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SEGMENTATION AND TARGETING

Mass Marketing

Segments Marketing Niches Marketing


Local areas Marketing Individuals Marketing

Mass Marketing
In mass marketing, the seller engages in the mass production, mass distribution and mass promotion of one product for all buyers. e.g. Coca-cola of 300ml for all OR Model- T Ford in black color

Segments
It consist of a group of customers who share a similar set of wants e.g. low cost basic transportation vs. Luxurious driving experience The marketer does not create the segments, but identify and target

Niches
It is more narrowly defined group seeking a distinctive mix of benefits. Marketer usually divide segment as sub-segment. Segments are normally large while the niches have distinct set of needs e.g. segment of heavy smokers include 2 niches those who dont care and wants to quit. e.g. Hallmark Greeting cards in Tamil, Marathi and Telagu

Local areas
Target marketing is leading to marketing programs tailored to the needs and wants of local customer group s trading areas, neighborhoods, even individual stores e.g. Seedless rare Black dates for high profile Muslims during Ramzan in local Market. e.g. McDonald as per the local taste, more local taste, sarso oil in North, coconut oil in South

Individuals

The ultimate level of segmentation leads to segments of one, customized marketing or one to one marketing e.g. Mass customization It is ability of a company to prepare on amass basis individually designed products, services, programs and communication to meet each customers requireme

Mattel Barbie
Hair color/Skin tone Hairdo, clothes, Accessories And NAME

Levis Jeans
Size/Color/ Fade Stitches , buttons, Style /Accessories

Paris Miki
Goggles /Glasses Number /Frame Glass color, Style, And Accessories

DeBeers
Engagement Rings Size/Color/ Gold/ platinum/ Diamond Pattern , Style and Accessories

Taste and Servicescape in Different Places

Beijing

Bologna

Salen, Sweden

Moscow

Paris

Tokyo

Transaction Marketing
Focus on single sale Focus on Profitable transaction

Relationship Marketing
Focus on Customer retention Focus on CLTV

Short timescale
No emphasis on customer Moderate customer contact Brand Building thro advertising Focus on Customer acquisition No CSM Over promise, under delivered Focus on Shareholder

Long timescale
High Customer service emphasis High customer contact Brand Building thro Marketing Focus on Customer retention Measure CS and retention rate Under promise, over delivered Focus on Stakeholder

Marketing Segmentation Requirement for effective Segmentation


Measurable
The degree to which the size and purchasing power of the segment can be measured

Accessible
The degree to which the segments can be reached & served

Substantial
The degree to which segments are large or profitable enough

Differentiable
The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs.

Actionable
The degree to which effective programs can be designed for attracting and serving of the segments

Marketing Segmentation Bases for Segmenting


Geographic Segmentation
Dividing the Market into different geographic units one of the basic forms of Segmentation

Demographic Segmentation
Most popular ways of distinguishing customers. They are easier to measure

Psychographic Segmentation
The degree to which segments are large or profitable enough

Behavioral Segmentation
The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs.

Pattern of market Segmentation in Services


Price versus Service Quality
P R I C E

Homogenous preferences All the customers have roughly same preferences


SERVICE QUALITY

P R I C E

Diffused preferences Extreme preferences should have some what in Between or in centre, hoping to appeal all
SERVICE QUALITY

P R I C E

Clustered preferences (3 options) 1. Position in between or in centre (Natural Market) 2. Position in Largest group ( Concentrate Marketing) 3. Develop several brand each positioned in different segment.
SERVICE QUALITY

Market Targeting
Once the company has identified its market- segment opportunities, it has to decide how many and which ones to target In evaluating the segments the Company must look into 2 major factors 1 Segments attractiveness 2 Companies resources and objectives The Company can consider 5 different patterns 1 Single segment concentration 2 Selective specialization 3 Product specialization 4 Market specialization 5 Full Market Coverage

Market Targeting
M1 M2 M3 P1 P2 P3 M1 M2 M3

Single segment concentration


Advantage Segment leadership /High returns Disadvantages If the market turns sour then market share falls Competitors take advantage

P1
P2 P3 M1 M2 M3 P1 P2 P3

Selective specialization
Advantage Multi Segment strategy Disadvantages Since no synergy very difficult to manage

Product specialization
Advantage One product for all markets, easy to handle Disadvantages Diversification becomes problem

Market Targeting
M1 M2 M3 P1 P2 P3 M1 M2 M3

Market specialization
Advantage One market multiple product, easy to handle Disadvantages Diversification becomes problem

P1
P2 P3

Full Market Coverage


Advantage All customer - all product, all markets only large Companies can think of such a strategy Mass Marketing/ Low cost for ads/admin/Mfg/Inventory Disadvantages Huge initial cost, difficult to sustain

Steps in Market segmentation and targeting in services

Positioning Strategy
It is a act of designing the companys offering and image to occupy a Distinctive place in the mind of the target market. It start with the product. A piece of merchandise, a service, a company, an institute or even a person. It is not what you do to a product. But is what you do the mind of the prospect. That is you position the product in the mind of the prospect.
- Ries & Trout

Positioning Strategy
A competitor has 3 Strategies alternatives 1 Strengthen its own current position Avis We are No. 2, we are trying harder 7-Up Uncola 2 Grab the unoccupied position 45% Less Fat, 3 De-position or re- position

Positioning Strategy
Micheal Treacy and Fred Wiersema Proposed a position Framework called Value Disciplines

The some Customers wants that firm which a) Advances on Technology ( Product Leader) other want b) Highly reliable performance( Operational excellence)or c) Few prefer to have High responsiveness in meeting their need ( Customer intimacy)

Positioning Strategy
Micheal Treacy and Fred Wiersema Proposed a position Framework called Value Disciplines

Product Leader

Operational excellence

Customer intimacy

Positioning Strategy
Micheal Treacy and Fred Wiersema Proposed a position Framework called Value Disciplines The Firm cannot be normally be best in all three ways They suggested 4 rules for success

1 Become best at one of the three 2 Achieve adequate performance in other two 3 Keep moving ones superior position, so that not loose to competitor 4 Keep becoming more adequate in other two, so that not loose to competitors

How many Ideas to Promote


Single Concept of USP Double Volvo Ikea

Triple Smith Kline Beecham

Few Images
Name Image Building Image Interior Image Location Image Product Image Brand Image Quality Image Quantity Image Range Image Service Image Behavior Image Price Image Involvement Image CSR Image

Product Differential
Form
Shape, size, color, physical structure, action time, quantity

Features
Oral B -T. Brush, bristles, soft , reaches cavities

Performance
4 levels- Low, high, average and superior

Conformance Durability Reliability Style Design

Services
Ordering ease Delivery Installation Customer training Customer installing Maintenance and repair Miscellaneous

Personnel
Competence Courtesy Credibility Reliability Responsiveness Communication

Channel
Coverage Expertise Performance

Types of Positioning
Attribute positioning Benefit positioning Use of application positioning User positioning Competitor positioning Product category positioning Quality or price positioning

Differentiation
Definition
It is a process of adding a set of meaningful and valued differences to distinguish the companys offering from the competitors offerings

Adding further differentiation


Important- the difference delivers a highly valued benefit to a sufficient number of buyers
Distinction-the difference is delivered in a distinctive way

Superior-the difference is superior to other way of obtaining the benefit


Preemptive-the difference cannot be copied by competitors Affordable-the buyers can afford to pay for the difference Profitable-the company will find it profitable to introduce the difference

Product Life Cycle


Sales

Sales /Volume

Profits

Introduction

Growth

Maturity

Saturation

Time

Types of Product Life Cycle (PLC)

Growth Slump Maturity Pattern

Cycle- Recycle Pattern

Scalloped Pattern

Sales /Volume

Time

Types of Product Life Cycle (PLC)

Style
Sales /Volume

Fashion

Fad

Time

Characteristi Introduction cs Sales Costs Profits Customers Low sales High /Customer Negative Innovators

Growth Rapid rising Ave./Customer Rising Early Adopters Growing No. Maximize Market Share

Maturity Peak Low/Customer High

Decline Declining Low/Customer Declining

Middle majority Laggards Stable & decline Declining Maximize profit share Reduce Expenditure & Milk the brand Phase out weak Cut price

Competitors Few Marketing Objective Product Price Create product, awareness & Trail Offer a basic product Charge Cost Plus

Product extension Diversify Brand Price to penetrate Price to match market competitors

Distribution
Advertising Sales Promotion

Selective
Product awareness to Early Adaptors Use Heavy sales promotion to entice trails

Intensive

More Intensive

Phase out outlets


Reduce to retail Loyalists

Built awareness & Stress Brand Interest in Masses Benefits & Diff.

Reduce, to take Increase to Reduce to minimal advantage , as the encourage level demand goes high Brand switching

THREE PHASES OF MARKETING


NEW PRODUCT - IF SUCCESSFUL OTHERS COPYS
MORE PLAYERS

ALL EARN, ALL GROW


GOLDEN ERA MATURED MARKET DOES NOT LAST LONG

THREE PHASES OF MARKETING


TO SURVIVE AND GROW
TRY TO CAPTURE OTHERS MARKET SHARE

COMPETITION (BUY 1 GET1 FREE)


CUT TROAT COMPETITION WEAKER DIE

ACQUISITION/ MERGER
ALLIANCE SIGNAL

ONLY 4/5 SURVIVE

THREE PHASES OF MARKETING


THE SURVIVORS FOLLOW S.T.P. CATER TO DIFFERENT SEGMENT OF THE MARKET SORT OF PEACEFUL CO-EXISTENCE