Management Science II

Dr. S.Bharadwaj

MODULE 1 Segmentation,Targeting and Positioning
• • • • Segmentation, Targeting and Positioning Definitions Segmentation Variables Evaluation of Segments Summary

What is segmentation, anyone?
• • What about targeting and positioning? Segmentation is the process of grouping people or organizations within a market according to similar needs, characteristics, or behaviors

Dividing the market into groups
• • • an entire market rarely has the same tastes and preferences it is difficult to handle all preferences too Mercedes Benz, for example (only high-end)

Targeting is the actual selection of the segment you want to serve the target market is the group of people or organizations whose needs a product is specifically designed to satisfy Positioning is the use of marketing to enable people to form a mental image of your product in their minds (relative to other products)

Indian Institute of Technology Madras

women most cosmetics. S.Management Science II Dr.Bharadwaj STP Marketing is the name of the game • • • • • • The days of “one size fits all” are over No longer can one say “You can have any colour as long as it is black” Need to follow the “horses for courses” policy . Income Age • Bicycles • Disney’s Cartoons • Pension Plans. Retirement Funds e. Gender. perfumes etc 2 Indian Institute of Technology Madras .g. • LIC Gender • • • • • Hasbro Toys Cindy for more mass marketing Moving towards mass customization in fact Levi’s Personal Pants National Bicycle Company How to segment a market? • • On what basis/bases? What are some criteria/variables? Segmentation .Variables Demographic Segmentation Age. GI Joe for boys Gillette Razors for men.

product usage. Occupation. Generation (Baby Boomers. benefits sought. Hamam for low And so on • • Income is possibly the most common basis for segmentation Other Demographic Variables Include Religion.Bharadwaj • Revlon. Ethnicity. all International Marketing is done on a regional(geographic basis) The “Same” Honda Accord is different in different countries ! Most MNCs vary their products according to country special tires in the Middle East Taj: AP .Management Science II Dr. Ralph Lauren Income • • • Toyota Lexus for high end Camry for the middle of the roaders Corolla for low end HLL soaps . Yuppies) and so on Geographic Segmentation • • • • • • snow boots in the Northern part of USA Of course. Deepavali card 3 Indian Institute of Technology Madras .Valentine’s Day Card.Dove for high end. S. Generation Next.more coconut and so on Behavioral Segmentation • On the basis of occasions. Kerala .hot food. brand loyalty Occasions • • • Y2K Cruises Hallmark Cards a greeting card for every occasion .

which one to choose? What are the criteria? Is there potential sales.Management Science II Dr.example would be Colgate Tartar Control for Tartar User Status • • • • Non-Users Vs Current Users Credit Card Companies new card vs another card Blood Banks.Bharadwaj Benefits Sought • there are certain specific benefits sought . BudWeiser all target the heavy Bajaj M80 could be another candidate Psychographic Segmentation Lifestyle products like Raymond user Evaluation of Segments Having segmented the market. Brazil etc Potential Competition and Cost • • is it too much ? Imagine going against Microsoft in the PC OS market for someone like Unix 4 Indian Institute of Technology Madras . India. entry level cars/bikes Usage Rate • • • • • Heavy Users Vs. Light Users The Beer Market is a classic example Miller Lite. growth and profit ? • • Big Emerging Markets (BEMs) China. S.

Management Science II Dr. Maruti Potential Risk • • • environmental doing business in Iraq now Or even Kashmir Is it compatible with my current business ? • • • • Mercedes going “downscale” with E-Class will it hurt the “Mercedes” brand ? will it cannibalize my existing brand ? Air India starting a budget airline? Summary • • • • • STP Marketing is highly important Consumers are very finicky and want to feel special From mass marketing to mass customisation Segmenting is important let Bajaj Chetak. S. Maruti 800 even be examples 5 Indian Institute of Technology Madras .Bharadwaj • Tata Indica was smart in battle Vs. Fiat. Ambassador.

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