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SEGMENTATION
ANDTARGETING
STRATEGIESBy: ANKITA GAUR 05-MBA-2012
MEENU GUPTA 29-MBA-2012SAKSHI GUPTA 45-MBA-2012
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people or organizations with needs or wants, and with the ability and the willingness to buy.
A group of people that lacks anyone of these characteristics is not a
market.
A Market Is...
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The Concept of Market Segmentation
3
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TITAN WATCHES
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Market can be segmented using several
bases
A market/ consumer population for a productcan be segmented using several relevant bases.The major ones include:
GeographicDemographics
Socio-cultural
Psychographic
Psycho-graphics
Buying Behavior
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Geographic Segmentation
Geographic decides the product consumption
pattern. People in coastal areas of Konkan and
Goa relish rice, a staple grain there and fishabundantly available from sea. Southern are
found of coffee and north Indians like Tea
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Age: It is essentially a case of age based
segmentation of a market.
Example:Amul has segmented his product in
different age group
For kids: Amul kool, chocolate milk, Nutramul energy
drink.
For Youth: Amul cool kafe.
For womens and older people: Amul calci+, Amul
Shakti energy drink
Gender: Gender is another key variable/base under
demographic segmentation.
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Example: Adidas targets women in India
German shoe maker Adidas is trying to develop
the women segment in India for its products.
Emami segmented its product in gender
Womens: Naturally fair
Men: Fair and handsome
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Socio-Cultural Factors
McDonald has both veg and non veg burger.
McDonald has veg burger for vegetarian and nonveg
burger for non vegetarian.
Psychographic segmentation
Life style:
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Buying Behavior Segmentation
Usage rate: - Heavy user / moderate user / light user of a product.
User status: - Regular / potential / first time user / irregular
/occasional.
Loyalty to brand: - Hard core loyal / split loyal / shifting /
switches.Occasion: - Holidays and occasion stimulate customer to purchase
products.
Attitude toward offering: - Enthusiastic / positive attitude /
negative attitude / indifferent / hostile.
Example:Shampoos, soap and all FMCG products buying behavior
segmentation is used.
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Segmentation approaches
Depends on number of bases (factors) applied:
Single-stage segmentation (one base).
Two-stage segmentation (two bases).
Multi-stage segmentation (three or morebases).
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TYPE OF FIRM SUITABLE
SEGMENTATIONAPPROACH
RATIONALE
Cosmetics and perfumes firms(such asLOreal)
Demographics (gender, age)OR
Benefit
Cosmetics and perfumes firmscould effectively use a varietyof segmentation variables. Forexample, males and femaleswould have different needs, aswould younger and olderconsumers.
Benefit segmentation could beused (some possible couldinclude: skin repair, removewrinkles, glowing skin, acnereduction, attractive look, social
status, celebrity identification).
Car manufacturerPsychographic(social class)
OR
Geographic
Segmenting by social classmakes sense for this productcategory, as cars are often areflection of a consumerslifestyle and used as a socialsymbol of success.
Geographic segmentation (suchas urban versus rural) could alsobe an effective approach
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Criteria for market segmentation
IDENTIFICATION
MEASURABILITY
ACCESSIBILITY
SUBSTANTIALLY
STABILITY
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Multisegment Marketing
Marriott Courtyard
Ritz-Carlton Hotels
Marriott Conference Centers
Marriott ExecuStay
Marriott Vacation Clubs
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EXAMPLE: GENERAL MOTORS
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EXAMPLE- APPLE
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Segmentation Global Markets
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Examples
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Advantages
Facilitates proper choice of target marketing
Higher Profits
Facilitates tapping of the market, adapting theoffer to the target
Stimulating Innovation
Makes the marketing effort more efficient andeconomic:
Sustainable customer relationships in all phases ofcustomer life cycle
Targeted communication
Higher market Shares
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Targeting Marketing
Target market is a business term meaning the market segmentto which a particular good or service is marketed. It is mainlydefined by age, gender, geography, socio-economic grouping, orany other combination of demographics.
The beauty of target marketing is that it makes the promotion,pricing and distribution of your products and/or services easier andmore cost-effective.
Target marketing provides a focus to all of your marketing activities.In choosing target market, a firm basically carries out anevaluation of the various segments and selects those segmentsthat are most appropriate to it.
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Process of choosing a target market
Choosing the target market is related to, but notsynonymous with, market segmentation.
Segmentation is the means or the tool; choosingthe target market is the purpose.
Segmentation can also be viewed as the prelude totarget market selection.
Choosing the target market usually follows multi-level segmentation using different bases.
Choosing the target market involves several othertasks in addition to segmentation.
Looking at each segment as a distinct marketingopportunity
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Evaluating the worth of each segment (sales/profit potential).
Evaluating whether the segment is:
Distinguishable.
Measurable.
Sizable.
Accessible.
Growing. Profitable.
Compatible with the firmsresources.
Examining whether it is better to choose the whole market, or the only a fewsegment, and deciding which ones should be chosen.
Looking for segments, which are relatively less satisfied by the current offers in
the market from competing brands. Checking out if the firm has the differential advantage / distinctive capability for
serving the selected segments.
Evaluating the firmsresources and checking whether it is possible to put in themarketing programmes required for capturing the spotted segments with thoseresources.
Finally selecting those segments that are most appropriate for the firm.
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FACTORS TO BE CONSIDERED WHILETARGET MARKET
SELECTION Attractiveness of a Market Segment
Suitability of Market Segments to the Firm
1. Whether the firm can offer superior value to the customers inthe segment
2. The impact of serving the segment on the firm's image
3. Access to distribution channels required to serve the segment4. The firm's resources vs. capital investment required to serve
the segment
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TARGET MARKET STRATEGIES
Single-segment strategy
Selective specialization
Product specialization
Market specialization
Full market coverage
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Market Targeting
S1 S2 S3
P1
P2
P3
P = ProductsS = Market Segment
Single Segment Concentration
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Market Targeting
(
S1 S2 S3
P1
P2
P3
P = ProductsS = Market Segment
Selective Specialization
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Market Targeting
S1 S2 S3
P1
P2
P3
P = ProductsS = Market Segment
Product Specialization
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Market Targeting
S1 S2 S3
P1
P2
P3
P = ProductsS = Market Segment
Market Specialization
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Market Targeting
S1 S2 S3
P1
P2
P3
P = ProductsS = Market Segment
Full Market Coverage
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DECISIONS INVOLVED IN TARGETING STRATEGYINCLUDE:-
which segments to targeting.
how many products to offer.
which products to offer in which segments.
TARGETING STRATEGY DECISIONS AREINFLUENCED BY:
Market maturity.
Diversity of buyers' needs and preferences. Strength of the competition.
The volume of sales required for profitability.
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SEGMENT TION
IMPULSE SEGMENT
For eating then and thereKhaane walo ko khane ka bahana chaiye
GIFT SEGMENTPurchased to gift some one
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T RGET M RKET
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SEGMENT TION
On the basis of Geography
-divided Indian market in telecomcircles.
-Subdivided States into category A, Band C
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T RGETING
Earlier elite class above age group of 25
years.
Corporate people and business men.
Again targeted youth by introducing
YOUTOPIA plan.
Targeted women and senior citizens byintroducing post paid plans.
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THANK YOU(Errors and omissions regretted)