Mrke Ting Project

7/30/2019 Mrke Ting Project

1/13

BM-201

Market Segmentation

Submitted by:

NITIN GUPTA 11114025

NITISH SHARMA 11114026

PRATEEK THAKUR 11114029

SHUBHAM KANSAL 11114043


2/13

TABLE OF CONTENTS

1. Objectives2. Introduction

a. What is a market?b. What is market segmentation?c. Concept of Market Segmentation

3. Need for Market Segmentation4. Target marketing

Advantages and Disadvantages

5. Target Market Selection6. Levels of Market Segmentation

Mass->Niche->Local->Individual

7. Segmenting Consumer Marketsa. Geographical Segmentationb. Demographic Segmentationc. Psychographic Segmentationd. Usage Segmentation

8. Positioning Strategy9. Segmenting Business Markets

Less potential customers

10.Conclusion

11.References


3/13

Objectives:

1. Understand the concepts: market, segmentation, and target markets

2. Learn the advantages and disadvantages of target marketing

3. Explain the steps in target market selection

4. Discuss segmentation criteria, strategies, bases, and information sources

5. Understand market profiling and positioning strategies

What is a market?

Individuals or organizations who:

Are willing, able, and capable of purchasing a firms product Segmentation is critical because demand is often heterogeneous

What is market segmentation?

Market Segmentation is a method of dividing a market (Large) into smaller

groupings of consumers or organisations in which each segment has a common

characteristic such as needs or behaviour.

According to Philip kotler , Market segmentation is sub-dividing a market into

distinct and homogeneous subgroups of customers, where any group can

conceivably be selected as a target market to be met with distinct marketing mix.

Concept of Market Segmentation:

The concept of market segment is based on the fact that the market of

commodities are not homogeneous but they are heterogeneous. Market represent a

group of customer having common characteristics but two customer are never

common in their nature, habits, hobbies income and purchasing techniques.


4/13

Henry Ford epitomized this approach by making Ford Model T in black color:

Need for market Segmentation

Why is there a need formarket segmentation? Simply because according tothe marketing

conceptby Philip Kotler, understanding customers and satisfying their needs better than

the competition is the priority of an organisation. But different customers have different

needs, and it is rarely possible to satisfy all customers by treating them alike. Thus there

is a need for Market Segmentation.
http://www.marketing91.com/market-segmentation/http://www.marketing91.com/market-segmentation/http://www.marketing91.com/market-segmentation/http://www.marketing91.com/marketing-concept/http://www.marketing91.com/marketing-concept/http://www.marketing91.com/marketing-concept/http://www.marketing91.com/marketing-concept/http://www.marketing91.com/marketing-concept/http://www.marketing91.com/marketing-concept/http://www.marketing91.com/market-segmentation/


5/13

Advantages of target marketing:

Easier analysis of potential and actual consumers

Tailoring of products to market

Assessment of demand potential

Identify competing products

Increased sales effectiveness and cost efficiencies

Product positioning and easy identification of opportunities

Disadvantages of Target Marketing

Increased marketing costs

Personalization can become burdensome to manage

Faux segmentation may be viewed cynically

Narrow segmentation can impact brand loyalty

Tarket Marget Selection:

Identitfy Total

Market

Determine Need for

Segmentation

Determine Bases

for Segmentation

Profile Each

Selected Segment

Assess Potential

Profitibility of

Segment and Select

Target Segment

Select Positioning

Strategy

Develop and

Implement

Appropriate

Marketing Mix

Monitor, Evaluate

and Control


6/13

Levels of Market Segmentation

I. Mass Marketing:Mass marketingrefers to treatment of the market as a homogenous group and

offering the same marketing mix to all customers. Mass marketing allows

economies of scale to be realized through mass production and mass distribution.

Thus is the principles of Market Segmentations are not applied, the firms ignore the

differing customer needs and another firm would likely enter the market with aproduct that serves a specific group, and the incumbent firms would lose the

customers. Example Ford-T model.

II. Niche Marketing:A niche market refers to a small, tightly defined group of consumers or households

that share certain demographic, attitudinal or behavioural characteristics.

An example of a niche market would be people seeking Gothic styled wedding

dresses.

Other examples, sports channels likeSTAR Sports,ESPN,STAR Cricket,

andFoxtarget a niche of sports lovers, Rolls Royceis a luxury car made for elite

section of the society.

III. Local MarketingA local market refers to a group of consumers or households that reside within a

defined geographic area and fall within the normal catchment area for a specific

business. For instance, the catchment area for a pharmacy would normally be

approximately 5 km radius of the pharmacy's address.

Ex. Spiderman 3was released in 5 different language in India including bhojpuri.

SEGMENTATION

Mass Marketing Niches Local Individual
http://www.marketing91.com/mass-marketing/http://www.marketing91.com/mass-marketing/http://en.wikipedia.org/wiki/STAR_Sportshttp://en.wikipedia.org/wiki/STAR_Sportshttp://en.wikipedia.org/wiki/STAR_Sportshttp://en.wikipedia.org/wiki/ESPNhttp://en.wikipedia.org/wiki/ESPNhttp://en.wikipedia.org/wiki/ESPNhttp://en.wikipedia.org/wiki/STAR_Crickethttp://en.wikipedia.org/wiki/STAR_Crickethttp://en.wikipedia.org/wiki/STAR_Crickethttp://en.wikipedia.org/wiki/Fox_Broadcasting_Companyhttp://en.wikipedia.org/wiki/Fox_Broadcasting_Companyhttp://en.wikipedia.org/wiki/Fox_Broadcasting_Companyhttp://en.wikipedia.org/wiki/Fox_Broadcasting_Companyhttp://en.wikipedia.org/wiki/STAR_Crickethttp://en.wikipedia.org/wiki/ESPNhttp://en.wikipedia.org/wiki/STAR_Sportshttp://www.marketing91.com/mass-marketing/


7/13

IV. Individual MarketingPersonalized marketing (also calledpersonalization, and sometimes called one-to-

one marketing) is an extreme form ofproduct differentiation. Whereas product

differentiation tries to differentiate a product from competing ones,

personalization tries to make a uniqueproduct offeringfor each customer.

Ex. Dell offers customization of its laptops for all the customers.

Segmenting Consumer Markets

Geographic

Demographic

Psychographic

Usage
http://en.wikipedia.org/wiki/Personalizationhttp://en.wikipedia.org/wiki/Personalizationhttp://en.wikipedia.org/wiki/Personalizationhttp://en.wikipedia.org/wiki/Product_differentiationhttp://en.wikipedia.org/wiki/Product_differentiationhttp://en.wikipedia.org/wiki/Product_differentiationhttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Product_differentiationhttp://en.wikipedia.org/wiki/Personalization


8/13

Geographic Segmentation

Divide the market into different group based on:

Region South India , North , Western Region, East City metro cities, cities with population more than 1 million World Density Climate States

Ex.- Mcdonalds globally, sell burgers aimed at local markets, for example, burgers are

made from lamb in India rather than beefbecause of religious issues. In Mexico morechilli sauce is added and so on.


9/13

Demographic Segmentation

Bank Al Habib targets senior citizens

Dove Targets Women

Demographic Segmentation is division of Market on the basis of-

Age Gender Income Lifecycle Ethnicity

1. Age-As people age their needs and wants change, some organisations develop specific productsaimed at particular age groupsFor example- nappies for babies, toys for children, clothes for teenagers and so on.

2. Gender- Gender segmentation is commonly used within the cosmetics, clothing and magazineindustry.

For example-In the UK we have also seen the introduction of Maxim, a male lifestyle magazine

covering male fashion, films, cars, sports and technology.

3. Income- Income segmentation is another strategy used by many organisations. In today's globallycompetitive environment brands are specifically developed and positioned within particular income

segments inorder to maximize turnover.

Example- Stores like Harrods, Harvey Nicohals are predominantly aimed at the affluent market.

Daewoo aim their vehicles at price sensitive buyers who require a bundle of benefits for the price.


10/13

Psychographic /Behavioural Segmentation

Psychographic segmentation is sometimes also referred to as behavioural segmentation.

This type of segmentation divides the market into groups according to customers lifestyles.

It considers a number of potential influences on buying behaviour, including the attitudes, expectationsand activities of consumers. If these are known, then products and marketing campaigns can be customisedso that they appeal more specifically to customer motivations.

The main types of psychographic segmentation are:

A. Lifestyle different people have different lifestyle patterns and our behaviour may change as wepass through different stages of life. For example, a family with young children is likely to have adifferent lifestyle to a much older couple whose children have left home.

B. Opinions, interests and hobbies this covers a huge area and includes consumers politicalopinions, views on the environment, sporting and recreational activities and arts and culturalissues. Good recent examples include the growth of demand for organic foods or products that are(or are perceivedto be) environmentally friendly.

C. Degree of loyalty customers who buy one brand either all or most of the time are valuable tofirms. By segmenting markets in this way, firms can adapt their marketing in order to retain loyalcustomers, rather than having to focus constantly on recruiting new customers.

D. Occasions this segments on the basis ofwhen a product is purchased or consumed. Marketersoften try to change customer perception of the best time to consumer a product by promotingalternative uses for a product. For example, recently Kelloggs has attempted to change the imageof cereals to that of an any time snack, rather than simply a breakfast meal.

E. Benefits sought this requires marketers to identify and understand the main benefits consumerslook for in a product. Toothpaste, for example, is not only bought to maintain healthy teeth andgums, but also because of its taste and in order to help combat bad breath!


11/13

Usage Segmentation

Markets can be segmented by how often or how heavily consumers use a specific product

80/20 Principle - 80% of revenue generated by 20% of customers

Usage segmentation can take a number of directions. For example, the marketer maywant to identify various segments of users for a particular product category or users of thecompanys brand. In other cases, one may want to segment users into those who buyfrequently versus those who only buy occasionally (either product or brand), or into thoseusers who usually purchase just one brand versus those who switch from brand to brand. Itmay also be useful for the marketer to understand how segments how segments arisebased on different product usage situations. Ay usage segmentation approach needs tospecify the relevant dimensions of interest.

Positioning Strategy

Differentiation through:

Product attributes - characteristics as a positioning base Product usage - positioning based on a products typical use Symbol - use of a symbol or icon to position a product in the consumer

consciousness

Price/quality - emphasize value in terms of quality, price, or both Product user - the typical user of a product Product class - positioning against another type of product or product class Competition - comparisons to a products competition (directly or indirectly)

Heavy Users

20%

Light Users

80%


12/13

Segmenting Business Markets

The approach to business market segmentation is conceptually similar to the approach for

consumer markets. As we know, while business markets have less potential customers (as

opposed to consumer markets), B2B firms still need to be selective when determining

their strategic approach to the market. This is because it is common for a B2B firm to have

substantial investment costs and will often need to implement labour-intensive

promotional strategies.

I. DemographicsIndustry size, growth potential, etc.

II. Operating CharacteristicsTechnology, brand-user status, etc.

III. Purchasing ApproachesPurchasing policies, size of orders, etc.

IV. Product Use or Usage SituationThe way the product will be used and customer service levels required

V. Situational FactorsUrgency, special product uses

VI. Buyers Personal CharacteristicsWomen employed outside the house


13/13

Conclusion

In this report we have identified the underlying principle of market segmentation. It then

looks at the segmentation process and the variables that can be used for groupingcustomers in consumer and business markets. Segmentation analysis, targeting, and

positioning are then reviewed. Segmentation is discussed with a view to obtaining the

most from it.

References

http://www.citeman.com/7790-usage-segmentation.html

http://wiki.answers.com/Q/The_difference_between_a_local_and_a_niche_market

http://www.managementstudyguide.com/target-marketing.htm

http://smallbusiness.chron.com/discuss-difference-between-market-segmentation-target-

marketing-1480.html

http://en.wikipedia.org/wiki/Niche_market

http://en.wikipedia.org/wiki/Market_segmentation
http://www.citeman.com/7790-usage-segmentation.htmlhttp://www.citeman.com/7790-usage-segmentation.htmlhttp://wiki.answers.com/Q/The_difference_between_a_local_and_a_niche_markethttp://wiki.answers.com/Q/The_difference_between_a_local_and_a_niche_markethttp://www.managementstudyguide.com/target-marketing.htmhttp://www.managementstudyguide.com/target-marketing.htmhttp://smallbusiness.chron.com/discuss-difference-between-market-segmentation-target-marketing-1480.htmlhttp://smallbusiness.chron.com/discuss-difference-between-market-segmentation-target-marketing-1480.htmlhttp://smallbusiness.chron.com/discuss-difference-between-market-segmentation-target-marketing-1480.htmlhttp://en.wikipedia.org/wiki/Niche_markethttp://en.wikipedia.org/wiki/Niche_markethttp://en.wikipedia.org/wiki/Market_segmentationhttp://en.wikipedia.org/wiki/Market_segmentationhttp://en.wikipedia.org/wiki/Market_segmentationhttp://en.wikipedia.org/wiki/Niche_markethttp://smallbusiness.chron.com/discuss-difference-between-market-segmentation-target-marketing-1480.htmlhttp://smallbusiness.chron.com/discuss-difference-between-market-segmentation-target-marketing-1480.htmlhttp://www.managementstudyguide.com/target-marketing.htmhttp://wiki.answers.com/Q/The_difference_between_a_local_and_a_niche_markethttp://www.citeman.com/7790-usage-segmentation.html

Documents

Mrke Ting Project