Identifying Market Segments and Targets

Marketing Management
A South Asian Perspective, 13th ed

Effective Targeting Requires…
• Identify and profile distinct groups of buyers who differ in their needs and preferences • Select one or more market segments to enter • Establish and communicate the distinctive benefits of the market offering
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

Ltd. .What is a Market Segment? A market segment consists of a group of customers who share a similar set of needs and wants Copyright © 2009 Dorling Kindersley (India) Pvt.

Ltd.Why Segment the Market? • Facilitates right choice of target market • Facilitates effective tapping of the chosen market • Makes the marketing effort more efficient & economic • Helps identify less satisfied segments & concentrate on them Copyright © 2009 Dorling Kindersley (India) Pvt. .

.The Himalaya Drug Company serves a growing niche market by focusing on ayurvedic medicines and health supplements Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

What is Customerization? Customerization combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product and service offering of their choice. Ltd. Copyright © 2009 Dorling Kindersley (India) Pvt. .

the product has different formulations in order to cater to varying consumer segments and serve different consumer needs. Copyright © 2009 Dorling Kindersley (India) Pvt. In different countries.Horlicks is sold in a number of countries across world. . Ltd.

Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral Copyright © 2009 Dorling Kindersley (India) Pvt. . Ltd.

Ltd. .Demographic Segmentation Age and Life Cycle Life Stage Gender Income Generation Social Class Copyright © 2009 Dorling Kindersley (India) Pvt.

Dove Targets Women Copyright © 2009 Dorling Kindersley (India) Pvt. . Ltd.

It launched its all women store at Eva Mall at Bangalore. While globally. . it brings less than 15% in India. a mall exclusively targeting the woman customer. Revenue from women segment. So. Ltd.Adidas Targets Women in India • German shoemaker Adidas is trying to develop the women segment in India for its products. Copyright © 2009 Dorling Kindersley (India) Pvt. it plans to increase the number of women focused stores. Adidas derives about 35% of its euro 6. One strategy to draw more women customers into its stores is to expand the list of merchandise. The company is now planning to have as many as 68 items of women’s footwear.4 bn.

. Ltd.Behavioral Segmentation Decision Roles • Initiator • Influencer • Decider • Buyer • User Behavioral Variables • Occasions • Benefits • User Status • Usage Rate • Buyer-Readiness • Loyalty Status • Attitude Copyright © 2009 Dorling Kindersley (India) Pvt.

Ltd.Usage Based Segmentation • Currently user of the brand • Currently user of competitors’ brand • Currently non – users of the category as such Copyright © 2009 Dorling Kindersley (India) Pvt. .

. Ltd.Contd… • Start with current users of the brand • Tackle current users of competitors’ brands • Tackle non – users. entering the category for the first time Copyright © 2009 Dorling Kindersley (India) Pvt.

Mother Dairy has done the same thing with their low calorie ice cream Copyright © 2009 Dorling Kindersley (India) Pvt. .Benefit segmentation • GSK Consumer Healthcare & Pepsi have created separate segments with their Diet Horlicks & Diet Pepsi. Ltd.

Segmentation with Value orientation  Irrespective of the method applies. . such differences in motivations/ value needs lie within a segment can’t be uncovered Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. marketer has to make the search in terms of the value needs of the buyers  All of them may be buyers for the product. but may differ in their motivations & the value sought in buying it  Marketer has to fully uncover the value needs. If he stops with conventional segmentation.

given the diverging value needs of the segment. . Ltd. But.Example  Suppose you are targeting the market of holiday lovers. All of them are holiday lovers & you have selected the segment applying a combination of relevant segmentation variables. Copyright © 2009 Dorling Kindersley (India) Pvt. You work out a travel package addressed to them. some others are relishing group activities. and have chosen a broad segment applying the conventional segmentation methods. and some more are concerned at the travel comforts. But you find your purpose is not fully served. You have to go deeper & capture the value difference in the segment. you find some of them looking for privacy. some are interested in exotic settings.

.Loyalty Status Hard-core Split loyals Shifting loyals Switchers Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

Ltd.Effective Segmentation Criteria Measurable Substantial Accessible Differentiable Actionable Copyright © 2009 Dorling Kindersley (India) Pvt. .

. or a few or all of the segment • With segmentation the firm just divided the market into segments to be examined further • All these segments need not necessarily form its target market • A selection/ decision is thus involved after the segmentation process Copyright © 2009 Dorling Kindersley (India) Pvt.Choosing the Target Market • The marketer can choose one. Ltd.

It feels that it doesn’t make economic sense to lay copper fibre across the length & breadth of any city. It selects only those segments/ parts of the selected cities where the costs would be low & profits would be high. Ltd. Copyright © 2009 Dorling Kindersley (India) Pvt. .Airtel’s Target Market for Broadband services • Airtel does not select all segments/ cities as its market for its broadband/ fixed line services. Airtel’s broadband services are available in the top 50 cities only. It is highly choosy about the areas it pick up. and even in those cities it does not select all parts of the city as its operating market.

.Steps involved in choosing the Target Market • Look at each segment as a distinct marketing opportunity • Evaluate the worth of each segment • Evaluate whether the segment meets all the attributes of effective segment • Examine whether it is better to pick up the whole market or only a few segments • Look at segments which are relatively less satisfied by the current offers Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

Contd… • Check out if the firm has the differential advantage capability for serving the selected segments • Evaluate the firm’s resources • Examine. . select those segments that are most appropriate for the firm as the target market Copyright © 2009 Dorling Kindersley (India) Pvt. whether the spotted segments match with & make the best fit for the firm’s distinctive capabilities • Finally. Ltd.

Ltd. resources & capabilities Copyright © 2009 Dorling Kindersley (India) Pvt. .Evaluating the Segments • • • • • Is it sizeable Is it growing Is it profitable Is it accessible Is it compatible with the firm’s ambitions.

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