market segmentation(marketing)
TRANSCRIPT
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