31/07/2010

Marketing Mix
Elements for Service
Amay Kothari

Introduction
y It is task of the marketing persons to prepare or plan
a programme in order to achieve the objectives of
the marketing company.
company
y The way to achieve the task is by preparing and
planning the policies in line with the customer
expectations.
y The process of understanding these customer needs
or requirements is greatly enhanced by targeting,
segmentation and positioning.
y There are basically three desirable alternatives for a
service organisation while selecting a target market
◦ Undifferentiated Market
◦ Differentiated Market
◦ Customisation

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Meaning of Market Segmentation

y Market segmentation means dividing the total
market for a product or service into different
parts// segments on certain basis and using each
segment fully for the purpose of marketing and
sales promotion.
y The buyer may differ in their wants, resources,
geographical locations, buying attitudes and buying
practices, these variables can be used to segment
the market.
y It studies needs and expectations of different
consumer groups and provide something for
everybody.

Features of market Segmentation

y Dividing the Total market
◦ Dividing the total market into small parts on
certain well – defined bases.
y Marketing objectives
◦ The aim is sales promotion, customer
satisfaction and achieving marketing objective
y Division into submarkets
◦ This will help in effective marketing

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Features of market Segmentation Contd.

y Rational segmentation
◦ It is useful for selectingg target
g markets and
promoting sales in that specific market by using
an appropriate combination of 4 Ps.
y Sales promotion
◦ It helps in introduction of suitable marketing mix
for each segment in order to promote sales in
each segment.
y Target strategy
◦ Market segmentation is better than market
aggregation.

Need for Market Segmentation

y Concentrating on a specific market
y To adjust the marketing mix as per the need and the
requirements.
requirements
y For the introduction of strategy of divide and conquer
y It acts as a base of present customer oriented
marketing philosophy.
y It is need as wants and desires of customer are not
uniform
y Different market segments have different price
perception
ti and d diff
differentt pricing
i i strategy.
t t
y Provides information regarding suitable timing for
advertising and sales promotion.
y It is needed as it facilitates the introduction of
appropriate marketing programs for each segment.

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Requirement of effective Market

Segmentation

y Heterogeneity of consumer
y Sustainability
y Accessibility
y Measurability
y Positive response
y Servicing the segment

Process of Market Segmentation in

Service
y Undifferentiated Marketing Approach
◦ Capturing mass market with a single package
◦ Mass distribution and mass promotion of one
product or service for all the buyers.
y Differentiated Marketing Approach
◦ In this service providers identifies separate
segment in thee market and develops separate
marketing mix.
y C
Concentrated
dMMarketing
k i Approach
A h
◦ In this the market segments but develops and
concentrates his efforts only on one or two
segments.

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Basis for Market Segmentation

y Demographic Segmentation
◦ Age and life – cycle stages
◦ Life stage
◦ Gender
◦ Income
◦ Generation

Basis for Market Segmentation

y Psychographic Segmentation
◦ Psychographic is the science of using
psychology and demographics to better
understand consumers.
◦ In this buyers are divided into different groups
on the basis of psychological / personality
traits, lifestyle, or values.
◦ People with the same demographic group can
exhibit very different psychographic profile.

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Basis for Market Segmentation

y Psychographic Segmentation
◦ Tendencies of the four ggroupp with higher
g
resources
x Innovators
x Thinkers
x Achievers
x Experiences
◦ Tendencies of the four ggroupp with low resources
x Believers
x Strivers
x Makers
x Survivors

Basis for Market Segmentation

y Geographic Segmentation
◦ It calls for dividing the market into different
geographical units such as nations, states,
region, cities etc.
◦ It identifies cultural groups, climatic difference,
resources combinations, demand – supply
gaps, religion and race.
◦ It provides the service organisations to
explore distinctive opportunities for product
development and product differentiation.

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Basis for Market Segmentation

y Behavioural Segmentation
◦ Behaviour variables – occasions,
occasions benefits,
benefits user
status, usage rate, loyalty status, buyer –
readiness stage, and attitude – are the best
starting points for constructing market
segments.

Behavioural Segmentation Contd.

y Occasions
◦ It can be defined in terms of the time of day,
day
week, month year, or in terms of other well –
defined temporal aspects of a consumer’s life.
◦ Buyers can be distinguished according to the
occasions when they develop a need, purchase
a product, or use a product.

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Behavioural Segmentation Contd.

y Benefits
◦ Buyers can be classified according to the
benefits they seek
◦ Five different benefit segments
x Road warrior – premium products and quality
service
x Generation F – fast fuel, fast service, and fast food
x True Blues – branded products and reliable service.
x Home bodies – convenience
x Price Shopper – low price.

Behavioural Segmentation Contd.

y User status
◦ Market can be segment into
x Non – users
x Ex – users
x Potential users
x First – time users and
x Regular users

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Behavioural Segmentation Contd.

y Usage Rate
◦ Market can be segmented into
x Light
x Medium and
x Heavy product user
◦ A potential problem, however, is that heavy
users often either are extremely loyal to one
brand, or never stay loyal to a brand and are
always looking for the lowest price.

Behavioural Segmentation Contd.

y Buyer – Readiness stage
◦ A market consists of people in different stages
of readiness to by a product.
x Some are unaware of the product
x Some are aware
x Some are informed
x Some are interested
x Some desire the product
x Some intend to buy

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Behavioural Segmentation Contd.

y Loyalty status
◦ Buyers can be divided into four groups
according to brand loyalty status
x Hard – Core loyals – Consumer who buy only one
brand all the time.
x Split loyals – Consumers who are loyal to two or
three brands
x Shifting loyals – Consumers who shift loyalty from
one brand to another
x Switchers – Consumers who show no loyalty to
any brand.

Behavioural Segmentation Contd.

y Attitude
◦ Five attitude groups can be found in a market
x Enthusiastic
x Positive
x Indifferent
x Negative and
x Hostile

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Technografic Segmentation
y Market for technology related services has
been on a tremendous rise.
y Marketers are trying to identify the
customers groups that have the willingness
as well as the ability to use the latest
technology.
y Consumer can be segmented on the
following variables
◦ Attitude towards the technology
◦ Application of technology and
◦ Financial position of the consumers

Steps in Segmentation Process

y Needs – based Segmentation
◦ Group customers into segments based on similar
needs
d and d bbenefits
fi sought
h bby customer in
i soling
li a
particular consumption problem.
y Segment Identification
◦ For each needs – based segment, determine
which demographics, lifestyle, and usage
behaviour make the segment distinct and
identifiable
y Segment Attractiveness
◦ Using predetermined segment attractiveness
criteria (such as market growth, competitive
intensity, and market access), determine the
overall attractiveness of each segment.

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Steps in Segmentation Process Contd.

y Segment profitability
◦ Determine segment profitability
y Segment Positioning
◦ For each segment, create a “value proportion” and
product – price positioning strategy based on that
segment’s unique customer needs and characteristics
y Segment “Acid Test”
◦ Create “segment
g storyboards”
y to test the
attractiveness of each segment ‘s positioning strategy
y Marketing – Mix Strategy
◦ Expand segment positioning strategy to include all
aspects of the marketing mix i.e. 4Ps

Effective Segmentation Criteria

y Market segments must rate favorably on
five key criteria.
criteria
◦ Measurable
◦ Substantial
◦ Accessible
◦ Differentiable
◦ Actionable

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Market Targeting
y Market targeting deals with evaluation the
attractiveness of the segment and selecting some
of the segments that the organisation would like
to serve.
y Segmentation is more of the analysis of the
customers, whereas targeting is a managerial
decision as to whom to serve among the various
identified segments.
y It is difficult for the organisation
g to recognise
g that
some identified market segments offer much
better opportunities compared to other.
y Because of this issue the concept of market
positioning evolved.

Evaluating and Selecting the Market

Segment
M1 M2 M3 M1 M2 M3 M1 M2 M3

P1 P1 P1

P2 P2 P2

P3 P3 P3

Single – Segment Selective Product

Concentration Specialisation Specialisation
M1 M2 M3 M1 M2 M3

P1 P1

P2 P2

P3 P3
Market Full Market
Specialisation Coverage

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Customisation
y The inherent characteristics of services
lead to customisation and could possibly
lead to segmentation at an individual’s
level.
y Service is difficult to standardise and that
the service provider to the other service
provider, form customer to another
customer, and from one period to
another.

Customisation Contd.
y Approaches towards mass customisation
◦ Customising the service around standard core
◦ Creating customisable service
◦ Offering point of delivery customisation
◦ Offering standard modules that can be
combined in unique ways

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Market Positioning
y It is concerned with the competitive differentiation
and is used to advantageously fir to the service
provider and its service to a market segment.
y It can be differentiate on the basis of subject
criteria like image and communication, or objective
criteria like the elements of the marketing mix.
y It is a strategic marketing tool that allows managers
t determine
to d t i the
th organisation’s
i ti ’ currentt position.
iti
y The key to a successful positioning strategy is to
promote the features which the service provider is
best in and which exactly matches the needs of the
service seeker.

Differentiation of Service
y Positioning offers the opportunity to
differentiate anyy service.
y Te service provider and his service occupy a
position and image in the service seeker’s
mind and this perception influences the
purchase decision made by the service
seeker
y Establishment of a position of value for the
service in the minds of the target market
through distinctive attributes assumes
greater importance to the service provider.

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Differentiation of Service Contd.

y The distinctive attribute must satisfy the
following criteria
◦ Importance
◦ Distinctiveness
◦ Communicability
◦ Superiority
◦ Affordability
◦ Profitability

Step in Developing A Positioning

Strategy
y Determining the levels of positioning
y Identification of key attributes of importance
to selected segments
y Location of attributes on a positioning map
y Evaluating positioning options
◦ Strengthening current position against
competitors
◦ Identifying an unoccupied market position
◦ Repositioning the competition
y Implementing positioning

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Positioning Strategies
y Service attribute
y Price positioning
y Quality positioning
y Competitive positioning
y Service application positioning
y Service benefits
y Leadership positioning
y Excellence positioning

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