SEGMENTING and TARGETING

DIVIDE AND RULE

Slide 9-25

Dilbert Comic StripIs segmenting markets a“good marketing thing”?

HLL expands Pears soap to kids segment

Titan Watches: Time to tap the potential of different segments

Titan Edge – the world’s slimmest watch; Nebula – in solid gold and precious stones; the Gold and Steel collection; Raga 9 to 5 – for the woman achiever; Flip – India’s first and only reversible watch with two movements and dial faces; and Fastrack in the sporty casual category.

Taking women on a ride(Bajaj Wave DTS-i)

Himalaya Herbal Healthcare serves a growing niche market(FMHG)

What segments are being targeted?• Nokia cell phones Company has divided its customers into different segments based on their involvement levels ,product usage, income level and lifestyleProduct offerings under four broad heads: Live, Connect, Achieve and Explore. "While the 'Connect' category phones would appeal to someone whose requirements are very simple and basic, the N-series multimedia phones would fall under the 'Explore' category,”In the Indian context, the 1,100 range of phones would fit under the 'Connect' category where the emphasis is on the phones being simple and user friendly. Similarly, the Nokia E-series instruments have been classified for the 'Achieve' users for whom the phone is far more than just something you use to make calls.

Soft drink preferences—some segmentation variablesPreferred taste: Cola, lime, no taste, natural juice, ice teaCalorie/taste tradeoff: taste more important, some importance of both, will sacrifice taste for low caloriesUsage occasion: Multi-pack for home; single can/bottle; fountain drinkPrice sensitivity/brand loyalty: Willingness to pay more for brand

Some combined segments:1.Price sensitive, non-brand loyal ,cola-taste, full-flavor segment, multi-pack2.Price insensitive, cola taste, brand loyal, low calorie, multi-pack3.Price insensitive, natural juice, taste sensitive, single serving

• Market SegmentationMarket SegmentationDivision of the total market into smaller, relatively homogeneous groups

• No single marketing mix can satisfy everyone. Therefore, separate marketing mixes should be used for different market segments.

Steps in Market Segmentation, Targeting, and Positioning

Step 1. Market SegmentationBases for Segmenting Consumer Markets

Geographic

Demographic

Age, gender, family size and

life cycle, or income

Psychographic

Social class, lifestyle, or personality

Behavioral

Occasions, benefits, uses, or responses

Nations, states, regions or cities

Step 1. Market SegmentationLevels of Market Segmentation

Mass MarketingSame product to all consumers

(no segmentation)

Mass MarketingSame product to all consumers

(no segmentation)

Segment MarketingDifferent products to one or more segments

(some segmentation)

Segment MarketingDifferent products to one or more segments

(some segmentation)

MicromarketingProducts to suit the tastes of individuals or locations

(complete segmentation)

MicromarketingProducts to suit the tastes of individuals or locations

(complete segmentation)

Niche MarketingDifferent products to subgroups within segments

( more segmentation)

Niche MarketingDifferent products to subgroups within segments

( more segmentation)

Response-based segmentation:Putting the horse before the cart

“Urban India is getting saturated. In the cities, everyone who can afford a television has one. If you want to maintain high growth, you have

to penetrate into rural India.”- K. Ramachandran, Chief Executive Philips

Electronics India

Step 1. Market SegmentationRequirements for Effective Segmentation

• Size, purchasing power, profiles of segments can be measured.

• Segments must be effectively reached and served.

• Segments must be large or profitable enough to serve.

Measurable Measurable

AccessibleAccessible

SubstantialSubstantial

DifferentialDifferential

ActionableActionable

• Segments must respond differently to different marketing mix elements & actions.

• Must be able to attract and serve the segments.

Step 2. Market TargetingEvaluating Market Segments

• Segment Size and GrowthSegment Size and Growth– Analyze sales, growth rates and expected profitability.

• Segment Structural AttractivenessSegment Structural Attractiveness– Consider effects of: Competitors, Availability of Substitute Products

and, the Power of Buyers & Suppliers.

• Company Objectives and ResourcesCompany Objectives and Resources– Company skills & resources relative to the segment(s).– Look for Competitive Advantages.

Five patterns for target market selection

Slide 9-32

FIGURE 9-5FIGURE 9-5 Selecting a target market for your fast-food restaurant next to an urban university (target market is shaded)

Slide 9-36

FIGURE 9-6FIGURE 9-6 Advertising actions to reach specific student segments

FIGURE 9-AFIGURE 9-A Market-product grid showing the size of markets for pillows for three different segments of sleepers

Task

What segments are being targeted?• Reebok• Mc Donalds

You can please some people all of the timeand all people some of the time, but youcannot please all people all of the time.