Targeting & Segmentation

Target MarketingIdentifying those particular groups of customers which your product/service is capable of meeting their requirements (needs) most.Each of these groups constitute a market segmentSelecting one or more segments to enterEstablishing and communicating the product’s key distinctive benefits in that market

Market SegmentA large identifiable group within a market with similar wants, purchasing power, geographical locations, buying attitudes

Niche MarketingWhat is an attractive niche ?A distinct set of needsA premium can be charged Not likely to attract competitionGains certain economies through specialisationSufficient size, profit and growth potential

Local MarketingWhen the marketing mix is altered to suit the local conditions

eg. Giving a higher/ lower discount than what’s prevailing in the rest of the markets

or implementing a different promotion scheme

Individualised MarketingWhen the firm deals with each customer on a one – to – one basisWhen products are customised for the customer

Bases for SegmentationGeographic –territory demarcationsDemographic – age, family size, sex, income,education, religion, etc.Psychographic – lifestyle,personality,valuesBehavioral – knowledge,attitudes,usage

Behavioral variablesOccasions – birthdays, lunchtime,vacationsBenefits – eg.travel – business, vacation, educationalUser status – non users, ex users, first time users, regular users, potential usersUsage rate – light, medium, heavy

Loyalty status – diehards,shifters,switchersBuyer Readiness – unaware – aware – informed – interested – desire – intention to buyAttitude – enthusiastic, positive, indifferent, negative, hostile

Criteria for segmentationMeasurableSubstantialAccessibleDifferentiableActionable

Market TargetingSingle segment concentrationSelective specialisationProduct specialisationMarket specialisationFull Market coverage -

undifferentiated marketing differentiated marketing

Undifferentiated MarketingSingle product addressing all segments with a single marketing program.Mass production is possible giving scale economiesPushes price downwards enabling to attract price sensitive segments

Differentiated MarketingA separate market offering for every segmentMarketing programs for every segment could be differentPushes up costs at various levels, necessitating sufficient volumes for viabilityGenerates inter-segment rivalry