target marketing

TARGET MARKETING

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

At the end of this module the learning outcomes are.

1. Why there is a need to segment markets?

2. What are the various levels of market segmentation?

3. What are bases for segmenting consumer markets?

4. How the markets are targeted?

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

SUGGESTED READINGS

1. Marketing Management by Philip Kotler, chapter 9 &10th edition.

2. Marketing Management by Ramaswami and Namkumari, Chapter 6.

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

MARKET SEGMENTATION The need

Cannot serve all customers of this universe.

No company has that kind of resources. Customers

Too numerous Diverse in their buying requirement

Need to identify the market segments that it can serve more effectively

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

MARKET SEGMENTATION.

- The universe is heterogeneous.

- Divide the universe into market segments, where buying or need requirements is same i.e. homogenous.

- Attack one or few market segments.

- This is target marketing.

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TARGET MARKETING

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Steps in the Targeting Process:

Market Positioning

Market Targeting

Market Segmentation

TARGET MARKETING

Target marketing requires marketers to take three major steps:

Identify and profile distinct groups of buyers who differ in their needs and preferences (market segmentation).

Select one or more market segments to enter (market targeting).

For each target segment, establish and communicate the key distinctive benefit(s) of the company’s market offering (market positioning).

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

Mass Marketing Seller engages in mass production.

Mass distribution.

Mass promotion of one product for all buyers.

Example

Coke in 60 & 70s, Sold in India

One size 200 ml.

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

Arguments for mass market. Creates largest potential market Leads to lower cost Lead to lower prices. Higher margins

Why criticised Market fragmentation Splintering of the market Mass media proliferation. Distribution channel proliferation

Difficult to practice “one size fits all’’ marketing.

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USING MARKET SEGMENTATION

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Segment MarketingSegment Marketing

Niche MarketingNiche Marketing

Local MarketingLocal Marketing

Individual MarketingIndividual Marketing

Levels of Micromarketing

MARKET SEGMENTATION AND SELECTING TARGET MARKETS

MARKET SEGMENTATION LEVELS 1. Segment Marketing

Consists of a large identifiable group within a market with similar wants, purchasing power, attitudes or buying habits

Each segment’s buyers are assumed to be quite similar in needs /wants

No two buyers all alike Flexible market offerings

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

Flexible market offering consists of two parts

1. Naked solution - Consists of products and service

elements that all segment members value

2. Options - That some segment members value- Each option carries additional prices.

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

Example – Segment Marketing Delta Airlines

    Economy Class passenger - Seat - Food - Soft Drink

All of them – naked solution Charges extra

- Alcoholic beverages - Earphones

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

Segment marketing – benefits- More fine tuned product- Price it appropriately for the target

audience - Fewer competitors - Easier choice of

• Distribution channels • Communication channels

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

Niche marketing - Narrowly defined group- Needs are not well serviced - Seeking a distinctive mix of

benefits - Fairly small market size - Normally attract one or two players - Customers willing to pay a

premium price.

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

1. High end designer wear like Gucci, Chanel, Tarun Tahiliani etc.

2. Automobiles like Ferrari, Maserati, Lamborghini etc.

WHAT IS A NICHE TODAY MAY BECOME A SEGMENT TOMORROW AND VICE VERSA!!

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2. Ostrichesonline.com - Selling Ostrich derived products - On line - 2 million $ sales in 1998- Visitors can buy

Ostrich meat Feathers Leather jackets Videos Eggshells Skin care products derived from ostrich Body oil

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

3. Local marketing - Needs of local customer groups

Example Kraft Cheese Helps supermarket chains Identify cheese assortment and shelf

layout Optimise cheese sales in

- Low- Middle- High income stores - Different ethnic groups

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

4. Individual marketing - Ultimate level of segmentation - Segment of one.- One-to-one marketing.- Customised to individuals - Tailor made- Cobbler designed shoes.- Customised industrial products

Use of new technologies - Computers.- Databases

Customised offering.

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

Example

1.     Dilip Chhabria -Designer cars

- Customised cars

- Small market

- About 500 a year

- Each car is unique, high prices

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

Turning to Mass customisationIt is the ability to prepare on a mass basis

individually designed products and communication to meet each customer’s requirements.

Example.Levi’s Jeans

- Customer measurements.- Jeans ready in 8 hrs.

Mattel Barbie com Design your own Barbie doll.

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

- Choose Doll’s • Skin tone • Eye colour • Haircolor.• Clothes • Accessories • Her likes and dislikes.

- When Barbie delivered.• Doll’s name on the package• Computer generated paragraph about her

personality

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USING MARKET SEGMENTATION

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Basic Market-Preference Patterns

USING MARKET SEGMENTATION

Segment profitability

Segment positioning

Needs-based segmentation

Segment identification

Segment attractiveness

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Needs-based Segmentation Process

SEGMENTATION

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Measurable Actionable

Substantial Accessible

Differentiable

Characteristics of Effective Segments

SEGMENTING CONSUMER MARKETS

Nation or country State or region City or metro size Density Climate

Bases for Segmentation

Geographic Demographic Psychographic Behavioral

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

Example GeographicFord Ikon in India

1. World car

2. Changes for India 1. Higher suspension

2. Larger size air conditioner, higher ambient temperature

3. Lower average speeds

4. Handle adulterated fuel

5. Petrol / diesel adulterated with kerosene

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SEGMENTING CONSUMER MARKETS

Age, race, gender Income, education Family size Family life cycle Occupation Religion, nationality Generation Social class

Bases for Segmentation

Geographic Demographic Psychographic Behavioral

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SEGMENTING CONSUMER MARKETS

Lifestyle Activities Interests Opinions

Personality Core values

Bases for Segmentation

Geographic Demographic Psychographic Behavioral

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

a. Lifestyle Nestle Classic

- Pleasure of making coffee

Adding milk, sugar, coffee in hot milk

Nestle “3 in 1 - Office goers- Paucity of time - Espresso feeling - Milk sugar coffee premixed

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b. Personality - Targeting consumer personality

- Customer of Ford Independent Impulsive Masculine Alert to change Self confident

- Customers of Chevrolet Conservative. Thrifty Prestige. Conscious. Avoid extremes

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MARKET SEGMENTATION AND SELECTING TARGET MARKETS

C. VALUES

Tourists to Disneyland

• Fun seekers

• Families visit

Tourists to Udayan child welfare unit at Kolkatta

• Stay and meet poor children

• Share thoughts

• Donate

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SEGMENTING CONSUMER MARKETS

Occasions Benefits User status Usage rate Loyalty status Buyer-readiness Attitude

Bases for Segmentation

Geographic Demographic Psychographic Behavioral

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SEGMENTING CONSUMER MARKETS

Multi-attribute segmentation via geoclustering combines multiple variables to identify smaller, better-defined target groups

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MARKET TARGETING STRATEGIES

Evaluating and selecting market segments requires assessing the segment’s overall attractiveness in light of company’s objectives and resources.

Five patterns of target market selection can then be considered.

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MARKET TARGETING STRATEGIES

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Five Patterns of Target Market Selection

MARKET TARGETING STRATEGIES Targeting multiple segments may

result in cost economies Higher costs using differentiated

marketing include: Product modification cost Manufacturing cost Administrative cost Inventory cost Promotion cost

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For details and bookings contact:-

Parveen Kumar Chadha… THINK TANK

(Founder and C.E.O of Saxbee Consultants)

Email :-saxbeeconsultants@gmail.com

Mobile No. +91-9818308353

Address:-First Floor G-20(A), Kirti Nagar,

New Delhi India Postal Code-110015