Market Segmentation and Targeting

Shardool katiyar ( 621016 )

Philem deepu singh ( 621017 )

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 Market Segmentation
• Market
• Intermarket
Segmentation:
– Divides a market into
Segments:
subsets of – Well-defined, similar
prospective clusters of customers
customers who across national
behave in the same boundaries.
way, have similar
wants, or have
similar
characteristics that
relate to purchase.

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 Target Markets

Targeting:
Selecting which segments in a market
are appropriate to focus on and
designing the means of reaching them.

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 Product Differentiation
• Product
Differentiation:
– Exists when a firm’s
offerings differ or are
perceived to differ from
those of competing
firms on any attribute,
including price.

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 From Mass Marketing to Mass Customization

• Mass Customization:
– Complex manufactured
products made to order.

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 Criteria for Effective Segmentation

Five Criteria:
1. Measurability
2. Accessibility
3. Substantialness
4. Durability
5. Differential Responsiveness

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 Stages in Developing Market Segmentation
Strategies

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 Bases for Segmentation

• Demographics
• Geographics
• Psychographics &
Lifestyles
• Benefit Segmentation
• Economic
Segmentation
• International
Segmentation

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 Combining Bases of Market
Segmentation

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 Segmentation Strategies

Undifferentiated Strategy

Differentiated Strategy

Concentrated Strategy

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 Countersegmentation Strategy

• Countersegmentation:
– An alternative strategy to traditional segmentation
approaches.
• Combines market segments
• Consumers accept lower price over variety

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 Factors Influencing Segmentation Strategy

• Size and type of the market

• Competitive factors
• Product-related factors:
1. Stage in the product life cycle.
2. Degree to which the product may be varied
or modified.
• Firm’s size and financial position

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 Estimating Segment Potentials
1. Set time period of interest.

1. Define product level.

1. Specify segment characteristics or

bases.

1. Identify geographic market boundaries.

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 Estimating Segment Potentials

1. Make assumptions about the marketing

environment.

1. Make assumptions about company’s own

marketing efforts and programs (controllable
factors).

1. Make estimates of market potential, industry

sales, and company sales.

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 Developing Forecasts
• Qualitative
• Quantitative
Procedures:
– Survey of Buyers’
Methods:
Intentions – Trend Analysis

– Expert Opinion – Market Tests

– Composite of – Statistical Demand

Salesforce Analysis
Estimates

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 Firm and Market Potentials and Forecasts

Best Possible Results Expected Results for Given Strategy

Industry Level Market Potential Market Forecast

Firm Level Sales Potential Sales Forecast

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 Targeting Market Segments

• To select target segments, the firm

must consider:
– The segment’s potential sales volume and
profits.

– Competition currently selling to the

segments.

– The firm’s abilities and objectives.

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 Positioning

Positioning:
Designing a marketing program, including
the product mix, that is consistent with how
the company wants its products or
services to be perceived.

Repositioning:
When a firm wants to shift consumer
opinions about an existing brand.

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 Perceptual Maps
• Perceptual Maps:
– Spatial representations of consumer
perceptions of products or brands, are often
used to evaluate brand positions in a market.

• Diet Pepsi • Diet Sprite

• Diet 7-Up
• Pepsi Cola
• RC Cola • 7-Up
• Coke Classic • Sprite

• Dr Pepper
• Orange Crush

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 Micromarketing

Micromarketing:
Combines census and
Demographic data to identify
clusters of households
that share similar
consumption patterns.

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 Micromarketing
• Enhances the effectiveness of marketing efforts
by:
– Identifying potential markets for direct selling
through mail and telemarketing campaigns.

– Profiling customers by matching them to

demographic and lifestyle clusters.

– Learning which areas offer the greatest potential in

site selection for new stores or offices.

– Tailoring advertising themes and planning media.

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 Market Segmentation and Ethics

– Advertising to Children
– Harmful Products
– Privacy Issues
– Product Proliferation
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