e market segmenj f ices t Cong . Mar 1 gerined i ‘the marketer's takign jde which one(s) to tar Mg, ges ™ sand kets. Some reser divide ila Kel sege™ const mal a Tesearg a segment istics: 8° rapa noeed a ‘ peristic Fats exhibit differen, os omer ®* attitudes of people bein , “safety” as a pro ay hy, oral considerations, such ™ cone py loo ere researcher then sees whether gi le, product resPO det the So ne 08" og bra Is. Te segment. For example, do peoy respon ffer in their geographic, demoyn gamer sponses © scociated Mice” im ee 7 characteris, gett an “10 pric we Uses the key is adjusting the matt want “quality cma eup? mentation schem jor mentation variables—geogay f seg) he ™ on—are summarized in © Table} rogram to reco! remmographic ychograpnic © Gagmentation Geographie © eg menta — seas on a@ 8) | : ides the marke compan can operate in one or a few i. s. The jons. In that way it can tailor marketing prog, a ing areas neighborhoods, even ind, d wants of loca is marketing such activities concentrate on getting as, called grassr00 : indivi as possible. elevant to indivi cus ed” branches that are dedicated to serve corporate “ India hav e services in such branches are cy individuals. Thi Jone oxgniaton! ee at these target Si Banks have dedicated relationship executives ve the needs 0 ‘ome banks provide valet parking facilities ar; tomized to se fb toed. who attend to jese eee ae special services to their high-net-worth customers. similarly, there are in-city” courier companis that specialize in delivering mail and packets on the same day within a spec in many cities in India lie in deli fied geographical area, usually within the city. snces in consumer preferences, purchase patterns, and behavios There are discernable differe! ; across different geographical regions in South Asia. The size and market attractiveness of diffe. ent geographical markets are important considerations while deciding on marketing efforts,» geographical segmentation is vital to marketers. There are alternative frameworks and data guid to assess the market potential of 0 different geographical regions. In India, a comprehensive repott titled RK ee BBDO Guide to Market Planning provides the market potential or purchasing aa va ee : ane rural areas based on data from 515 districts in 21 states and 3 uniet i as ese nee are developed on the basis of 24 parameters that address four bast enh ops en 2) cman pate ea eae part ens Is, and (4) extent of marketing support infrastructure Simnatl 7 choose suit ia i ctedi mati Lape suggests a set of indicators that wee oe media forthe sees a adership Surves co dilly geographical mack com ined with data available in the * ation uni fg analais® Based on andl iarkets into sociocultural regions (SCRS) * - lyses and classification of d: gions (S d of data, each region is evaluated «! anke on social, cultural, and economic factors and th , CO di fs ‘i sports edia reach. The patterns observed in the suggest the need to priori r St itize geo, ical mat 0 : i graphical markets to fo asa f Fe charket t to focus marketing efforts I i Geographical mai ke < irger ‘ of Ssuth Adan ae a vary in their coe ee of consumption potential. are used, H nes, during the hot ferences and requi ey lowever, this product is ineff and dr quirements. In at imate is hot and humid during effective in si viol 'Y Summ. i some re er season, air coolers (of deser ‘ ‘ummer, Similarly, ae particularly coastal areas” : + food habits vary significantly acros®ARI TABLE 7.1 Major SS ET SEGMENTS AND TARGETS s KS \¢ Geographic mA se tay aTUclt i So : uth, West, Noth, East i €SS-I citi : Rural and semi-urb; a eS, Class. an areas Population of ove, yoH2S, Metros, cites with a poss \ : Rural vitages go ilion Population of 0.5 milion to 4 mi Demographic between, 20.00 Population of ona Million, cities with ,000 an et 10,000, semi ne 1d 50,000 0, semi-urban areas, small towns with a Population Family size Under § years, 611 8 years, 12— on Single; young, fides ‘ Years, 20-34 Years, 35-49 years, 50-60 \ rd - Oden St Child under 6 or ver a tisten: young, maried, youngest chid unsere Gender : . » Single; other Folder, married, with children olde ee eM 8: young, marred, Income : Male, female older, married, no children under 18; "| Low (up to 240,000 ; . i eye Pa), lower mi Occupation Upper middle 4 iddle 40,001-g0 i ay sas a 60,000 pa), and high bing Oo WO OO 120.000 py, | employed (orcas, iled Workers, pety traders, sh ase ; \ : p ofessionals, cleria . Shop owners, businessmen/industri ea Sac Senior executives) Al/salespersons, supervisory levels, offcers/junior Sone ni \ Miterate, schoot - 4 Up to 4 years, sch — : Postgraduate (gene School between § and 9 years, SSC/HSC, non __§1.42,8 (general), Graduate/postgraduate (professional) : ae Graduate ‘Socio-Economic Classification (6E0) a , E1, E2 : 3 Psychographic Lifestyle : 7 a Personality _ a a on Behavioral — oe _Occasions — Rewer aca ee a _ Benefits . Quality, service, economy, speed : - a _User. status Nonuser, x-user, potential user, first-time user, regular user _Usage rate — Light, medium, heavy : _Loyalty status _ ___None, medium, strong, absolute : a Readiness stage _ Unaware, aware, informed, interested, desirous, intending to buy Attitude toward product _ Enthusiastic, positive, indifferent, negative, hostile - : regions. For example, consumers in a southern state like Tamil Nadu prefer freshly brewed coffee while consumers in many other states in India prefer tea. Even the taste and other quality param- eters of tea vary across regions—some parts of India have a distinctive preference for strong tea from the Assam region whereas consumers in other parts of India prefer Darjeeling or Nilgiri tea. In fact, this difference has prompted major tea-marketing companies to offer different blends of tea = dil i consumer preference. In the ready-to- under the same brand name in different regions based on ease and flavor preferences eat packaged food market, brands like Ashirvaad and Nae the case with curry powders ot f- ‘ in di t regions. The een : for d items they promote in differen : ‘i s also an important ae rate te product-related decisions, geographical eee ee eaeae = consideration in designing the physical distribution and pees a abana onsi ion in si South ian use sophisticated models and software to plan their phy: egmentation of markets into urban and hical s «thie reoion diff RKETS Geograp’ {kets in this region differ as RURAL MA th Asian countries as rural and ee es under the sec- rural is especially important 1n oe “Marketing Insight: Segmenting Rur ‘or detail i i i arkets in great ona variety of important paramere cusses the segmentation of rural m: 8 =e . “¢ cation tion on Socio-Economic Classificatigets 6-14 | by using hat reflect the > target segment. Demographic Segmentation In demographic segmentation, we divide the market on variables such as age, family size fh cycle, gender, income, occupation, education, religion, race, generation, nationality, ang Sony One reason demographic variables are so popular with marketers is that they're often 4", with consumer needs and wants. Another is that they're easy to measure. Even when weg the target market in nondemographic terms (say, by personality type), we may need the link “sc demographic characteristics in order to estimate the size of the market and the media we shyt oF to reach it efficiently. Here's how marketers have used certain demographic variables to segment markets, AGE AND LIFE-CYCLE STAGE Consumer wants and abilities change with g products, such as toys, books, magazines, digital games, candies, chocolates, biscuits, re and packaged foods, are specifically targeted at children and younger people. Youngsters an Mice in social networking. They consume Maggi noodles, Lay's potato chips, Kurkure, ang : Ach, drinks; passionately play digital games; and browse the Internet very often. The Walt Disp, erat pany's (India) Disney, Jetix, and Hungama channels are targeted at children. Channely% Aastha and Sanskar, on the other hand, focus on a spiritually inclined older audience, and i a like Discovery and National Geographic target people who are interested in education and tainment. Clearasil cream has been positioned as an acne treatment for adolescents, Glucose targeted at youngsters and sports enthusiasts. Many jewelry retailers have introduced Bold j ce i specifically for children. Titan watches re-entered the children’s watch market with the img I. tion of the brand Zoop. \ > Titan Zoop Tian’sfist enty into the cites ] ] watch category in India was through the brand Dash, . geted at children in the age group of 6-14. However, ths | brand was withdrawn because it was felt that the timing was premature as parents were not ready to spend on kids’ accessories at that time. Subsequently, realizing the potential of this St, ment, Titan re-entered the market under a new brand name—Zoop, The design elements of these watches reflect the preferences of the target seg. ment. Watches for giris feature a range of candy colors and summer flowers whereas watches for boys feature nautical colors and sail elements, 1) remain contemporary and to keep pace with new trends, the company launched a limited edition of watches depicting popular characters of Wat Disney Pictures’ Toy Story. The color scheme for the straps and the dis | resonates the vibrant and bold colors of the characters. Each watch has a story to tell, which helps in connecting with the target segment. In order to | create promotional excitement, the company launched a scheme that in- cludes a pack of goofy bands on the purchase of any Zoop watch. These bands can be worn as bracelets, which have become very popular among children. The advertisement campaigns for Zoop were based on the theme that today's children want to own watches that reflect their personality and gain the attention of their peer groups. The “Be a Star” advertisement can: | paign was aired on television channels targeted at children and some ofthe general entertainment channels. The brand is available in a wide range of | retail points, including Titan's exclusive showrooms, large-format shovs, and multibrand shops.* a) | LIFE STAGE People in the same part of the life cycle may ¢ | in their life stage. Life stage defines a person’s major concern, | as getting married, deciding to buy a home, sending a chil school, taking care of older parents, marrying off his or her chileIDENTIFYING MARKET SEGMENTS AND TARGETS | CHAPTER 7 ing for retirement, and planning and so on, These life iii stages present opportunitie ed a ey People cope with their major concerns When 7 ca Ae ee pul a host of products and services such as fur cabo See this tie onesies are needed. Many marketers target age by developii i ee cas and advervemcnas eh 'g¢ by developing appropriate sales promotion, ilatly, there are savi : +. vings-cum- insurance schemes to help young parents to plan for the education of their children. Insurance com- ies offer schemes eae isan ae pa ed vee rene for life after retirement. Many S s products for retired peopl on deposits are higher for “senior citizens” (people above Baa Her ball & iBall Aasaan white most cel phone brands focus on young 8 7$| consumers and introduce products with technology and features important to this target group, one company in India has introduced a handset spe- cifically targeted at senior citizens under the brand name iBall Aasaan (aasaan means “easy” in Hindi). This handset has several features that are important and useful to the target segment. It has a “talking” keyboard with large buttons, and the display screen has bigger fonts. The phone has a bright LED torch with a dedicated button, a special indicator for incoming calls, and alerts for missed calls and low battery charge. One of the important features of this phone is an emergency | ‘erway mi 193 The Perfect gift for your elders! Preset Senior mabe phones by Ba. et tae aad acon ec ci neal ery 98 80S button which, when switched on, automatically dials five numbers, signaling that | Soe ert the caller is in need of urgent attention. The phone has many other standard features, Oe ball Tegel ee and the battery charger functions as a phone stand as well. The features of the phone make it compatible with the needs of senior citizens. © Tot Fie rb 18003004205 \_Oldis Bold GENDER Men and women have different attitudes and behave differently, based partly on genetic makeup and partly on socialization.> Women tend to be more communal-minded and men more self-expressive and goal-directed; women tend to take in more of the data in their immediate envi- ronment and men to focus on the part of the environment that helps them achieve a goal. A research study examining how men and women shop found that men often need to be invited to touch a product, whereas women are likely to pick it up without prompting. Men often like to read product information; women may relate to a product on a more personal level.° Differentiation based on gender has long been applied to product categories such as clothing, hairstyling, cosmetics, fashion accessories, and magazines. Some brands have been positioned as more masculine or feminine. Park Avenue, the brand of readymade apparel from Raymond, is positioned as a masculine brand. Motorcycles are considered to be for men, but many other two- wheeler brands such as Bajaj Wave, Kinetic Flyte, Honda Activa, and TVS Scooty are targeted at women. TVS Motors and Mahindra have launched scooters under the brands Wego and Rodeo, respectively, targeted at not just men, but also women. Van Heusen and Allen Solly, which were primarily men’s clothing brands, have launched a range of apparel for women. On the other hand, Emami, a company that traditionally focused on women, has targeted a new fairness cream, Fair and Handsome, at men, and in the process created a new product category. Men and women vary in their shopping behavior as well. In South Asia, women play an important role in buying food, groceries, and products for daily household use. A study indicates that in some parts of India, women seldom shop and when they do, they buy goods mostly for the family. This study suggests that about 48 percent of women buy products based on what they think is best for the family, and this mode of buying holds for 51 percent of women for hair-wash products, 52 percent for freshening/deodorizing products like talcum, powder, 55 percent for personal wash products like toilet soap, and 60 percent for products like toothpaste or tooth powder.” Q's got power. MOBILE PHONES sew Benes 200 BBall Aasaan, targeted at senior citizens, has features that are compatible with the needs of the segment. Today, many companies are targeting women, and not just men, for their two-wheeler brands. Mahindra Rodeo, for example, uses Kareena Kapoor as its brand ambassador, suggesting the brand’s qualities of power and style. = Ws gat style. She's gotINCOME Segmentation based on income is a long, Standing , i e determi a in a variety of products and services. a determines the opt, consumers to participate in the market exchange and hence ig iy, i a segmentation variable. However, income does not always. py i dig best consumers for a given product. Even if two consumers hyn ity income levels, cach may own different types and brands g¢ i based on a host of factors such as lifestyle, attitudes, and value result of economic growth, many luxury products and high-eng : are making their foray into the Indian market. Wristwatch ya. "ny i: ind as Rolex, Omega, and TAG Heuer are advertised regularly ny As media. Titan has introduced Xylys as a separate brand caterin, NMdi,, higher end of the wristwatch market. At the same time, may oh many consumer products are showing rapid growth due 10 lo price packaging targeted at consumers for whom affordability." criterion of product and brand choice. Detergents, shampoos, : and a host of packaged products are available in small sachets for time consumption in low unit prices. These have become Gite pr Ne in South Asian countries as these help in overcoming income cons Pu and encourage trials. In another extension of what has been lab ans “sachet marketing,” Grameenphone, one of Bangladesh's lea ing 4 phone operators, offers a special economy package to women des i as “phone lads” in small vilags that do not have ned pho These phone ladies share their cell phones with other villagers fy ms taka (the local currency) a call.§ In South Asia, keeping the unit rice 7 through appropriate packaging is one of the Ways t0 reach a large.” of consumers who may not be able to participate in the market exthng 7 he ii care otherwise. : '¢ Increase in income, Markets in South Asia and other emerging markets can develop oy hy wristwatch brands such if the poorer sections of consumers participate in the market exchange and become COnSUne, ’ Heuer are increasing of products and services. However, utilizing the dormant potential of these markets Needs inn. ibility and presence in the vative thinking. The late C. K. Prahalad forcefully argued for the need to engage consumers i arket, the “bottom of the pyramid” (BOP) through market development efforts by companies 5 Prahalad, “If large firms approach this market with the BOP consumers’ interests at heart, it can also lead to significant growth and profits for them.”!° Contrary to popular perception, targeting Poorer consumers does not imply financial sacrifices and subsidies. Using innovative WAYS to cate to the requirements of poorer consumers not only serves a social cause but also generates income An example of an effective implementation of the social objective of serving the needs of the poor without compromising on financial viability is the case of Aravind Eye Care System, a group of institutions offering world-class eye care to poor people in rural and urban India,!! SOCIO-ECONOMIC CLASSIFICATION The complexity of the Indian market due toahos of factors has reduced the validity of any single segmentation variable as a good predictor of consumption preferences and habits. This has prompted the development of an index called Soci. Economic Classification (SEC) to classify urban households in India. This classification is based on a combination of two factors—the education level and the occupation of the head of the household Classification based on these two dimensions is presented in @ Table 7.2. SEC A and SEC Breferto higher consumption groups constituting about a quarter of the urban households, and SEC C forms another 21 percent. SEC D and SEC E constitute the remaining households. This classification is conceptually similar to the SEC classification of rural markets discussed in “Marketing Insight Segmenting Rural Markets.” The Socio-Economic Classification of rural and urban households described in Tables 7.2 am 7.3 was developed under the initiative of the Market Research Society of India (MRSI) in the mid 1980s. While this classification has served the purpose for which it was developed, there h some rethinking about modifying this classification scheme to reflect the social and ec changes in the country. In addition, the need to follow a unified classification scheme for rural markets has also been felt by marketing practitioners, Considering these requireme! Research Users’ Council (MRUC) and the Market Research Society of India (MRSI) <0IDEN: TIFYING MARKET SEGMENTS AND TARGETS CHAPTER 7195 ABLE 72 @ pccupation Education j Mliterate | Less than 4 y, \ ; fears 5-9 Year in Scho rs | School Some College skilled £2 = ol of Schoo! Certificate Education STaduate | Postgraduate unskilled F2 2 D c c B2 | ‘shop owner D D a o D o D petty Trader £2 7 c 82 B2 n2 re Employer of: o c c Ba | B2 ver 10 persons | BI ai Less than 10 persons c 8 AZ A2 A A A | None D c B2 8 a2 A | A clerk D a Ee Bl ee me supervisor D 5 D cy sp | lB | professional | 5 ec c B2 Bi | A2 ‘senior Executive BI a | 5 je 82 81 | a2 | Al \ Junior Executive (| o a 7 lee 2 =| a : M \ ‘source: Media Research Users’ Council Marketing Insight mM Segmenting Rural Markets Rural markets in South Asia are heterogeneous in terms of their literacy levels; income; spending power; availability of electricity, telephone net- works, roads, and other infrastructure; and social and cultural orienta- tions of people. These differences influence the market potential and buying patterns and habits of consumers. Approximately 25 percent to 30 percent of people in South ‘Asian countries live in rural areas. The size, potential, and current penetration levels of different products pro- vide strong reasons for companies to adopt a marketing strategy crafted specifically for rural markets. One of the useful segmentation schemes for rural areas used in India is Socio-Economic Classification (SEC), which uses a combina- ton of two variables—the education of the chief wage earner and the type of house they live in. This scheme, which is a modified version of the segmentation scheme for urban areas, classifies consumers into four classes_-R1, R2, R3, and R4. The combination of the two vari- ables and the Socio-Economic Classification applicable is presented in @ Table 7.3. A description of these SEC groups as discussed by Pradeep Kashyap is presented here." ‘SEC RI Farmers who are landlords, those who are educated and have exposure to the urban environment, and children studying in nearby towns exhibit a lifestyle closer to ‘that of urban areas, adopt modern technology, and own consumer durable products such as trac- tors, refrigerators, and two-wheelers. ‘Such people comprise SEC R1. SEC R2 This group includes rich farmers with about 5 acres of land, who may not be educated but want their children to be educated. They aspire to have a high social status and own some consumer dura- bles such as TVs, tractors, and two-wheelers. SEC R3 This group has landholdings ‘of between 2 acres and 5 acres, and children studying in village schools. They are conservative in technology adoption and own some consumer durable products. SEC R4 This group is engaged in agricultural labor, has low income, and uses subsidized food grains and other products distributed through the public distribution system. Availability of marketing infrastructure and the efforts needed to develop these in rural areas are issues facing marketers. Haats (periodic village markets) and mandis (agricultural markets set up by government agencies to facilitate the exchange of agricultural pro- duce) serve important roles in the exchange of goods and services in tural areas. Many companies have profited from adapting products anc packages to suit rural consumers. Shampoos, detergents, and man other fast-moving consumer products are available in small pack size to induce trial and to suit the purchasing power of rural consumet (continueTABLE 7.3 Education of Chiet Wage Earner Pucca Professional degree RI Graduation/PG Rt College R1 SSC/HSC R2 Class 4—Class 9 R3 Up to Class 4 R3 Self-learning R3 Iliterate Ra ‘Source: Media Research Users’ Council (MRUC) -G, Videocon, Samsung, and other Companies marketing consumer lurable products have developed specific models for Catering to rural larkets. The success of marketing efforts in rural areas depends on © marketer's ability to prioritize ‘ural markets, develop products at propriate price points and distribution infrastructure, and communi- fe with rural audiences, ie teh 4 are emerging as tkets for many services, ication of Rural Consumers Type of House Semi-pucca Kuchcha R2 R3 R2 R3 R2 R3 R3 R3 R3 R4 R3 R4 Ra Ra R4 R4 Currently, although the Socio-Economic Classification markets presented in Table 7.3 is still Prevalent, there, a thought and research for developing a unified Classiticatign ni urban and rural markets. Therefore, the existing Classitictign a Undergo some modifications in due course after Necessary tsp validation studies that are underway, Nn and suggested modifications to the Classification ‘ by substituting one of the two dimensions, ng occupation of the chief wage earner, with Access Possession of specific assets by the household, This, fication is under testing and validation for Stabil robustness. Therefore, although there has been ; nouncement about the modified SEC Classificatig same has not been Officially adopted as the sub; scheme as of now, GENERATION Each generation or cohort js foundly influenced by the times in which it grows the music, movies, politics, and defining events Period. The Younger generation plays a significan not only as consumers but also as initiators and encers of buying decisions, As one author points,“ is an amalgamation of two behaviorally distinct g consisting of 13-18-year old teenagers and the 19- Broup, called young adults,”!3 There are also indications that young people aged between 4 play a major role in the buying decisions of families in urban areas." This study indicates that 63 percent of children are involved in purchase decisions fo T a wide range of product ce such as computers, bicycles, clothes, television Sets, and automobiles, Their influence ra” * about 76 percent in the buying decisions of cell Phone handsets to 43 Percent in the ca do. Brand names have emerged as an important Consideration for children, Most chi! the needed information from television, followed by print media and outdoor media mation provided by this study points toward the role of “consultants” that children pl buying decisions, They forma major target audience for marketers’ communication ¢!!IDENTIFYING MARKET SEGMENTS AND TARGETS \ CHAPTER 7 197 Social Networks as Facebook and Or and preferences, Oy ena oon On the basis of their expressed opinions, concerns, social media such as Orkut Fubeaictiog themes and issues that dominate conversations in understanding of the nists of dit ; Twitter, and YouTube, companies can develop a deeper decisions in the areas of Merent customer groups. This helps in making important keting O° apt Of Product modification and improvement, communication strategies, and pricing, and in a at other marketing mix elements based on customer needs. Using data mining yoaches appropt ae ae data, companies can even micro-target specific customers with customized nication. Many hotels and travel Portals, for example, are increasingly using social networks to identity yopriate clients. They publicize new activities and deals for these customers and engage in dialogues with them. Luxury hotels employ Social media managers to carry out this process with select groups of customers. jwitte’s new advertising platform, Promoted Tweets, is tied to Searches within Twitter and allows advertisers to place tweets relevant fo Customers. Users can respond to the tweet by relying of re-tweeting, Psychographic Segmentation psychographics is the science of using psychology and demographics to better understand con- sumers. In psychographic segmentation, buyers are divided into different groups on the basis of psychological/personality traits, lifestyl 8 le, or values. People within th d hi can exhibit very different psychographic profiles, Se Today's marketers actively use social networking sites such One of the most popular commercially available classification systems based on psychographic measurements is Strategic Business Insight’s (SBI) VALS™ framework. VALS, signifying values and lifestyles, classifies U.S. adults into eight primary groups based on responses to a questionnaire featuring 4 demographic and 35 attitudinal questions. The VALS system is continually updated with new data from more than 80,000 surveys per year (see AX Figure 7.1). You can find out which VALS type you are by going to the SBI Web site.!> The main dimensions of the VALS segmentation framework are consumer motivation (the horizontal dimension) and consumer resources (the vertical dimension). Consumers are inspired by one of three primary motivations: ideals, achievement, and self-expression. Those primarily motivated by ideals are guided by knowledge and principles. Those motivated by achievement look VALS™ Framework NCOs) Man) ETE Seay Fig. 71 A The VALS Segmentation System An Eight-Part Typology Source: VALS © Sv & Wnsights strategic OMIVALS.PART 3 rs, Consumers whose motiyay: ci ir pee ej - iccess tO their pes : 7 ices that demonstrate $4 variety, and risk. Personality traits such as ny ic ical activity, V4" novativeness impulsiveness, leadershj,, individual’s resources, Dif seeking, 0 : ism, novelty $7" etermine an In s . Differ e demogrr expression of his or her primary motivatgg ? le with high self. Th -ricated, active “take-charge” POPS © Cte, ticated, acV® 5 fie eh cessful, Baan tastes [OF relatively upscale niche-oriented Products ted by ideals and who value a and value in products” nd family. They fy, np motiva functionality, n career al ases of tive people durability, le who focus ©! to their peers- . : variety and excitement, 7}, S Je who seek : hion, entertainment, and Socializing ae reflect i ure, d, an Thinker ility. They seek successful, goal-oriented peop at demonstrate success Isive peop! enthusiastic, imp income on fas! jencers— Young, y ortion of paratively high prop hn lower resources are: nservative, conventional, and tradi dy and fun-loving people who are ulate the purchases of those with g down-to-earth, self-sufficient peo! passive people concerned about change ant hic segmentation schemes are often customized by culture. The Japanese version of s™, divides society into 10 consumer segments on the basis of two key concep; occupations, innovation, and self-expression) and attitudes VALS, Japan VAL life orientation (traditional ways, ‘ > pragmatic, adapting, and innovating). , on the values, attitudes, and lifestyles of custom. social change (sustaining, Religion can also have a significant influence t ers and, as a consequence, in shaping the product and brand choices of consumers. The norms that people follow with respect to food habits or dress codes are some examples of this influence, A significant number of consumers in India are strictly vegetarian. And among those who do taurants and food manufactur. ents. For instance, eat nonvegetarian food, many avoid beef. As a result, many res ers in India have had to create specific products for different customer segm nsumer preferences. In India, beefs duced vegetarian burgers such McDonald’s had to change their menu in India to adapt to col cts for customers who prefer spend a com e with concrete beliefs. constrained. They favor styl reater material wealth. ple who like to work with their hands, d loyal to their favorite brand, The four groups wit ; tional peop! Believers—Co! rce~ 2, Strivers—Tren resou' products that em 3, Makers—Practical, Survivors—Elderly, Psychograp! avoided in the menu of McDonald’s. Instead, the company has intro as the McVeggie burger and the McAloo Tikki burger and other produ vegetarian food. Another example of market segmentation on the basis of customers’ religious ts in the Indian subcontinent. Halal meat is beliefs can be seen in the marketing of meat produ ling to Islamic law. Meat imported to countries like Pakistan meat that is seen as permissible accord and Bangladesh from other countries has to be certified as Halal by approved Islamic organizz- tions. Many restaurants and hotels in South Asia serve both Halal and Jhatka (meat prescribed for Muslim and non-Muslim guests, respectively. among Hindus and Sikhs) dishes Marketers can apply their understanding of VALS segments to marketing planning. The market India, ee provides an illustration of segmentation based on lifestyle parameters. In oe : ape i — range of sub-brands within their Titan range—Edge, Regalia, Nebula, anal ee : tee lifferent ee segments. Some of these models are ornate watches with gold- ca ie a gore with leather straps, each appealing to different lifestyle segments. The eee cessories under the brand name Fastrack appeals to the youthful segin=t" aie eee arate i F aceite at people who want to own a good-looking watch at an aft-rd- leather accessories such as ae See a aortas Be : who value “style and elegance in a classical cad acccatie es oadeepemiere ; 10 want to make a personal state’ ™ about themselves and the evolved nature of their preference. Behavioral Segmentation In behavioral segmentation, h , marketers divide b i Of, attitude toward, use of, or response eee i iiobi TIFYING MARKET SEGMENTS AND TARGETS 5 AND BENEFITS Nn. NEED* ; lot ever; ¢ benefits from it. Needs-based Oe bamane buys a product has the sa «er it identifies distinct market segmeme sjessed Seementation is Dee ar te ple, may offer various benefits, such ne bens eceae marketing impli widely used approach as basic cleaning, eaaiinoaae hee e Feeiate for > g shine and bounce, dan- products rgeedny oy 7 Clinic, Chic, Pantene, Head & et . it of “ iverse benefit segmer In th ji ” In the fabric- gments. In the bathing mirection.” In the fabric-wash market, consu le Dettol soap offers the benefit of “total othes prefer mid es so the liquid acca seeking the benefit of protection of delicate «able for woolen cloth F etergent bi s ei Fe ere dA tr ue atop Lond ri : _ " ties of di surf Excel Matic Top Load for use in washing machines. Since be: Stergent powders that generate less Tather andere ae nefits th: category Vary @ need-based segmentation is Teal fis ae seek in the same product or service aircloping relevant value propositions for ca ee Seren ae sho! egory, Liril 'e ben es shi ‘A , offers th 7 : benefit freshness” while ECISION ROLES People play fi ‘ ; gi eer Recognition ofthe Met roles in a buying decision: Initiator, Influence, Decider, Buyer, vuying roles and identification of those who play these te agiven product or service are vital for effective marketi a cation strategy. In : ting, This is especially useful while designii commun! gy: In pharmaceutical products, for exile, oe oct oe ds of medicines, pharmaceutical ies i eel information about p eto influence doctors’ prescription behavior by providing we Eales, or Wak site inforiGon. Wi periodical visits by medical representatives, conferences, aor end initiating the purch . Women play a significant role in deciding on brands of kitchen app oe ce g the purchase of many household products. Therefore, many advertisements and promotion: efforts for such products are directed at homemakers. The aL tafisence ee media ee ate presentations by salespeople, suggestions by shopkeepers, and comncide = by o pee 2S aera! vary depending onthe ate and type of products. This is ! i where the perceived risk of buying is hi il i marketing plans and communication strategies, dapasies need to ee Sm pas in the consumption system and the means and modalities of reaching out to them. USER: AND USAGE—REAL USER AND USAGE-RELATEDVARIABLES Many marketers believe variables related to various aspects of users or their usage—occasions, user status, usage rate, buyer-readiness stage, and loyalty status—are good starting points for constructing market segments. Occasions Occasions mark a time of day, week, month, year, or other well-defined temporal aspects ofa consumer's life. We can distinguish buyers according to the occasions when they develop aneed, purchase a product, or use a product. For example, air travel is triggered by occasions related to business, vacation, or family. Greeting cards are designed for different festival seasons and special occasions that trigger their buying, such as Christmas, New Year, birthdays, weddings, anniversaries, Teachers’ Day, Valentine’s Day, the birth of a child, and so on. Many durable products such as two-wheelers, cars, television sets, refrigerators, and other white goods are heavily advertised and promoted during festive occasions. Chocolates, sweets, and dry fruits are specifically packed for festivals like Holi and Diwali. Occasion segmentation can help expand product usage. User Status Every product has its nonusers, ex-users, potential users, first-time users, and regu- lar users, Blood banks cannot rely only on regular donors to supply blood; they must also recruit new first-time donors and contact ex-donors, each with a different marketing strategy. The key to attracting potential users, or even possibly nonusers, is understanding the reasons they are not ledge of the prod- using. Do they have deeply held attitudes, beliefs, or behaviors or just lack knowl uct or brand benefits and usage? / ‘ oe Included in the potential-user grouP are consumers who will become users in connection with some life stage or life event. Mothers-to-be are potential users who will turn into sae pat Producers of infant products and services learn their names and shower them with products an ads to capture a share of their future purchases. Market-share leaders tend to focus on attracting Potential users because they have the most to gain. Smaller firms focus on trying to attract current Users away from the market leader. F i duct users. Heavy users «nto light, medium, and heavy product ae ane — e reentage of total consumption. Cellular phone ate often a small slice but account for a high pe’ CHAPTER 7 199roviders calculate NE significanly higher proportion ee nod ol re re bea ol a er loy. prand and are always look and consumption. f the product, some are aware, 5, some intend to buy. To help y have converted people fr, Om how ¥ to break down the market into dig, ware OF oduct, an Readiness Stage some people are Une some desire the pr informed, some are interested, terize how many people ae st different stages 2” a marketing, funnel stage (0 another, eters can employ buyer-readiness stages. different stages ™ The proportions ol program. In the case of to educate, inform, and persuade consumers 50 € International's marketing effort is one such example. nce in designing the mar} familiar with, markete ni pting the new offer. | + Lifer, ake a big differe sumers are n0t hat they start acce| al pioneered umbilical cord stem cell banking (. tion and cryogenic storage of umbilical corg Is called cord stem cells. Th ic disorders and life-thre Lif ‘eCe I] Litecell Internation in India. The procedure requires collec which is a rich source of unspecialized and immature ce cells can be used at later stages in life to treat some gene! diseases through genetic engineering. This method serves as bio-insurance for child get the cord stem cells, blood is collected in mbilical cord right after a baby’s xa bags from the u! Accredited TO Sed The stem cells are then separated for long-terr oka wig = age atan extremely low temperature of -190° Clients pay for the collection and long-term stor cot ett of cord blood cells. The company has invested forts in creating awareness among Th : nificant . o Z you LifeCell medical fraternity and among expectant mothe; ; my childs health forever. through a variety of methods such as ahead [ seminars, workshops, presentation ioe you = —s = promotional literature, and ses earl Leal galalsl syn and concept is still in the nascent stage in Sout As: 7 and people are gradually becoming aware of ; mma term benefits."° & 7 A Fi Fi —————_ hypothetical b 7.2 displays a funnel for two users to more re Brand A se brands. Compared to Brand B ecent users performs . Brand B). Depending on pe 46 percent convert for Brand ee ee introduce more oe oid consumers didn’t use again. pain to 61 percent for beliefs consumers hold. cts, find more accessible retail outlets ee campaign sl : , or dispel rumors or incorrect uses celebrity endorse introduce umbilical cord banking in India. Loyalty Statu. iS Mi arketers usually envision four groups based on bi on brand loyalty status: 1. Hard-core | loyals—C 5 gill Cee who bu ry only 3. Shifting eee who are loyal to sale some all the time ae ee ha brands rs who show no lo ne brand to yalty to any brand!” another A compan 3 y can lear help identify ma great deal b ‘ P| the products’ y analyzing de; seth with its own; ra baie split loyals can ee loyalty: Hard-core lo) out its marketing weakned looking at customers droppi e firm which brands are m0: ses and attempt to aoe its brand, the company <2 em. One cautio : in: What appe#(OENTIF 'VING MARKET SEGMENTS AND TARGETS | CHAPTER? — 201 wood Aware Ever Tried Recent Trial = Regular User Most Often Used grand 8 ge 72| ae ‘Aware Ever Tried : Recent Tat seasonal Regular User Most Often Example of Marketing F u Funnel d-loyal purchase patterns may reflect habit, indi _ Se ir oro Cae abit, indifference, a low price, a high switching cost, arritude Five consumer attitudes about products il -tO~ ii as and haste: Dorr, sipeeubatginaea _ Political campaign use attitude to determine how much rime hes renee ey thank enthusiastic voters and remind them to vote, reinforce hose who are Posity af posed, try to win the votes of indifferent voters, and spend no time try- ng to change the attitudes of negative and hostile voters. are enthusiastic, positive, indifferent, negative, ultiple Bases Combining different behavioral bases can provide a more comprehensive and shesive view of a market and its segments. AS Figure 7.3 depicts one possible way to break down target market by various behavioral segmentation bases. \Fig. 7.3, & Behavioral Segmentation Fe Breakdown Not tried iceCHOOSING VALUE me variables We use in consy, . Markets pame of tH ges marketers ls use gh / | : : 1 «egg markets . usage Fate b ic variables are the most imp ota nt busin ht, am ographi «tics of the buyer. fo We can segme! hy, bent fits oU8 se, The dem! i Ne erst neta . orn eh i one set of La Je person’ marketers show II tires t on 8 -2 (287) to size 4 (44°). This pioneering e, starting major garment and apparel retail brands in raged all the or ssid clothing. Pantaloon has launched specialized fereris nee errr dedicated designers under the brand name aLL, and Westsig 50 under the brand name GA. @ 4 What does an attractive niche look like? Customers have a ¢i cen Fate br nomen ni we ps set of needs; they will pay a premium to the firm that best sa ee them the niche is fairly small but has size, profit, and growthu women’s apparel—successfully and is unlikely to attract many competitors; and the niche gains certain economies through sp focuses on the niche segment of zation, As marketing efficiency increases, niches that were seemingly too small may become plus-sized clothes. profitable.22 See “Marketing Insight: Chasing the Long Tail.” In most markets, the distribution of product sales c curve weighted heavily to one side—the “head”—wher: sales are generated by a few products. The curve falls : Zero and hovers just above it far along the X-axis—the where the vast majority of products generate very little se market traditionally focused on generating “hit” produc: 7 ae the low-revenue market niches com hei ee “80-20” rule—that 80 per hasing the Long Tail cee And rson asserts that as a result of consumers’ en’ sentences een est ta zed by Amazon.com, eBay, iTunes, and Netti, has led to a shift in lernet as a shoppin i ta tora cry enn ME be Bn le at, en 3 fred magazine and author of The Long Tail. ct ‘ : hits to ois Ha to a shifting of demand “cow! Number of product categories !"¢' IDENTIFYING MARKET SEGMENTS AND TARGETS | CHAPTER T clothing, and movies. According to this view, the rule that / now 19 Products adding up eel is more like “50-50,” with smaller-seltin eal firm's revenue. of distribution make it economically easi E ier i .e predictions of demand; (2) The more siisias ona ae sale, pre the likelihood oft reater the Of tapping into latent dem, i reachable through traditional retail channels; 8) 7 faint ate tes are a a big new market can result. fener Anderson identifies two aspects of Internet shoppii on iden loppin these premises. First, the increased inventory itd Yee tat online permit greater choice. Second, the search costs for relent new products are lowered due to the wealth of information onlin te fitering of product recommendations based on user preference 4 that vendors can provide, and the word-of-mouth network of itemet users. some critics challenge the notion that old busi i iness paradigms have changed as much as Anderson Suggests. Especially in ener ment, they Say, the “head” where hits are concentrated is valuable ‘Anderson's ong tail theory is based on three premises: (YL 7 ower 207 also to consumers, not only to the content creators. One critique argued that “most hits are popular because they are of high quality,” and another noted that the majority of products and services making up the long tail originate from a small concentration of online “long-tail aggregators.” Although some academic research supports the long tail theory, other research is more challenging, finding that poor recommendation systems render many very low-share products in the tail so obscure and hard to find they disappear before they can be purchased frequently enough to justify their existence. For companies selling physical prod- ucts, inventory, stocking, and handling costs can outweigh any financial benefits of such products. Sources: Chris Anderson, The Long Tail (New York: Hyperion, 2006); "Reading the Tail” interview with Chris Anderson, Wired. July 8, 2006, p. 30; "Wag the Dog: What the Long Tail Will Do," The Economist, July 8, 2006, p. 77; Erik Bryniolisson, Yu ‘Ueffrey” Hu, and Michael D. Smith, “From Niches to Riches: ‘Anatomy of a Long Tail,’ MIT Sloan Management Review (Summer 2008), 67; John Cassidy, “Going Long," New Yorker, July 10, 2006; www.longtall com: "Rethinking the Long Tail Theory: How to Define ‘Hits’ and ‘Niches, "" ‘Knowledge@Wharton, September 16, 2009. INDIVIDUAL MARKETING The ultimate level of segmentation leads to “segments of one, : “customized marketing,” or “one-to-one marketing.” Today, customers are taking more individual initiative in determining what and how to buy. They log onto the Internet; look up information and evaluations of product or service offerings; conduct dialogue with suppliers, users, and product critics; and in many cases design the product they want. Jerry Wind and Arvind Rangaswamy see a movement toward “customerizing” the firm.” Customerization combines operationally driven mass customization wil hat empowers consumers to design the product and servi longer requires prior information about the customer, nor does it need to Jatform and tools and “rents” to customers the means to merized when it is able to respond to individual and messages on a one-to-one basis. 26 Tt may be very difficult to implement for the cost of goods by more than the customer til they see actual products, but tk on it. The product may be customization has worked well for some keting in a way t] hoice. The firm no wn manufacturing. It provides a p esign their own products. A company is custo: stomers by customizing its products, services, Customization is certainly not for every company. mplex products such as automobiles. It can also raise willing to pay. Some customers don’t know what they want un! xy also cannot cancel the order after the d to repair and have little sales value. In spite of this, ducts. 4ICAL CHOICE OF MARKET TAR' er backlash. Some consumers resist being recause they don’t want to be remin( age may not appreciate products that label them “old.” farket targeting also can generate public cont of vulnerable groups (such as children) or disa ote potentially harmful products.”” Critics worry gh the mouths of lovable animated characters will ove! to want sugared cereals or poorly balanced breakfasts. zed. other area of concern is the millions of kids under imped online with them, offering freebies in exchang inder fire for this practice and for not clearly differenti shing ethical and legal boundaries in marketing e company has started to wo! ded they are eating alone. Elderly consumers roversy when ma 4 ith customized mar- ce offering of their 25 GETS Marketers must target carefully to avoid con- labeled. Singles may reject single-serve food packag- who don’t feel rkélers take unfair advan- dvantaged groups (such as poor people) or that high-powered appeals presented rwhelm children’s defenses and lead Toy marketers have been similarly the age of 17 who are online. Marketers ge for personal information. Many have iating ads from games or entertainment. children online and offline continues