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Segmentation In Dynamic MarketsDr. S Ramesh Kumar

Professor of Marketing, Institute of Management, BangaloreUsefulness of analysing timestylesAnother advantage of an in-depth analysis of discretionary time with a database is to targetsegments based on the intensity of interest in a specific activity/service/product. Most of themarketing communication today on products/services aiming at the discretionary time ofconsumers is broadly projected in newspapers or television commercials. Hence they are likely toreach people who may have a low level of interest in the product/service advertised or they arelikely to be noticed by consumers who are interested in leisure category (in general) and hence

are likely to compete with different categories, which belong to the leisure market. Research onthe intensity of interest can enable marketers to reach out to a focused target segment throughspecific media. This would result in higher percentage of consumers buying the product orservice. A premium hill resort package for example could be advertised on a niche channel likeDiscovery or National Geographic, as it is likely to make an impact on the target segment, whichis interested in Nature.

A response-generating direct marketing advertisement in a popular newspaper among a targetsegment could follow this up. A brand of mobile phone could have different price slabs fordiscretionary time to encourage users to connect with friends or relatives (the operational aspects

could be worked out based on the offer).Another advantage of an in-depth analysis of discretionary time with a database, is to

target segments based on the intensity of interest in a specific activity/service/product

Strengths of the companyWhile reaching out to different segments a company has to also take into consideration its ownstrengths. In the moulded-luggage market, around fifty per cent of the market is in theunorganised sector and VIP has a very strong distribution network of around 12,000 outlets. Acompany like Samsonite (a global brand) has to build up a distribution network in India though itcould draw from a range of about 2000 items of its international product range. Hence Samsoniteis currently operating at the higher end of the moulded- luggage market.

Tiger from Britannia has been a major success at the lower end of the biscuit market as a large

percentage of the market lies at the lower end and the company has a very strong distributionnetwork, which would back up the positioning of the brand. Leading pen brands like Reynolds,Parker and Luxor are launching offerings at the higher end of the market taking into considerationprofitability aspects and the intense price competition at the lower end of the market (below Rs l0a pen). Even a company like Hindustan Lever was able to counter the lower-end brand Nirmaonly after a few years (after the launch of Nirma). It launched Wheel as a brand for the lower endof the detergent market.

E-segmentsDigital economy has brought in another topical segment. The E-segment is one aspect that mostcompanies consider in todays context. As a distribution alternative, it is likely to complement thechannel structure of a company in an environment that is undergoing radical changes. Avon, theglobal brand in cosmetics, which operates in around 135 countries, has been using direct

personal selling for several decades (calling on the lady of the house). In several markets,because of environmental changes (double income households and concern of safety), it is todayusing the Internet to reach out to one cross-section of its segment. Brands could use e-commerceto reach consumers if the transaction involves a high degree of interaction between the companyand the consumer. Cosmetics, travel and hotel services are certain categories where e-commerce is likely to be useful to reach one cross-section of the target segment. Another aspect,which may be of interest to brands, is that any e-commerce should be targeted with the long-termorientation the brand should plan to cultivate the loyalty of the e-segment over a period of time.A small niche base of consumers may become loyal consumers in the category of jewellery if thee-store is able to provide designs and services that would win the interest and trust of the

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consumers.

Value orientation and meaningful positioningGood product ideas can create segments and help the pioneering firm to develop top- of-the-mind awareness in the respective product category. Good product ideas could include value interms of customer perception and features, which could lead to convenience and ease of usage.A brand of detergent suggesting a complex way of usage may not appeal to consumers in spite ofproduct improvements. Shampoos in sachets (apart from enlarging the market significantly) haveopened up a new segment (travelers) because of convenience. In todays context of convergenceof technologies, there is a distinctive need to analyse the benefits/needs of target segments. The

three-in-ones of yesteryear (which offered radio, tape recorder and record player in one device)and the watch-TV combination have been non-starters.

The communication refrigerator (by which one could use the refrigerator to access the Web) andapplications of blue-tooth technologies (by which several devices at home could be operatedthrough mobile devices) sound interesting but marketers have to be clear about drawing asegmentation plan for novelty seekers (who could be innovators), and consumers look forbenefits from such convergence products. In non-durables, there may be specific positioningslots, which may perhaps be vacant in the consumers mind, but these slots may not bemeaningful in terms of providing a differentiation in dynamic markets (which is going through

several variants and behavioural changes in the buying behavior). In the category of soaps, thereare a number of brands with variants and it is also a category where consumer loyalty is known to

be fickle. The positioning slot of family soap has to be clearly explained to the consumer if abrand chooses it for its proposition. Protex (from Colgate) launched a few years back does notseem to have made an impact on consumers and currently Godrej has launched a brand AllCare, based on the proposition. Crowning Glory (which has been re-launched recently) waspositioned as a soap for body and hair.

As there are a number of shampoo brands, which are already creating a clutter of propositions,there has to be a highly differentiated proposition for a consumer to buy soap for both body andhair especially at a price that is not in the economy range. Perhaps the brand could focus onspecific markets with a proposition of strong foam when used with hard water. But the brandname has to be a new one for such a strategy (in this case) so that past association of the brand

is not counter-productive.

Segmentation, targeting and positioning (STP) are dynamic concepts, which could providevaluable insights for marketers if used with planned research.