Market Segmentation Levels

Segment marketing
Individual marketing Niche marketing Local marketing

Market Segmentation Levels

Segment marketing Dividing the market into different segments on the basis of homogenous need.

Segmented on basis of broad similarity with regard to some attributes

Segmentation is also sometimes identifying, capturing & retaining potential new markets

Market Segmentation Levels

Individual marketing Extreme marketing in which marketers focus on individual customers.

Keep track of individual tastes & preferences of individual customers

Many companies are approaching individuals through e-mails to promote their products.

Market Segmentation Levels

Niche marketing Marketers effort to position their product or service in smaller markets that have similar attributes and have been neglected by other marketer Segment further divided into sub segments to cater unsatisfied needs of small group is called as niche.

Market Segmentation Levels

Local marketing marketers offer customized products to suit the local markets. THINK GLOBAL ACT LOCAL
McDonalds introduced Indianized products such as AlooTikka, Chicken, Patties, Paneer Salsa, Chicken Mexican...

Bases for Consumer Market Segmentation

Market Segementation

Geographical
Regions, cities, states, countries

Demographic Age, gender, income, occupation, religion, social class, family size

Psychographic Life style, personality, values, beliefs

Behavioral Occasions, Benefits, Usage rate, Loyalty status

Bases for Organizational Market Segmentation

Market Segementation

Demographics

Operating Variables

Personal Characteristics Of the Purchaser

Situational

Purchasing Approaches

Bases for Organizational Market Segmentation

Demographics:
Industry-Certain industry can segment their markets
Industry Financial service

Insurance firms Banks Stock brokerage firms Company size Small & Large Customer location Proximity

Bases for Organizational Market Segmentation

Operating Variables:
Company technology Product and brand use status Customer capabilities

Bases for Organizational Market Segmentation

Purchasing approaches: Organizations purchasing function Relationships among the buyers and sellers
General purchasing policies

Bases for Organizational Market Segmentation

Situational factors
Urgency of order fulfillment Product application Size of the order

Effective Segmentation
Measurable Substantial Accessible

Differential
Actionable

Target Market Selection Process

Evaluating the Market Segments

Selecting the Market Segments

Selecting the Market Segments

Single Segment Concentration: Focusing on a single segment gives the marketer the advantage of high sales as all the efforts are concentrated on that one segment
Example: Mercedes concentrates on upper income group

Selecting the Market Segments

Selective Specialization: Process in which the company focuses its resources on a few segments and develops its expertise in fulfilling the needs of those segments

Selecting the Market Segments

Product Specialization :
The firm makes a certain product that it sells to several segments Example: Microscope manufacturer who sells to university, government, and commercial laboratories.

Selecting the Market Segments

Market specialization: The firm concentrates on serving many needs of a particular segment Example: A firm sells assortment of product to university laboratories.

Selecting the Market Segments

Full market coverage: Company targets the full market rather than any specific segment.
Example: Hewlett-Packard targets the full market for its printers.

Other Consideration
Ethical choice of market targets Segment interrelationships and super segments Segment-by-segment invasion plans Inter segment cooperation