Market Segmentation.docx

7/27/2019 Market Segmentation.docx

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Market Segmentation:

Market segmentation consists of dividing the market into different groups of customers

known as market segments with distinct characteristics, needs and behaviors.The basis of

segmentation is based on two important dimensions, which are

1.

Segmentation based on benefits sought by the customers2. Segmentation based on observable characteristics of customers.

In order to understand the effects of various factors on customersbehavior, we have tried toanalyze the present market segmentation on basis of few factors within the framework

mentioned above. Being a consumer product the market can be segmented into

1. Geographical segmentation1) Location 2) Density 3) Distribution channels 4) Climate

2. Demographic segmentation1)Age 2) Gender 3) Income 4) Lifestyle 5) Family life cycle

3. Psychological criteria1) Psychographics

4. Behavioral criteria1) End use 2) Benefits sought 3) Usage rates 4) Loyalty

The entire analysis is based on above four criteria for three different products offered by

Dettol. The products offered are

1. Dettol Antiseptic liquid

2. Dettol Antiseptic soap

3.

Dettol hand-wash

Geographical segmentation: Geographical segmentation is an important factor in success

of any market strategy. It determines the efficiency in which the company can market its

products and target the market in systematic, focused approach. The distribution channels is

managed by a well structured sales force responsible for achieving sales for the entire

product portfolio of more than 150 stock keeping units(SKUs). This determines the easy of

availability of product on local markets hence acting as a most important determinant for

growth.

The location density and climate plays an important role in demand especially with that of

Dettol soaps which are more suitable for high heat and humid places due to its anti bacterial

positioning.

Demographic Segmentation: Demographic segmentation plays an important role in

determination of demand in the market for the products. The market demand for Dettol

soaps and hand wash is heavily influenced by age, gender, income and lifestyle. Whereas the

demand for antiseptic liquid is relatively inelastic due its multipurpose use in various

household chores such as washing, cleaning, first aid. The demand for Dettol soaps is highly

influenced by gender and age because of the fact that it is positioned as an anti bacterial soap

rather than a beauty soap. Income plays an important role since it influences the willingness

to buy costly beauty soaps and the inclination to use of hand washes. The divide is widely

visible in rural and urban household, which are influenced by the buying capacity and brand

awareness.


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Psychological segmentation:

The psychological approaches rely on the analysis of customers activities, interests and

needs in order to understand consumer consumption patterns and behavior. The brand

value and its effect on various customers play an important role on determining how

customers perceive the product as a whole. Dettol antiseptic liquid is an established brandand is mainly viewed as an necessary rather than a luxury because of its versatility. The

Dettol soap is perceived as a soap mainly used for a specific purpose such as to avoid

bacterial problems but not for a regular use. Hand wash as of today is well position though in

a competitive market but is perceived as a costly product in the rural households and hence

market share in that market is very low.

Based on Behavioral Segmentation: The segmentation based on end use, benefitssought, and brand loyalty plays an important role in success of a product and brand in that

market. The segmentation can be best captured by understanding what customers want

which is as follows:

Benefits that Customers seek in a antiseptic liquid:

1. Use with bathing water for a complete germ free bath

2. Use with mopping water to disinfect floors completely

3. Use in washing laundry to disinfect your clothes

4. Use for cuts and wounds and as a must have product for first aid

5. Can be used as a disinfectant in shaving

Benefits thats customers seek in a antiseptic soap

1. Anti bacterial protection

2. Moisturizing and skin care properties

3.

Lower price for higher quality

4. Availability in different fragrances

Benefits that customers seek in an hand wash:

1. Effective protection against germs

2. Price, availability in various packet sizes and refill packs

3. Gentle on skin and good fragrance

4. Moisturizing properties

The above segmentation helps us to understand the market in a focused approach helping us

to with positioning and targeting the market in a systematic and cost effective way.


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Targeting:

The most important step after segmentation of the market is targeting. The following

strategies can be used for targeting the consumer market. They are

1. Single segment concentration

2. Selective specialization

3.

Product specialization4. Market specialization

5. Full market coverage

The other two important strategies are undifferentiated marketing in which the firm

ignores the market segmentation and targets the whole market with one market offer. It

focuses on buyer requirements and needs rather than the differences in buyers of the

product. On the other hand in differentiated marketing the firm operates in several markets

segments and thus places its strategies and programs for each segment in isolation.

Dettol has established it self as a market leader in the antiseptic liquid category, it continues

to take up various initiatives to ensure that it retains the position. Various programs like

Surakshit Parivar, nationwide Healthy Hand Wash programs have been carried out tospread awareness and also promote their products by understanding the needs and specific

requirements of various segments.

The entire customer base of Dettol can be divided in to Urban, Rural and Institutional

buyers.Even though the list is not exhaustive it is diverse enough to warrant assumption of

these three segments as three different markets.

The firm may select a single segment concentrationif the firm feels its product penetration

in different markets is low and if the strategy is to consolidate the existing market share. This

is demonstrated by the fact that hand-wash market, though highly competitive, is beingtargeted aggressively in urban and to Institutional buyers because of the fact that market in

rural arrears is not well developed and the brand awareness is less resulting in long

gestation period.

Dettol follows selective specialization by targeting each market based on the market

potential. There is little synergy among the segments but each segment is a potential

moneymaker. This multi segment coverage strategy has a advantage of diversifying the firms

risk. This is seen by the fact that Dettol antiseptic liquid follows a product specialization

targetingbecause of RB market leader position and brand loyalty in that product.

As far as Urban market is concerned the firms follows a market specialization approach since

all the three products can be sold in the market. Hand wash is basically targeted mainly at

both Urban and institutional buyers due to its lower product awareness in rural areas. Soap

which has a stiff competition in Urban sector is being matched with lifebuoy which is a

market leader in rural soap markets.

The main aim of RB group is full market coverage there by increasing its market share and

diversifying its risk and attaining higher market share.


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Demographic characteristics:


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Demographic characteristics of the consumer segmentation can be divided into four

divisions to better understand the requirements and product utility. The four divisions,

which our consumer analysis was based on, are

Urban Households:The Dettol antiseptic liquid is used for various purposes such as cleaning, laundry and plays a

major role of disinfecting liquid. The major consideration of the urban household is the

quality and availability of the product and Dettol has become a common household item.

Price can be consideration for the lower middle class but the quality aspect plays a major

role in Dettols reign as a market leader.

Rural Households: The penetration of Dettol in rural areas is less than adequate even after

being a major player. The main problem faced by Dettol is not the completion from other

players but lack of brand awareness and the potential benefits of the products. Hence as of

today rural market is a untapped market but is growing steadily with the rise in income,

education and communication technology.

Institutional Buyers: The various establishments such as schools, clinics and restaurants are

one of the major markets even though the market demand is less in this segment due to

various factors. The availability of stronger versions, bulk requirements and customized

ordering is a major obstacle for the growth in this segment.

Dettol Soap:

Being a market leader and a household name Dettol has been associated with cleaning and

disinfecting and has become a synonym with anti bacterial protection. Dettol soap is place ina segment and branded as an antiseptic soap and has a competition from Savlon , Lifebuoy

and safeguard. It also faces some completion from medicated soaps that are being sold in the

market.

Benefits that Customers seek:

Customers seek a soap which not only protects them from germs but also takes care of the

skin care and beauty quotient. Even though the soap has a clinical smell it does provide the

customers with a clean and healthy feeling. The major drawback is the customers brand

awareness of being only a antiseptic soap.

5. Anti bacterial protection

6.

Moisturizing and skin care properties

7. Lower price for higher quality

8. Availability in different fragrances

Demographic characteristics:

Urban household: The urban households are mostly attracted by high-end beauty soaps

then that of anti bacterial soaps. This has limited the market growth potential of Dettol hence

donning the role of a market follower rather than that of market leader. The company has

brought in different variations of the soap such as Dettol skin care, Dettol cool soap, Dettolfresh soap etc. Due to its high brand awareness as being a disinfectant maker the market for


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the same as been stagnant. The major demand for the product is during summers and for

athletes because of its anti-bacterial properties.

Rural Households: The major factor is the price and durability of the soap. The beauty soap

market though has a presence the market is dominated by lifebuoy and other low cost high

durable soaps. Dettol soaps unlike the liquid product has been growing rapidly in the ruralmarket because of its durability, cost and unique fragrance. Even though lifebuoy has

dominated the segment the fragrance advantage has tilted the market demand in favor of

Dettol . The improving communication has also acted as a major determinant in the market

growth.

Institutional users: There is very in significant presence in the market because of the growth

in use of hand washes and other antiseptic liquids thus reducing the market share of soaps.

Dettol Hand-wash:

Dettol has introduced its hand-wash products in various segments such as original

handwash, skincare handwash, sensitive handwash, sensitive handwash, and fresh

handwash. The constant innovation such as No-Touch hand wash has drastically improved it

market share in handwash maret which has been dominated by lifebuoy.

Benefits that Customers seek:

5. Effective protection against germs

6. Price, availability in various packet sizes and refill packs

7.

Gentle on skin and good fragrance8. Moisturizing properties

Different segments:

Urban Households: The growth of the market has been very high the urban market. The

brand awareness of Dettol as being a antiseptic market leader has propelled the buying

pattern of the customers. The market is characterized by high competition from lifebuoy and

other products. Hence high differentiation in terms of product offering and price is

imperative for the growth and development in this market.

Rural Household: This market is still in nascent stage and the lack of awareness is a

hindering factor for the growth. Even though income levels are growing in Indias ruralhousehold the market is extremely price sensitive.

Institutional Buyers: This segments also has a high competition from lifebuoy and other

lower priced products. The main important factor is the availability of low price and

customized bulk deliverable options.


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Dettol Antiseptic liquid is a well known product across the country and is a market leader

with 87% market share only rivaled by savlon which has a market share of 13%.

Dettol soap is an new entrant and is riding on the brand loyalty of antiseptic

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Market Segmentation.docx