Segmentation - Preethi

7/31/2019 Segmentation - Preethi

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MARKET SEGMENTATION

According to Stanton, as the process

of taking the total hetrogeneous

market for a product and dividing it

into several submarkets orsegments, each of wich tends to be

homogeneous in full significant

aspects.

According to R.S.Darvar, Grouping ofbuyers or segmenting the market isdescribed as market segmentation.


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Mass marketing-Treating market as

homogeneous group

The marketer is in a better position to find out and compare the

marketing potentialities of his products in each segment.

Target marketi

ng-Recognizing diversityof customers

NEED FOR MARKET SEGMENTATION

NEED FOR MARKET SEGMENTATION

It helps in determining the strength or weakness of the marketing strategies.It helps the producer to face the competition of his rivals effectively.

It is on the basis of market segmentation that marketing budget is

adjusted for particular region or locality.


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The organization could allocate and appropriate its efforts in most useful

manner.

It helps in determining the kinds of promotional devices that are effective and

also helps to evalute their results.

It is often difficult to increase prices for the whole market. Nevertheless, it is

possible to develop premium segments in which customers accept a higher

price level. Such segments could be distinguished from the mass market by

features like additional services, exclusive points of sale, product variations

and the like.

By segmenting markets, organizations can create their own niche products

and thus attract additional customer groups

Customers change their preferences and patterns of behavior over time.

Organizations that serve different segments along a customers life cycle can

guide their customers from stage to stage by always offering them a specialsolution for their particular needs.

For example, many car manufacturers offer a product range that caters for

the needs of all phases of a customer life cycle: first car for early twens, fun-

car for young professionals, family car for young families, etc. Skin care

cosmetics brands often offer special series for babies, teens, normal skin, and

elder skin.


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It is possible to satisfy a variety of customer needs with a limited product

range by using different forms, bundles, incentives and promotional activities.

Eg:-The computer manufacturer Dell, for instance, does not organize its

website by product groups (desktops, notebooks, servers, printers etc), but by

customer groups (privates, small businesses, large businesses, public/state

organizations). They offer the same products to all customer groups.

Nevertheless, they suggest product bundles and supporting services that are

individually tailored for the needs of each particular group. As an example,

Dell offers to take on all IT-administration for companies. This service

provides a huge potential for savings for corporate customers. However, itwould be absolutely useless for private customers. Thus, segment-specific

product bundles increase chances for cross selling.

Suspects

Prospects

Suspects

Customers

AdvocateSupporter

Suspects

Partner

Clients


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CRITERIA FOR SEGMENTATION

MEASURABILITY

ACCESSIBILITY

MARKET RESPONSIVENESS

EFFECTIVE DEMAND

ADEQUATE POTENTIAL

ACTIONABILITY


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CRITERIA FOR SEGMENTATION

A single company cannot cover an entire market.hence, it has to select few market segments whichwill suit its products. the conditions essential forsuccessful market segmentation are:

MEASURABILITY:

The segment market characteristics.

Measurable: non-measurable:

Demographic . Psychological

Socio economic eg:perception


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ACCESSIBILITY:

The segment which is identified must be accessible.

Distribution

Market

Communication

MARKET RESPONSIVENESS:

The identified market must respond favorably to the marketing

efforts. market is segmented on the basis of normal reaction of

members to price change.


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EFFECTIVE DEMAND:

The segment must have sufficient buying power.the

buyer in this segment should have the willingness as

well as ability to purchase.when the purchasing power

is adequate,even a segment with less buyers will prove

to be profitable.

ADEQUATE POTENTIAL:

Marketers should develop programnes for substantial

segments.

The ability to measure the intensity of need.

Strength of purchasing power.

ACTIONABILITY: marketer should determine their

own ability of implementing the market programmes.


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BASIS FOR MARKET SEGMENTATION

M A R K E T S E G M E N T A T I O N

P s y c h o g r a p h

S o c i a l c l a

L i f e s t y l e

P e r s o n a l

D e m o g r a p h i

G e n d e r , a g e

I n c o m e

R e l i g i o n , R a

G e o g r a p h i c

P E O P L E O R I E

B r a n d / S t o

B e n e f i t p a

U s e p a t t e

P R O D U C T O R I

B A S I S F O R M A R
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PEOPLE ORIENTED APPROACH

GEOGRAPHIC SEGMENTATION

Geographic location is the usual and popular basis for

market segmentation.This divides the market on the basis

of urban and rural markets and is further divided into

nations,states,regions,countries and cities.

BREAKFAST IN DIFFERENT COUNTRIES
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DEMOGRAPHIC SEGMENTATION

This is the segmentation that is done on the basis of demographical

characteristics which is the study of the population.The demographical

characteristics are sex,age,marital status,number and age of children,place of

residence and mobility of a household.

BASED ON GENDER, AGE AND LIFE-CYCLE
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PSYCHOGRAPHIC SEGMENTATION

This is a basis of segmentation where buyers are divided into different

groups on the basis of social class lifestyle and personality characteristics.

UNDER SOCIAL CLASS

The upper Class

The middle class

The lower class

A survey on the following aspects of a consumer will help the seller

understand his target customer.

Interests

ActivitiesOpinions

Behavioral patterns

Habits

Lifestyle


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MARKETSEGMENTATION ON

THE BASIS OFPRODUCT

ORIENTEDAPPROACH


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INTRODUCTION

Product-benefitsegmentation is based on the perceived valueor advantage consumers receive from a good or service over

alternatives.

Markets can be partitioned in terms of the quality,performance, image, service, special features, or other benefits

prospective consumers seek. A wide spectrum of businessesfrom camera to shampoo to

athletic footwear to automobile marketersrely on this type ofsegmentation to match up with customers.

Many companies even market similar products of differentgrades or different accompanying services to different groupson the basis of product-benefit preference.


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WHY PRODUCT ORIENTED APPROACHIS THE BEST?

Although demographic, geographic, and organizationaldifferences enable marketers to narrow their opportunities, theyrarely provide enough specific information to make a decisionon dividing the market.

Psychographic data, operational lines, and, in particular,perceived consumer benefits and preferred business practicesare better at pinpointing buyer groupingsbut they must beconsidered against the broader background.

Thus, the key is to gather information on and considerallpertinent is product based segmentation.


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THREE ASPECTS

OF PRODUCT

ORIENTEDAPPROACH

USE PATTERN BENEFIT PATTERN STORE/BRANDLOYALTY


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STORE LOYALTY AS PRODUCTORIENTED APPROACH

Brand loyalty, in marketing, consists of a consumer'scommitment to repurchase or otherwise continue using the

brand and can be demonstrated by repeated buying of a productor service or other positive behaviors such as word of mouth

advocacy. Brand loyalty is more than simple repurchasing, however.

Customers may repurchase a brand due to situational constraints(such as vendor lock-in), a lack of viable alternatives, or out ofconvenience.

Such loyalty is referred to as "spurious loyalty". True brandloyalty exists when customers have a high relative attitudetoward the brand which is then exhibited through repurchase

behavior.
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BASIS FOR SEGMENTINGINDUSTRIAL MARKETS


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*DEMOGRAPHIC FACTORS

*OPERATING FACTORS

*PURCHASING APPORACH FACTOR

*SITUATIONAL FACTORS

*PERSONAL CHARACTERISTICS

D h V bl


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Demographic Segmentation Variables

Segmentation variables are basically factors which help the

organization to determine the target group. In demographicsegmentation, variables mainly consist of demographic

factors such as age, ethnicity, occupation etc. Below we have

given a list of demographic segmentation variables which are

commonly used to divide the market into smaller segments.

Age

Gender

Family size

Family life cycle

IncomeOccupation

Education

Nationality

Religion

Social standards


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Operating variables:

Company technology, product/brand use status, customer capabilities.

Purchasing approaches:

Purchasing function, power structure, buyer-seller

relationships, purchasing policies, purchasing criteria.

Situational factors:

Urgency of order, product application, size of order.

Buyers personal characteristics:

Within a chosen target industry

Within the chosen customer size


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SEGMENTATION PROCEDURE


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3 STRATEGIC OPTIONS

1.Unidentified marketing

2.Differentiated marketing

3.Concentrated marketing


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When it is not reliable,

organizations do not permit the

division of market into segments,

they conceive of the total marketconcept. No differentiation in

case of fully standardised

products and those with no

substitutes. Here, massadvertising is done. Eg: Coca

Cola.

UNIDENTIFIED MARKETING


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DIFFERENTIATED MARKETING

Here, a firm operates in all segments of the marketand devises separate marketing programmes.

Therefore, consumers demand is diversified. For

eg, cigarettes. Even though this method is sales-

oriented, it is quite costly for the organization.


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CONCENTRATED MARKETING

Here, instead of spreadingitself thin in many parts of the

market, it concentrates its

forces to gain a good market

position in a few areas. This isnormally adopted when new

products are introduced in the

market and test marketing is

conducted. The principleinvolved is specialization in

markets. Also, one segment is

never off-set by the other.

MARKET SEGMENTATION OF VIDEOCON COMPANY


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S G O O V OCO CO

A BRIEF INTRODUCTION

The Videocon group has an annual turnover of US$ 2 billion, making it one of the largest

consumer electronic and home appliance companies in India. Since 1998, it has expanded its

operations globally, especially in the Middle East.

Today the group operates through six key sectors:

Consumer electronics

In India the group sells consumer products like Colour Televisions, Washing Machines, Air

Conditioners, Refrigerators, Microwave ovens and many other home appliances, selling them

through a Multi-Brand strategy with the largest sales and service network in India. Videocon

Group brands include Akai, Electrolux, Hyundai, Kelvinator, Kenstar, Kenwood, Next,

PlanetM, Sansui, Toshibha, Philips (TV Products) etc.VIDEOCON PRODUCTS

Consumer Electronics Home Appliances

Televisions

Refrigerators

VCD players

Washing Machines

Mobile Phones

Microwave Ovens

Audio Systems

Air Conditioners LCDs , LEDs


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Geographic Segmentation

In the colder regions sales of the refrigerators is much

less than the colder regions so geographic conditions

play a very vital role in product segmentation. Similarly

other products are influenced by the climatic conditions,

different locations and regions.

Demographic segmentation

This part of segmentation is done on the basis of age

.gender, income, family size income, etc.. For egthe Sale

of LCDs and LEDs depend upon income of the customer

and also sale of Air Conditioners also depend upon the

purchasing power of the customer.

Behavioral Segmentation

It totally depends upon the usage rate of the customer

and the loyalty of the customer towards the company. For

example washing machines shows the best example for

the consumer loyalty towards the videocon.Psychographic Segmentation

In this segment luxurious goods, personality and lifestyle

of the customer effects totally Goods like air conditioners

and plasma panels, home theaters are segmented

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Segmentation - Preethi