mm module 3

8/3/2019 MM MODULE 3

1/30

Amity Business School

Process ofSegmentation

1. Survey

2. Formation of segments

3. Customer profile

4. Analysis & Evaluation

5. Selection of target markets

EFFECTIVE SEGMENTATION

Measurable Substantial Accessible

Differentiation Actionable


2/30


2. Formation of segments

1. Build-up approach (Small no. of customers)

2. Break-down approach (Large no. of customers)

5 broad bases for segmentation

1. Buyers potential & general characteristics

2. Lifestyle & the way & means of buyers

3. Desirable values

4. Attitude towards brands

5. Buying behavior

STRATEGY

Single segment concentration Selective specialization

Product specialization Market specialization

Full market coverage (Undifferentiated & differentiated mkting)


3/30


PATTERNS OF

MARKET SEGMENTATION

1. Based on PREFERENCESHOMOGENOUS DIFFUSED CLUSTEREDNo branding Many brand Mkt for shoes, cars,

is based ondifferent attributes.

2. NEED BASED MARKET SEGMENTATION

MARKET PARTITIONING : Hierarchy of attributes consumer follow inchoosing a brand. Eg : Washing powder

NEED Cheap Moderate Expensive

SIZE Small Medium Large Super large Family Pack

BRAND Local Dealer Surf Surf Excel Ariel Nirma

FORMS Bar Cake Powder Liquid


4/30


3. Customer profilingPositioning & manipulation of marketing mix.

4. Analysis & Evaluation of Segments

Demand potentialCompetition analysis in each segment.Forecasting

5. Selection of target markets


5/30


1. Manufacturing the product with the market demand.

2. Working for economic functioning.

3. Tapping opportunity and doing away with the threat.

4. Enables the company for appropriate marketing mix.

5. Overall monitoring of all marketing operations.

6. Increased sales & market share.

7. Providing growth opportunities to smaller firm.

8. Improving the products.

Significance ofSEGMENTATION


6/30


SEGMENTING

CONSUMER MARKET

GEOGRAPHIC SEGMENTATION : Nations, states, regions, countries,cities or neighborhood.

DEMOGRAPHIC SEGMENTATION : Based on age, family size, family lifecycle, gender, income, occupation, education, religion, race, generation,

nationality & social class.PSYCHOGRAPHIC SEGMENTATION: Based on Lifestyle, value &personality.

BEHAVIORAL SEGMENTATION: On basis of decision roles, occasions,benefits, user status, usage rate loyalty status, readiness stage, attitude

towards product.MULTI-ATTRIBUTE SEGMENTATION (GEOCLUSTERING): Combiningseveral variables for identifying smaller better defined target group.

TARGETING MULTIPLE SEGMENTS


7/30

Amity Business SchoolBENEFITSMOBIL Classifications

1. Road Warriors: 16% (Premium Products & Quality)

2. Generations F: 27% Fast

3. True Blues: 16% Branded

4. Home Bodies: 21 % Convenience

5. Price Shoppers: 20% Low Price

LOYALITY [Competition Based Segmentation]

1. Hard-Core Loyal

2. Split loyals

3. Shifting loyals

4. Switchers


8/30


Segmenting the Indian Market: The Income Route

VeryRich1.2

Consuming

Class 32.5

Climbers 32.5

Aspirants 44.0

Destitutes 33.0


9/30


Socio-Economic Pyramid of Indian Markets

E1&E2 Primarily unskilled labour

C1&C2 Skilled Workers

D1&D2 Same as above with SSC Qualification


10/30


Psychographic Segmentation(Psychology +Demographics)

SRI Consulting Business Intelligence (SRIC-BI) VALS TM

Based on responses derived from questionnaire featuring 4demographic and 35 attitudinal questions. 80,000 surveys per year.

INNOVATORS High ResourcesHigh Innovation

Ideals Achievement Self-Expression

Thinkers Achievers Experiences

Believers Strivers Makers

SURVIVORS Low Resources

Low Innovation

PrimaryMotivation


11/30



12/30


Product-Related SegmentationDividing a consumer population intohomogeneous groups based on

characteristics of their relationships tothe product Can take the form of segmenting based on:

Benefits that people seek when they buy

Usage rates for a product

Consumers brand loyalty toward a product


13/30

Amity Business School Benefits Focuses on the attributes that people seek in

a good or service and the benefits that theyexpect to receive from that good or service

Groups consumers into segments based onwhat they want a product to do for them

Usage Rates Segmenting by grouping people according to

the amounts of a product that they buy and

use Markets often divided into heavy-user,

moderate-user, and light-user segments

The 80/20 principle (Praedos Law)


14/30


Brand Loyalty

Segmenting consumers grouped accordingto the strength of brand loyalty felt toward a

product

Frequent flyer programs of airlines andmany hotels


15/30

Amity Business School Using

PsychographicSegmentation Psychographic

profiles producerich descriptions ofpotential target

markets Greater detail aids

in matching acompanys image

and its offeringswith the types ofconsumers whoare likely

purchasers


16/30


Using Multiple Segmentation Bases

Increase accuracy in reaching the rightmarkets

Combine multiple bases

Geographic and Demographic

Product-related with income and expenditurepatterns

Others


17/30


SEGMENTINGBUSINESS MARKET

DEMOGRAPHIC: Industry, Company size, Location.OPERATING VARIABLES: Technology, User or Non-user status, Customercapabilities.

PURCHASING APPROACHES: Purchasing function organization, Powerstructure, Nature of existing relationships, General purchase policies,Purchasing criteria.

SITUATIONAL FACTOR: Urgency, Specific application, Size of order.

PERSONAL CHARACTERSTICS: Buyer-seller similarity, Attitudes towards risk& Loyalty.

BUSINESS BUYERS can be FIRST TIME PROSPECTS, NOVICES, SOPHISTICATES.

INDUSTRIAL BUYERS can be PROGRAMMED, RELATIONSHIP, TRANSACTION &BARGAIN HUNTERS.


18/30


TARGETING

1. Standardization2. Differentiation

4 Ps, People, Images, Service, Channel

3. Focus

Positioning

Simply, positioning is how target market is defined

to the competitors.

[A] Marketing environment[B] Competitive advantage


19/30

Amity Business SchoolStrategies for Reaching

Target Markets

Undifferentiated Marketing: when afirm produces only one product or product

line and promotes it to all customers with asingle marketing mix.

Differentiated Marketing: when a firmproduces numerous products & promotesthem with a different marketing mix designedto satisfy smaller segments.


20/30


Concentrated Marketing (nichemarketing): when a firm commits all of itsmarketing resources to serve a single

market segment

Micromarketing: involves targeting

potential customers at a very basic level,such as by ZIP code, specific occupation,lifestyle, or individual household


21/30


Selecting and Executing a Strategy

No single, best choice strategy suits all

firms Determinants of a market-specific strategy:

Company resources

Product homogeneity

Stage in the product life-cycle

Competitors strategy


22/30


Positioning: a marketing strategy thatemphasizes serving a specific marketsegment by achieving a certain position inbuyers minds

Attributes

Price/quality

Competitors

Application

Product user

Product class


23/30


Positioning mapGraphic illustration that shows differences inconsumers perceptions of competing

products

Reposition

Marketing strategy to change the position ofits product in consumers minds relative to thepositions of competing products

PRODUCT DIFFERENTIATION


24/30


PRODUCT DIFFERENTIATION

FORM FEATURES PERFORMANCE QUALITY

CONFORMANCE STYLE DESIGNDURABILITY RELIABILITY REPAIRABILITY

SERVICE DIFFERENTIATION

ORDERING EASE DELIVERY INSTALLATIONCUSTOMER TRAINING CUSTOMER CONSUTING

MAINTENANCE & REPAIR MISC.

PERSONNEL DIFFERENTIATION

CHANNEL DIFFERENTIATION

IMAGE DIFFERENTIATIONSYMBOL, COLORS, SLOGAN & SPECIAL ATTRIBUTES

PHYSICAL PLANT

EVENTS & SPONSORSHIP

USING MULTIPLE IMAGE BUILDING TECHNIQUES

P iti i St t i


25/30


Positioning Strategies

1. Product Attributes

2. Benefits3. Usage Occasions4.Users5. Against a Competitor6. Away from a Competitor7. Product Classes

Positioning Differences1. Important

2. Distinctive3. Superior4. Communicable5. Preemptive

6. Affordable7. Profitable


26/30

Amity Business SchoolMarket Positioning

Choosing a Positioning Strategy

ServicesDifferentiation

i.e. Delivery, Installation,

Repair Services,Customer

Training Services

ProductDifferentiation

i.e. Features, Performance,

Style & Design, orAttributes

Image

Differentiationi.e. Symbols,

Atmospheres, Events

Personnel

Differentiationi.e. Hiring, TrainingBetter People Than

Competitors Do

Identifying Possible Competitive Advantage

M k P i i i


27/30


Form

Fea-

tures

Perfor-

mance Quality

Conform-

anceQuality

Dura-

bility

Relia-

bility

Repair-

abilityStyle Design

Choosing the right Competitive advantage

Product Differentiation

Market PositioningChoosing a Positioning Strategy

S l ti O ll


28/30


Morefor

More

Morefor theSame

MoreforLess

The same

forless

Less formuch

less

Price

More The same Less

More

The Same

Less

Selecting an OverallPositioning Strategy

C i i


29/30


Indication of

the health of the industry. spurs new product development. induces market leaders to enhance efficiency of their existing

products, introduce their new variants & even enter new productmarkets.

Understand changing needs, expectations and perceptions ofdifferent market segments.

Motivates firms to make their products feature rich and versatile. Development of New Intermediation processes and new roles of

Channel members (IT). Competition helps enlarge distribution base in any industry by

bringing in new players. Makes products and services reach customer much more

conveniently. Thus, strengthens the fit between customer needsand companys products, thus creating a loyal customer.

Competition shortens product life cycles.

Competition

INDUSTRY ANALYSIS


30/30


1. Basic facts of Industry2. Industry environment

3. Industry Structure

4. Barriers in the Industry

5. Industry attractiveness (Potential, Growth,profitability, Nature of Competition)

6. Industry Performance

7. Industry Practices8. Emerging Trends / likely Future patterns

INDUSTRY ANALYSIS

mm module 3

Documents