S.ABARNA PREETHI I-MBA

Identify profile of distinct groups of buyers who require separate product/marketing mixes

1. Mass marketing Seller engages in mass production,

distribution and promotion of one product for all buyers

Coca- Cola for many years

Consist large identifiable group within a market, buyers differ in wants, purchasing power, geographical locations, attitudes, habits

Smokers- heavy, regular, occasional smokers

Narrowly defined group a small market whose needs are not well served

Divide segments into sub segments – Heavy smokers

Marketing programs tailored to the needs and wants of local customers groups

Citibank provides different mixes of services – based on neighborhood, demographics

One to one marketing Coppler shoes- for individual Clothes tailor – made suit

Form of individual marketing – in which individual consumer takes more responsibility for determining which products/brand to buy

Ice cream buyers asked- how much value-sweetness and creaminess, preference segments

Homogeneous preferences – all consumers have same preference

Diffused preference – preferences scattered throughout the space –vary greatly in preferences

Clustered preferences Reveal distinct preference, clusters –

natural market segments

1. Survey stage- Conducts exploratory interviews and focus groups to gain consumer motivations

Collect data on attributes and brand awareness

2. Analysis stage – factor analysis, data removed, highly correlated variables

3. Profiling stage – in terms of distinguishing attitudes, behaviour, psychographics, dominant characteristics

1. Geographic segmentation Nation, state, region, countries, division,

local variations, Hotel customises, rooms and lobbies according to location

a)Age- wants and abilities range with age (1-3) years old, graduates

b)Gender – Clothing, hairstyling, cosmetics and magazines, applied opportunity for gender segmentation

c)Income- Blue collar worker- purchase colour television, car, not bought by poor

d)Generation – music, movies, politics and events

Target – baby boomers- using communication and symbols

Cohorts – group of people, share experiences of major external events – deeply affected their attitudes and preferences

e)Social class – strong influence in preference in cars, clothing, home furnishings, reading habits- design for special class

Buyers divided on the basis of life style, personality, values

a)life style – goods consume express life style

Ex: foods segregated

b)Personality – product with brand personalities

Ford buyers –independent, impulsive, masculine, alert to change and self confident

c)Values Marketers segment by core values people’s

choice over the long term appealing innerselves –to influence outerselves

a)Occasions – On the occasions they develop

Ex: Air travel vacation Help firms expand product usage – orange

juice, breakfast Lunch dinner, midday, Mother’s day,

Father’s day

b)Benefits 3 segment – travel to be with family,

adventure, educational purposes, people enjoy gambling, fun

Tooth paste – economy, medicinal, cosmetic and taste

Heavy toothpaste users - conservative

c)User status Non users, ex-users, potential users, first

time, regular users Blood banks – not rely only on regular

donors to supply blood –contact first time, ex-donors

d)Usage rate – into light, medium and heavy product users

Heavy users – small percentage of market account for high percentage of total consumption

e)Loyal status Varying degree of loyalty to specific brands,

stores/entities Hard core loyals- buy 1 brand all the time Split loyals – loyal to two or three brand Shifting loyals – shift from one to another Switchers – show no loyalty to any brand

f)buyer readiness stage Some unaware, aware, some interested,

informed, some desire product, intend to buy, advertising – make aware

g)Attitude enthusiastic, positive, indifferent, negative,

hostile, reinforce change

No longer talk about average consumer/limit analysis to few market segments

Retired adults – distinguish on income, asset saving, risk

Richer description of consumers/neighborhood-education, affluence, family life cycle, race, urbanisation

Start one segment, expand to other

On geography, benefits sought, usage rate Ask which segment, customers to serve Ex: Rubber industry company-decide which

industry to serve Sell to automobiles, tractors, trucks

Business buyers seek different benefit bundles on their stage in purchase decision process

1. First time prospects –customers not yet purchased, but want to buy from a vendor

2. Novices – Customers start purchasing relationship want to read manuals

3. Sophisticates –established customers wants speed in maintenance, repair

Mature commodity markets classify – 4 business segments

1. Programmed buyers – buyers view product not very important to operation, routine purchase item

2. Relationship buyers –Buyers view product- moderately important knowledgeable about competitive offerings

3. Transaction buyers – View product as very important-price and service sensitive

4. Bargain hunters – view product important and demand deepest discount, highest service

Market segments must be a)Measurable – size, characteristics

measured b)Substantial – Segments must be large,

profitable to serve c)Accessible – segments must be

effectively reached d)Differentiable – segments distinguishable e)Actionable –effective programmes

formulated

Once segmented –firm must decide how many and which one to target

1. firm must ask potential segment –has the characteristics

2.Firm consider investing in segment makes sense

5 patterns of target market 1. Single segment concentration Company select single segment Volkswagen concentrate on small car Gains strong knowledge of the segment –

High returns

Firm selects a number of segments (each segment money maker) radio broadcaster(young and older listeners)

Specialise in certain product sells to several segment

Microscope manufacturer sell to university lab, government lab, commercial lab

Firm concentrates on/serve many needs of particular customer group

Serve all customer groups with all products, IBM, general motors, Coca-Cola cover whole market into 2 types

a)Undifferentiated marketing Ignores market segment differences, mass

distribution, mass advertising

b)Differentiated marketing Operates in several market segments

different programmes for each segment Differentiated market creates more total

sales but costs higher

Product modification costs-modifying product

Manufacturing cost- expensive to produce 10 products

Administration costs – develop separate plans for each market segment

Inventory costs – costly to manage inventories

Promotion costs – different promotion programmes

Ethical choices of market targets Segment interrelationships and super

segment Segment by segment invasion plans

Meta marketing Strategic co-ordination of economic,

psychological, political and public relation skills

Appoint segment managers with sufficient authority and responsibility for building segments’ business