I. Market Segmentation, TARGETING &

Marketing Management-1
SEGMENTATION,
SEGMENTATION
TARGETING &
POSITIONING
Market Segmentation
Market Segmentation is the process of
sub-dividing of customers into
homogenous sub-sets having similar
needs, wants, or demand
characteristics and can be reached with
distinct Marketing Mix.
MM 2016/STP, Demand Forecasting
Narrowing down to Focus on a Target Market
Broad generic market

Broad product market
Specific market
segment(s)
Target
Segment(s)
Examples of Generic Markets, Relevant Customer

Needs, and Specific Product-Markets
Generic
Generic markets
markets
and
and potential
potential needs
needs
1. Need for
transportatio
n
2. Capture
images
Relevant
Relevant productproducttypes
types for
for some
some
broad
broad productproductmarkets
markets
Some
Some specific
specific
brands
brands within
within
narrower
narrower
submarkets
submarkets
1. Train,
2. Automobile
Car model
3. -Photography,
Kodak, Nikon

4
Evaluating Market Segments
Homogeneous
Within
Heterogeneous
Between
Criteria
Criteria for
for
Good
Good
Segments
Segments
Operational
Substantial
Requirements for Effective

Segmentation
A good market segment must be:
1. Measurable
The size, purchasing power, and
profiles of the segments

Segmentation
2. Accessible
The market can be effectively
reached and served

Segmentation
3. Substantial
The markets are large and
profitable enough to serve

Segmentation
4. Differentiable
The markets are distinguishable
and respond differently to
marketing mix elements and
programs

Segmentation
5. Actionable
Effective programs can be
designed for attracting and
serving the segments
10
Segmentation Dimensions for Consumer Markets
11
Demographic Segmentation
The most popular segmentation method
because consumer needs, wants, and
usage often vary closely with demographic
variables and are easier to measure than
other types of variables
12
Age and life-cycle stage

Segmentation
The process of offering different products
or using different marketing approaches for
different age
and life-cycle groups
13
Psychographic Segmentation
Divides buyers into different groups
based on:
Social class
Lifestyle, or
Personality traits
14
Behavioral Segmentation
Divides buyers into groups based on their
knowledge, attitudes, uses, or responses to
a product
Occasion
Benefits sought
User status
Usage rate
Loyalty status
15
Other Segmentation Methods

Occasion segmentation
Divides buyers into groups according to
occasions when they get the idea to buy,
actually make purchases, or respond to a
product
Benefit segmentation
Finding the major benefits people look for in
the product class, the kinds of people who look
for each benefit, and the major brands that
deliver each benefit
16

User status divides buyers into exusers, potential users, first-time
users, and regular users of a
product
Usage rate divides buyers into light,
medium, and heavy product users
Loyalty status divides buyers into
groups according to their degree of
loyalty
17

Multiple segmentation
is used to identify smaller, betterdefined target groups
Geo-demographic
segmentation
is an example of multivariable
segmentation that divides groups
into consumer lifestyle patterns
18
Segmenting International
Markets
Geographic location
Economic factors
Political and legal factors
Cultural factors
19
Segmenting International
Markets
Inter-market segmentation divides
consumers into groups with similar
needs and buying behaviors even
though they are located in different
countries
20
Segmentation Dimensions for

Business/Organizational Markets
Kind of
Relationship
Purchasing
Method
Type of
Customer
Possible
Segmentation
Dimensions
Buying Situation
Demographics
Product Use
21
Segmenting Product Markets
Name Broad ProductMarket

List Customer Needs
Narrow Product-Markets
Identify
Determining Dimensions
Process
for
Segmenting
Product-Markets
Name Possible
Market segments
Evaluate Segments
Estimate
EstimateSize
Size
22
SEGMENTING, TARGETING &

POSITIONING
TARGETING
23
1.
Segment size and growth

Smaller versus larger segments
Growth potential
24
2.
Segment structural
attractiveness
Competition
Substitute products
Power of buyers
Power of suppliers
25
3.
Company objectives and resources

Competitive advantage
Availability of resources
Consistent with company objectives
26
FOUR GENERAL
GUIDELINES IN TARGETING:
Target markets should be compatible with

the organizations goals and images.
The market opportunity must match the

companys resources.
The company should seek markets that

will generate profits.
Markets should be sought where the

number and size of competitors are
minimal.
27
STEPS IN THE SEGMENTATION-TARGETING

PROCESS
28
The Competitive Environment
Competitor
analysis
Competitive
rivals
Key Areas
to Consider
Competitive
barriers
29
Targeting
Undifferentiated targeting
Multi-segment targeting
Concentrated targeting
Niche Marketing
Micro-Marketing :
Treating each customer as a different
segment
30
Socially Responsible Target

Marketing
Benefits customers with specific needs
Concern for vulnerable segments
Children
Alcohol
Cigarettes
Drugs
31
Choosing a Targeting Strategy

Depends on:
Company resources
Product variability
Product life-cycle stage
Market variability
Competitors marketing
strategies
32
Developing Market-Oriented
Strategies in Broad Product-Markets
Single Target
Market Approach
The
Strategy
This approach segments

the market and picks one
of the homogeneous
segments as the firm's
target market.
The segmenter here

aims at one
submarket with
one marketing mix.
33
Single Target
Market Approach
Multiple Target
Market Approach
Strategy
1
This approach segments the market
and chooses two or more
segments as the firm's target market.
The segmenter here aims at two or
more submarkets with a different
marketing mix for each.
Strategy
3
Strategy
2
34
Single Target
Market Approach
Multiple Target
Market Approach
The Strategy
The marketer here aims
at two submarkets with
one marketing mix.
Combined Target
Market Approach
This approach combines

two or more submarkets into
a larger target market as a
basis for one strategy.
35
Market Aggregation
The marketing of standardized goods
and services to a large population of
people that have similar needs.
Another name for market aggregation
is "mass marketing," a strategy that
treats all customers as a single group
that is handled homogeneously.
36
Market Aggregation
Market aggregation reduces production
and marketing costs, thereby reducing
costs to consumers.
Product differentiation by branding
Mass Marketing
Compare with
Undifferentiated marketing
Mass Customization
37
Aggregation of Demand
Analyzing historical purchasing data to provide the
management information necessary to assess purchasing
practices and trends
Drawing together information on common or similar
current or future requirements within an organization, and
with other organizations
Assessing the potential for collaborating with other business
units within an organization, or with other organizations, and
agreeing to present these requirements in a coordinated way
to the market.
38
Product Positioning
The decisions and activities that create and

maintain a certain concept of the firms
products in customers minds.
39
Positioning
Positioning is the perception or the image
that customers have of the company and its
products
Responsibility of the company to manage
its customers perceptions
Every fact and act of the company shapes
customer perceptions directly or indirectly
Company should evaluate every activity in
terms of its role in creating positive
customer perceptions
40
Positioning
Communicating the differential
advantage to customers
Product differentiation
Promotional differentiation
Distribution differentiation
Price differentiation
41
CRITERIA FOR SUCCESSFUL

POSITIONING
Clarity
Consistency
Credibility
Competitiveness
42
COMMON POSITIONING STRATEGIES IN

THE CONSUMER DURABLE SECTOR
Benefit or use positioning:
The positioning strategies adopted by
consumer durable companies depend a
lot on usage, economy and corporate
identity of which a well established
brand surely projects the identity of the
product in terms of which corporate
house the product is from
43

Competitor related positioning:
This is the strategy of placing a firms
brand next to the leader in the market
and trying to uproot it on a specific
tangible variable
Lifestyle positioning:
A firm could even position the brand as a
lifestyle contemporary or futuristic .
44

Positioning by Corporate Identity:
This type of positing is seen very much
with consumer durables when a tried
and trusted corporate identity
45

Surrogate positioning:
Here the product cant be positioned
differently on the basis of attributes but
differentiated by positioning them on
the surrogates for the attributes.
The two most popular surrogates are nonpareil (our
product is simply the best available, no features or
benefits cited) and parentage (our product is good
because it was designed by the designers or producers
of product X)
46
Sine qua non of Positioning

o
o
o
o
o
o
o
Precision,
Defined Target audience,
Differentiate,
Reflect organizational values,
Address customer needs,
Specific,
Ability to deliver the promise/s
47
REPOSITIONING
Same product and target market,
change
in the image of the product
Product repositioning
Intangible repositioning
Tangible repositioning
Chandrika Soap from skin cure to skin
care
48
Four Major Positioning Errors

1. Under positioning
consumers have only a vague idea of the
brand.
2. Over positioning
consumers have too narrow a view of the
brand.
3. Confused Positioning
consumers confused about the brand due to
frequent changes or too many claims.
4. Doubtful Positioning
consumers dont believe the brands claims
49
Product Space Positioning for Bar Soaps

High moisturizing
Dove
Lux
Nondeodorant
Deodorant
Lifebuoy
Low
moisturizing
50
Product Space Positioning for Tooth Paste
High/Low:
Whitening
Foaming
Mouth Freshening
Medicinal 51
Demand Forecasting
52
DEMAND FORECASTING AND

ESTIMATING SALES OF A PRODUCT
A sales forecast is an estimate of probable
sales for one companys brand of the product
during a stated time period in a specific market
segment and assuming the use of a
predetermined marketing plan.
Planning and scheduling production
Acquiring inputs
Making provision for finances
Formulating pricing strategy
Planning advertisement
53
DEMAND FORECASTING AND

ESTIMATING SALES OF A PRODUCT
A sales forecast
- Is based on a specific marketing plan.
Can be expressed in Rupees or product units.

Normally prepared after market potential and sales
potential have been estimated.
Normally made on annual basis.
Marketing goals and broad strategies must be
established before a sales forecast is made.
A key controlling factor in all operational planning
throughout the company.
54
TWO BASIC PROCEDURES USED TO

FORECAST SALES ..1
A top-down approach in which management:
Develops a forecast of economic conditions and
industry trends.
Determines the market potential for a product.
Determines the sales potential for the product.
Measures the share of this market the firm is
currently getting or plans to capture.
Forecasts the firms sales of the product.
55
TWO BASIC PROCEDURES USED TO

FORECAST SALES ..2
A bottom-up approach in which management:
Generates estimates of future demand from
customers or the companys salespeople.
Combines the estimates to get a total
forecast.
Adjusts the forecast based on managerial
insights into the industry, competition, and
general economic trends.
56
Demand Forecasting Techniques
Market-factor analysis
Demand for a product is assumed to be
related to the behavior of certain sales
activity.
57

Survey of buyer intentions
A sample of current or potential customers
are asked how much of a particular
product they would buy at a given price
during a specified future time period.
58

Test marketing
A firm markets its product in a limited
geographic area, measures sales, and then
projects the companys sales over a larger
area.
59

Past sales and trend analysis
A flat percentage increase is applied to
the volume achieved last year or to the
average volume of the past few years.
60

Sales-force composite
A bottom-up method consisting of

collecting estimates of sales for the future
period from all salespeople.
61

Executive judgment
Obtaining opinions regarding future sales
volume from one or more executives.
62

Delphi Method
Expert opinions collected independently and
analyzed
63
Survey Methods
Consumer Survey:
Direct Interview
Complete
Enumeratio
n
Sample
Survey
Sample
Survey
Method
Opinion Poll
Methods
EndUse
method
Expert
opinion
Delphi
Method
Market Studies &

Experiments
Market
Test
Laboratory
Tests
64
Statistical Methods
Trend
Projection
Barometri
c Methods
Econometri
c Method
Lead-Lag
indicators
Diffusion
indices
Regression
Methods
Simple:
Bivariate
Graphical
Method
Trend fitting or least

Square method
Simultaneo
us
Equations
Multivariate
Box- Jenkins
Method
65
Demand Forecasting
66
The External Environment Affects Marketing Opportunities
Cultural
Culturaland
andsocial
social
Economic
Economic
Dimensions
of the
External
Environment
Technology
Technology
Political
& Legal
Environmental
Environmental
67

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I. Market Segmentation, TARGETING &amp;

Încărcat de

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Formate disponibile

Marketing Management-1

MM 2016/STP, Demand Forecasting

Narrowing down to Focus on a Target Market

Broad generic market

Examples of Generic Markets, Relevant Customer

MM 2016/STP, Demand Forecasting

Evaluating Market Segments

MM 2016/STP, Demand Forecasting

Requirements for Effective

MM 2016/STP, Demand Forecasting

Requirements for Effective

MM 2016/STP, Demand Forecasting

Requirements for Effective

MM 2016/STP, Demand Forecasting

Requirements for Effective

MM 2016/STP, Demand Forecasting

Requirements for Effective

MM 2016/STP, Demand Forecasting

Segmentation Dimensions for Consumer Markets

MM 2016/STP, Demand Forecasting

MM 2016/STP, Demand Forecasting

Age and life-cycle stage

and life-cycle groups

MM 2016/STP, Demand Forecasting

MM 2016/STP, Demand Forecasting

MM 2016/STP, Demand Forecasting

Other Segmentation Methods

Other Segmentation Methods

Other Segmentation Methods

is used to identify smaller, betterdefined target groups

MM 2016/STP, Demand Forecasting

MM 2016/STP, Demand Forecasting

Segmentation Dimensions for

MM 2016/STP, Demand Forecasting

Segmenting Product Markets

Name Broad ProductMarket

SEGMENTING, TARGETING &

MM 2016/STP, Demand Forecasting

Evaluating Market Segments

Segment size and growth

MM 2016/STP, Demand Forecasting

Evaluating Market Segments

Evaluating Market Segments

Company objectives and resources

MM 2016/STP, Demand Forecasting

Target markets should be compatible with

The market opportunity must match the

The company should seek markets that

Markets should be sought where the

STEPS IN THE SEGMENTATION-TARGETING

MM 2016/STP, Demand Forecasting

The Competitive Environment

MM 2016/STP, Demand Forecasting

Socially Responsible Target

MM 2016/STP, Demand Forecasting

Choosing a Targeting Strategy

Product life-cycle stage

MM 2016/STP, Demand Forecasting

This approach segments

The segmenter here

MM 2016/STP, Demand Forecasting

MM 2016/STP, Demand Forecasting

This approach combines

MM 2016/STP, Demand Forecasting

I. Market Segmentation, TARGETING &

I. Market Segmentation, TARGETING &