Segmentation, Targeting and Positiong Market Segmentation: Market Segmentation is a technique for developing effective marketing strategies and

can be defined as ‘ the process of separating out distinctive groups of buyers with similar needs and mind sets into manageable clusters – in order to develop more focused marketing strategies’. Segmentation of buyers can be done for B to B markets at two levels; the company level (the type of company, size etc) and also at the individual level (type of decision maker, psychological type.) Segmentation helps in: • More focused marketing strategies • More effective product development and marketing programs • More effective organization structure, especially for sales, service, distribution. A specific technique of segmentation is to take two dimensions and plot them against each other. For example take two variable age and income levels Age group High Very high Children Teenagers Young adults Families-young children Families- teenagers Families- empty nesters Elderly For each of these segments it is possible to do a motivation hygiene factor analysis to characterize the distinctive turn-ons and turn-offs Key questions to be answered are: • What are you going to do with your segmentation anyway, once you got it? • Is your segmentation genuinely unique? • Does 20% of the market segments represent 80% of the market value? The process of STP: Market Segmentation positioning 1. Identify segment variables and segment the market concepts 2. Develop profiles of resulting segments Market targeting 3 Evaluate attractiveness of each segment 4.Select target segment Market 5.Identify possible positioning Income level Low Medium

6. Select & develop and communicate the chosen concept

Procedure for market segmentation 1. Survey stage: exploratory interviews, focus groups for qualitative information and questionnaire to collect data on attributes and their importance rating, brand awareness and brand rating, usage patterns, attitudes to product category, demographics geographic, psychographics, media graphics of the respondents 2. Analysis stage, using factor analysis to remove highly correlated variables and apply cluster analysis to

Key parameters for segmentation are: geographic. user/non-user. Evaluate the opportunities in each and choose for targeting Two factors: 1. seller similarity. substantial. service on which of these should we focus. behavior. accessible. company size..) * Situational factors (Urgency. Company’s objectives and resources Market attractiveness: parameters are chosen. rating and value calculated as above. One way to discover new segments is to investigate the hierarchy of attributes the consumers examine while choosing a brand Segments to be effective must be measurable. invite bids for every purchase) * Purchase criteria (quality. and attitude to product. Profiled in terms of distinguishing attitude. product quality. weights assigned and each segment evaluate. Segment attractiveness 2. price.create specified no. promotional strength. psychographic. unit costs and so on. customer requirements) * Purchasing approaches (tender based. loyalty. specific applications. demographic. Demographic. Selecting the market segment: rating Value . Weights should be assigned. size of order…) * Personal characteristics (Buyer. Basis for segmenting business markets: * Demographics (industry. purchase. of maximum different segments 3. Profiling stage. buyer readiness. user rate. similar values) * Power structure (who dominates. and benefits sought. location) * Operating variable (technology. Weight Market size Market growth rate Historical profit margin Completive intensity Technological requirements Social political legal aspects Impact o environment Energy requirements and so on Business strength can be measured in terms of market share. finance .) Market Targeting: 1. psychographic. brand equity distribution network. differentiable and actionable. Behavioral (Occasion for use. growth. Identify market segment 2. preferred supplier basis. media patterns.

g. • . May lead to a superior image. microscopes Market specialization Full market coverage. IBM Undifferentiated. a program to appeal to a broad market segment.g.g. g. coke. Differentiated Marketing: A firm operates in several segments with different marketing programs for each segment e. IBM Undifferentiated Marketing: Ignoring segment differences and going after the whole market with one offer.• • • • • Single segment concentration e. differentiated and Concentrated marketing • • • Ignore segment differences Go after the whole market with one offer to appeal to broadest market segment Enormous cost economies in production. all customer groups. distribution and promotion because of standard product Is rare because of competition In a single market segment focus a firm can save costs by focusing marketing mix only in that segment. small car segment Selective specialization e. business Product specialization e. with products they may need e.g. focus on govt. Design a product.

Sign up to vote on this title
UsefulNot useful