M a r ke t Se g m e n t a t ion & Br a n d

Posit ion in g
 Market Segmentation is the process
by which the total heterogeneous
market is sub divided into several
sub-markets or segments
 Each segment is homogeneous in all
major aspects & is different from
the other

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 Bases for Market
Segmentation
 Demographic- Region, States, Districts,
City Size, Density, Climate, Age, Sex,
Family Size, Income, Occupation,
Education, Religion, Social Status
 Psychographic- Life Style, Personality
 Behaviouristic- User Status, Usage
Rate, Benefits Sought, Readiness
Stage
 Brand-related Attitude- Brand
Perceptions, Brand Preferences
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 Requirements of Effective Market
Segmentation
1. The bases for segmentation
2. It is necessary that market segment is
available
3. The market should be segmented such
that the segment is large enough
for the company to have adequate
sales & profits

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 Target Marketing
1.Differentiated
2.Concentrated
3.Undifferentiated

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 Brand Positioning
 It deals with measuring the
perceptions that buyer hold about
alternative offerings.
 Reflects the essence of a brand as
perceived by the target consumer in
relation to other brands.
 Components of positioning-
1. The product class or structure of the
market in which a company s brand
will compete
2. Consumer segmentation
3. Consumer perception of the brand in
relation to the competitors brand
4. Benefit offered by the company’s brand
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 Techniques for perpetual
mapping

1.Image Profile analysis

2.Factor Analysis
3.Cluster Analysis
4.Multidimensional Scaling

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 Image Profile Analysis

5 1
Cleaning Abilit y

Color Prot ect ion

Reasonable Price

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Integration of market
Segmentation & brand
positioning

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 Multivariate Analysis
 It is the analysis of the simultaneous
relationships among three or more
phenomena
 The focus shifts from paired
relationships to the more complex
simultaneous relationships among
phenomena.

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 Multivariate Analysis-
Classification
 Inter-dependence Methods
› Factor Analysis
› Cluster Analysis
› Multidimensional Scaling
› Conjoint Analysis
 Dependence Methods
› Multiple Linear Regression
› Non-Linear Regression
› Discriminant Analysis

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 Factor Analysis
 Objectives-
1. It simplifies the data by reducing a large
number of variables to a set of small
number of variables
2. It analyses the interdependence of
interrelationship among a total set of
variables
 Usefulness-
› Bring out the hidden dimensions relevant
in the relationship among product
preferences. Sometimes, the product
characteristics influencing the
consumer preferences are not clear . In
such cases, factor analysis can be
helpful by revealing more important
characteristics of the product
› To find out certain relationships among
observed values which , though exit,
are obscure. 11
 Applications of Factor Analysis

 Data Reduction
 Structure Identification
 Scaling

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 Example of Factor Analysis
 Coffee-To Identify major factors for
determining consumers evaluation
of a brand of coffee. (14 taste
attributes)

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 Limitation of Factor
Analysis
1.Not strongly supported by
statistical methods
2.The different result can be
obtained by loading factors in
different manners
3.A large number of attributes
required to study factor analysis
4.Sometimes complex factors are
used which respondents find
difficult to understand
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 Cluster Analysis

..
. .
Vacation
Days

..
. .

..
. .

Expenditure on Vacations

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 Matching Measures

Attributes
Object 1 2 3 4 5
A 1 0 0 1 0
B 1 0 1 1 1

SAB = M/N

SAB= Similarity between A&B

M= # of common attributes
N= Total # of attributes

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 Uses of Cluster Analysis
1. Market Segmentation
2. Better understanding of Buying
Behaviour
3. Development of new product
4. To identify homogeneous test market
5.

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 Methods of Cluster
Analysis

1. Hierarchical Method (Unstable &

unreliable)
› Top Down
› Bottom-up
2. Non-hierarchical Method (Reliable
but difficult)
3.

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 Con-Joint Analysis
 It is concerned with the measurement
of the joint effect of two or more
attributes that are important from
view point of the consumer
 Involves three steps-
› Identification of the relevant product
or service attributes-- Direct
interviews, Ascertaining data from
knowledgeable person
› Collection of data- Trade-off approach
or full profile approach (rank)
› Estimation of part-worthy utility
function – statistical method,
computerized
 E.g. Airline 19
Multi dimensional Scaling
(MDS)

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 Test Marketing
 It is a controlled experiment, done
in a limited but carefully selected
part of market place, whose aim
to predict the sales or profit
consequences, either in absolute
or relative terms, of one or more
proposed marketing actions. It is
essentially the use of the
marketplace as a laboratory & of
a direct sales measurement
which differentiates this test
from other types of MR 21
 Uses of Test Marketing
1.Test marketing as a Managerial tool
› Pilot Operation
› Improves mechanics of the
operation
› E.g. storage, handling, stocking
2.Test marketing as a Predictive Research
Tool
› Intro of New Product
› Evaluation of alternative marketing
variables
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 Test Marketing for new product or
brand
 To know expected sales & profits
1.Buying Income method
 Estimate of national sales= (Total
country income/Test area income)x
Test area sales
2.Sales ratio Method
Estimate of national sales= (National
sales of other product/Test area
sales of this other product)x Test
area sales of test product
3.The share-of-market method
Estimate of national sales= (Test
area sales of new brand / Test area
sales of this whole product 23
 Evaluation of alternative marketing
variables

 Tofind whether a new media

pattern is better than the
existing one

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 When to test Market

1. A product with low cost & risk do

not need it
2. Investment in plant
3. Responsiveness of the competitors
4. Considering the impact of test
market failure

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 Guidelines for designing
Market Test
1.Test market should be
representative of whole
2.Time at least one year
3.Market must be carefully controlled
4.Ensure that it will give accurate
result- measurement & methods
5.Advisable to test one variable at a
time
6.Projections made should be realistic
7.Desirable to undertake basic MR

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 Overseas Marketing Research
 Why Export-
› Surplus Capacity
› Home market saturation
› Home market competition
› Improve Quality
› To become multinational
› Tax exemption
› New product development to suite
export

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 Problems of Export Marketing
Research
1.Need to Analyze several markets
rather than one market
2.Reliability of secondary data
3.Collection of primary data
4.If survey need to cover 2-3
countries then it is difficult
compare data
5.Availability of Media
6.Religious & cultural customs vary
from country to country
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 Organizing Export MR

 Own Staff
 Importing Agents
 Domestic marketing research
company
 Service of various research
agencies

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Information Requirement of International
Marketers
 Market Information
 Product Information
 Promotional Information
 Distribution Information
 Price Information
 Environment Information
 General Research Information-
› General- community, business
condition, lifestyle, economic
condition
› Industry Info
› Study related Info
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 Use of secondary data- WTO, World
Bank Periodicals
 Collection of Primary Data (Field
Survey)-
› Product Oriented
› Market Oriented
› Need for personal visit

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 Error in International
Surveys
 Definitional
 Instrument
 Frame Error
 Selection Error
 Non-response error
 Sampling error

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 Advertisement Research
 Need –
› To decide clear objective of
advertisement
› To develop marketing strategy
› Selection of Target audience
› Evaluation of advertising
› It can be instrumental in increasing
the efficiency of ad

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 Media Research
 Main Issues-
› How to choose amongst media types?
› How to decide on a specific insert within
particular media type
 To answer this following type of data is
required-
› Media Vehicle Distribution– e.g. Circulation
› Media Vehicle Audience- # of people
exposed
› Advertising Exposure
› Ad perception
› Ad communication
› Sales Response
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 Media Audiences
 Media Research comprises , inter
alia, the measurement of the size
& break up of individual vehicle
audiences. These can be
discussed under two heads
› Print Media
› Radio & Television
Coincidental Method- Direct
Telephone Calling ( Quick &
Economical)
Roster Recall– personally asked
Diary Method--
The Audimeter
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 Copy Testing
 Theword ‘copy’ is used to denote
an entire advertisement
 Methods of Copy testing
› Before Test Methods
› After Test Methods

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 Before Test Methods
1. Consumer Jury– Rough ads shown to
consumer & asked about
feedbacks
2. Rating Scales- rated on scale value
3. Portfolio tests– Placed in dummy
magazine & recalling will be
asked
4. Psychological tests- Interview &
story telling to respondent
through psychologists
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5. Laboratory testing– Mechanical
device to measure respondent's
psychological response to a
given ad
6. Inquiry tests- same offer, different
ad (copy), different issues
7. Simulated sales tests- two similar
store, two alternative copy
display at POP.
8. Day-after recall tests
9.
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 After Tests Methods
 Recognition Tests– For print media,
respondents are asked about the
ad. Response is measured in
Noted, seen associated & Read
Most
 Recall Tests
 Sales Tests

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 Multidimensional Scaling
 It is the class of procedure for
representing perceptions &
preferences of respondents by
means of visual display.
 Uses-
› The number & nature of dimensions
consumers use to perceive different
brands in the market place
› The position of current brands on
these dimensions
› The position of consumers’ ideal
brand on these dimensions
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Approaches to Multidimensional
Scaling
 Attribute Based
 Non-attribute Based

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 Non-attribute Based

Preferred To
Preferred Surf Sunlight Gnat Key
Brand
Surf -- 25 40 50
Sunlight 25 -- 35 45
Gnat 10 15 -- 30
Key 0 5 20 --

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 Converted to matrix of similarity using
formula
 Sij = (Rij x Rji) / N
› where Sij= Matrix of similarity between i & j
brands
› Rij = number of respondents preferred
brand i over j
› Rji = number of respondents preferred
brand j over I
› N= total respondent
›
›

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S= Surf Sunlight Gnat Key
Surf -- 12.5 8 0
Sunlight -- -- 10.5 4.5
Gnat -- -- -- 12.0
Key -- -- -- --

S= Surf Sunlight Gnat Key

Surf -- 1 4 6
Sunlight -- -- 3 5
Gnat -- -- -- 2
Key -- -- -- --

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 Limitation of MDS
1. The concept of similarity & preferences
are not very clear. As such the
respondents perception of both
factors may vary
2. There are empirical limitations-
attributes are subjective to
respondents
3. Difficult to interpret results

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