Marketing Management 5 - Identifying Market Segments and Target_print version.pdf

8/10/2019 Marketing Management 5 - Identifying Market Segments and Target_print version.pdf

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Chapter 5

Identifying Market Segments

and Target Any mass market is large, broad

and diverse. A marketer needs toidentify which market segmenthe/she can serve effectively.


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4.1 Shift of Mass Marketing to Micromarketing

Mass Marketing: The marketer engages mass production, mass distributionand mass promotion of one product for all buyers. Ex.Regular Coca-Cola, Writer ball pen, Nabisco EnergyBiscuit etc.

Micromarketing: Covering comparatively smaller market with more specific product and serviceoffer. Operated under one out of four different spans.

1. Segment A group of customers who share a similar set of needs and wants Low cost seekers, Luxury seekers, Quality seekers; Heavy user, moderate user & lightuser.

2. Niche More narrowly defined customer group seeking a distinctive mix ofbenefits English Shampoo, Recova Age defining cream, Diet coke. 3. Local Areas Marketing program tailored to the need and wants of localcustomer groups Nilkhet book market, restaurant in Gulshan and Banani. 4. Individuals Segments of one / customize marketing / One to One marketing Plastic surgery, Web marketing, wedding planner.


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4.2 Segmenting Consumer Market

Bases of Segmentation:Groups of variables are used to segment the consumer market. All of the variables can becategorized under four major variables called the bases of segmentation

Geographic

Demographic

Psychographic

Behavioral


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4.3 Market Targeting Marketers are increasingly combining several variables inan effort to identify smaller, better-defined target group.Nevertheless, single variable is not well enough to identify a

suitable segment as a target market. Multipleconsiderations need to be taken account to decide howmany and which ones to target. Example: Income vs. need

Effective Segmentation Criteria:

Market segments must rate favorably on five key criteria:

1. Measurable : Size, purchasing power, andcharacteristics of the segments can be measured.

2. Substan t ia l : Large and profitable enough to serve.

3. Access ib le : Can be effectively reached and

served.4. Differentiable : Conceptually distinguishable andrespond differently to different marketing mixelements.

5. Act ionab le : Effective programs can be formulated

for attracting and serve the segment.

AgeIncome

30

80


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Evaluate Different Market Segments:

Market segments can be evaluated under two considerations:

1. Segments Overall Attractiveness

2. Companys Objective,Com petenc ies and Reso urces

General Attractiveness - Size, Growth, Profitability, Scale of Economics and Low Risk

Structural Attractiveness Industry Competitors,Potential Entrants,Substitute product,

Bargaining power of suppliers,Bargaining power of customers.


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Selecting the Market Segments:

Single Market Con centra t ion : Fair and handsome

Selectiv e Specialization : Toyota, Sony Ericsson,Artisti, British American Tobacco.

Produ ct Specia l iza t ion : Boi Mela

Market Specialization : Johnson & Johnson, MenzPlanet, Dressey Dale,

Full Market Coverage : Coca Cola, Dhaka NewMarket.


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Additional Considerations in evaluating and selecting segments: 1. Segm ent by Segm ent invas ionplan:

A company would be wise to enter onesegment at a time. Figure shows threecomputer companies A, B & C areselling computer to three industries. Asuitable invasion approach made bycompany C is shown by the arrow.

2. Updat ing Segm entation Schem es:

Air line example

Consumer behavior and buying preferences with in a segment is changing continuously.Marketer must aware of the changes and analysis must be done periodically to cope upthe changes.

3. Ethical Choice of Market targets :

Selecting and activating the target market should not generate public controversy.

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Marketing Management 5 - Identifying Market Segments and Target_print version.pdf