A

SEMINAR REPORT
ON

SEGMENTING AND
TARGETING THE
MARKET
Submitted in partial fulfillment of the requirement for the degree of
MASTERS OF BUSINESS ADMINISTRATION
Session (2009-11)

SUBMITTED TO: - SUBMITTED BY:-

Ms. POOJA KAURA VINAY BANSAL
Lecturer, DIET M.B.A Ist Semester
ROLL NO.1439143

DOON VALLEY INSTITUTE OF ENGINEERING &

TECHNOLOGY, KARNAL
(APPROVED BY AICTE AND AFFILIATED TO KURUKSHETRA UNIVERSITY,
KURUKSHETRA)
 ACKNOWLEDGEMENT

In the completion of the project work, there is a feeling of satisfaction and in this moment
of happiness, I feel prompted to record my sincere gratitude for those who were a source
of inspiration, encouragement and guidance.
I am highly indebted to my guide Ms. POOJA KAURA, (Lecturer, Diet, Karnal), for her
valuable guidance and constant encouragement throughout the project work.
Finally it is an opportunity of immense pleasure to study under the guidance of highly
qualifies, dedicated and experienced faculty members of Doon Valley Institute of
Engineering & Technology (Karnal), the prestigious institution that has emerged as a
premier centre for excellence in MBA.

With great happiness and gratitude, I would also like to extend my sincere thanks to our
principal Mr. HARISH ABHICHANDANI and my mentor Mrs. MANISHA
TANWAR(H.O.D), for all their support and guidance.

VINAY BANSAL
 PREFACE

The purpose of this report is to study different market segmentation skills. Consumers
come into the market with their own unique set of preferences and resources. However,
from the perspective of both the researcher and marketer there are sufficient similarities
between individual consumers to warrant grouping them into “segments." These
similarities are not restricted to their demographic characteristics alone, they may include
motivations, values, lifestyles, the way in which consumers use products, their spending
patterns, purchase behavior, and so on. The definition of a consumer market segment is
"a relatively homogenous group of individuals whose motivations, product needs, and
purchase behaviors, are similar."

GOAL OF THE REPORT

The goal of the report is to provide a market segmentation framework for a specific
product market. The framework must include:

Identifying and naming two market segments within the market that is consumer and
industrial market which are studied on different bases separately. Study of different bases
helps marketer to choose best strategy according to his suitability and nature of product.
Fully analyzing each of these market segments following the targeting strategies.
Coming to some conclusions about the market attractiveness (profit potential) of each
segment, and market segments not being served in the current market environment which
potentially could be profitable.
 CONTENTS

 Acknowledgement
 Preface

Table of contents:
Sr.No. Topic Page No.
1. INTRODUCTION 1
2. NEED OF SEGMENTATION 4
3. OBJECTIVES 5
4. CRITERIA FOR EFFECTIVE
SEGMENTATION 6
4.1 SEGMENTING CONSUMER
MARKET 8
4.2 SEGMENTING INDUSTRIAL
MARKET

5. PRODUCT DIFFERENTIATION
AND MARKET SEGMENTATION
6. ADVANTAGES AND IMPORTANCE
OF SEGMENTATION
7. TARGETING
8. FACTORS TO BE CONSIDERED
9. TARGET MARKET STRATEGIES
10. HUL SEGMENTATION POLICY
11. MARKET SEGMENTATION OF TOSHIBA
12. MCDONALDS SEGMENTATION POLICY
SEGMENTATION
INTRODUCTION

SEGMENTATION:-

Market segmentation- is the process in marketing of dividing a market into distinct

subsets (segments) that behave in the same way or have similar needs. Because each
segment is fairly homogeneous in their needs and attitudes, they are likely to respond
similarly to a given marketing strategy. That is, they are likely to have similar feeling and
ideas about a marketing mix comprised of a given product or service, sold at a given
price, distributed in a certain way, and promoted in a certain way. Broadly, markets can
be divided according to a number of general criteria, such as by industry or public versus
private sector. Small segments are often termed niche markets or specialty markets.
However, all segments fall into either consumer or industrial markets. Market
segmentation is needed because the marketing concept calls for understanding customers
and satisfying their needs better than the competition. But different customers have
different needs, and it rarely is possible to satisfy all customers by treating them alike.
Buyers together make up markets. These buyers vary in numerous ways. These ways
include difference in their wants, acquiring ability, geographical sites, purchasing
behavior, and buying practices.
An example for how the market for soap may be segmented-
Types of Soap Characteristics of market segment
Beauty soap
E.g.: Dove, Lux, Camay

People who buy beauty soap will be people who want to keep their skin soft. They will
therefore buy soap which contains moisturizers. Women will mainly buy them.
Baby Soap
E.g.: Johnson’s baby Soap

This is a mild soap which will not harm a baby’s skin. It is bought mainly by mothers for
their babies.
Medicated soap
E.g.: Dettol, Lifebuoy

Sometimes soap is sold to help fight acne. This tends to be bought mainly by teenagers,
both male & female.
Non-branded soap

A Business market segment is a group of people or organizations sharing one or more

characteristics that cause them to have similar product or service needs. A true market
segment meets all of the following criteria: it is distinct from other segments (different
segments have different needs), it is homogeneous within the segment,it responds
similarly to a market stimulus, and it can be reached by a market intervention. The term is
also used when consumers with identical product and/or service needs are divided up into
groups so they can be charged different amounts. These can broadly be viewed as
'positive' and 'negative' applications of the same idea, splitting up the market into smaller
groups. Market segmenting is the process that a company divides the market into distinct
groups who have distinct needs, wants, behavior or who might want different products &
services.

The process of segmentation is distinct from targeting (choosing which segments to

address) and positioning (designing an appropriate marketing mix for each segment). The
overall motive is to identify groups of similar customers and potential customers; to
prioritize the groups to address; to understand their behaviour ; and to respond with
appropriate marketing strategies that satisfy the different preferences of each chosen
segment. Revenues are thus improved.

Improved segmentation can lead to significantly improved marketing effectiveness.

Distinct segments can have different industry structures and thus have higher or lower
attractiveness. With the right segmentation, the right lists can be purchased, advertising
results can be improved and customer satisfaction can be increased leading to better
reputation.
The purpose for segmenting a market is to allow marketing/sales program to focus on the
subset of prospects that are "most likely" to purchase manufacturer offering. If done
properly this will help to insure the highest return for marketing/sales expenditures.
Depending on whether manufacturer are selling to individual consumers or a business,
there are definite differences in what marketer will consider when defining market
segments

Segmentation is essentially the identification of subsets of buyers within a market who

share similar needs and who demonstrate similar buyer behavior. The world is made up
from billions of buyers with their own sets of needs and behavior. Segmentation aims to
match groups of purchasers with the same set of needs and buyer behavior. Such a group
is known as a 'segment'. Think of a market as an orange, with a series of connected but
distinctive segments, each with their own profile.

Of course a marketer can segment by all sorts of variables. The diagram above depicts
how segmentation information is often represented as a pie chart diagram - the segments
are often named and/ or numbered in some way.
NEED OF SEGMENTATION

The first thing we can establish is a category of need that our offering satisfies.

For businesses:
 Strategic -Segmentation is in some way important to the enterprise mission,
objectives and operational oversight. For example, a service that helped evaluate
capital investment opportunities would fall into this domain of influence. The
purchase decision for this category of offering will be made by the prospect's top
level executive management.
 Operations - Segmentation affects the general operating policies and procedures.
Examples might be an employee insurance plan or a corporate wide
communications system. This purchase decision will be made by the prospect's
top level operations management.
 Functional - Segmentation deals with a specific function within the enterprise
such as data processing, counting, human resources, plant maintenance,
engineering design, manufacturing, inventory control, etc. This is the most likely
domain for a product or service, but we must recognize that the other domains
may also get involved if the purchase of the product or service becomes a high
profile decision. This purchase decision will be made by the prospect's functional
management.

For the individual consumer:

 Social Esteem or Pleasure - Segmentation satisfies a purely emotional need in the
consumer. Examples are a mink coat or a diamond ring. There are some products
that are on the boundary between this category and the Functional category such
as a Rolex watch (a Timex would satisfy the functional requirement and probably
keep time just as well).
 Functional - Segmentation meets a functional requirement of the consumer such
as a broom, breakfast.

OBJECTIVES OF SEGMENTATION
 1. To make grouping of customers on the basis of their homogeneous characteristics
such as nature, habit, behaviour, income, age, education, profession, religion, etc.
2. To identify the needs ,tastes ,priorities ,buying-motives of the target consumers
3. To determine marketing strategies, targets and goals of the firm.
4. To make the activities of the firm consumer-oriented.
5. To identify the areas where the consumers may be created and market area can be
explained.

DIFFERENCE BETWEEN MARKET SEGMENTATION AND

MARKET SEGMENT

There is a difference between market segmentation and market segment. Market

segmentation is a process by which the market is divided in different segment on the
basis of some common characteristics of the consumers such as: income, sex, age,
education, profession, religion, etc whereas market segmentation is that part of whole
market in which we find uniformity in the buying trend or demand of every consumer.

CRITERIA FOR EFFECTIVE SEGMENTATION

Following are the criteria for effective market segmentation
1. IDENTIFIABLE: The segment or the group of consumer must be clearly
defined. That is, who is in the segment & who is outside the segment. The
marketer must be able to identify the members of the segment on the basis of
some characteristics. There must be clear differences between segments.

2. MEASURABLE: The effectiveness of the segmentation depends on the

measurability of the variable on the basis of which market is segmented. There are
many basis for segmenting the market. But whatsoever the base is taken that must
be measurable & obtainable in terms of data for effective segmentation.

3. ACCESSIBLE: The segment which is identified must be accessible so that a firm

can reach it through suitable means of communication and channels of
distribution.

4. RESPONSIVENESS: The identified market segment should respond favourably

to our marketing efforts. Different segments unless they respond in unique way to
particular marketing efforts hardly justify the use of a separate marketing
programme.

5. SIGNIFICANT: Another criteria for effective sementation is that it must be

worthwhile for cultivating & exploring it. It must have sufficient buying power.
The demand prospect should be sufficiently bright and profitable too.

6. SUBSTANTIABLE: The segment must be large enough to justify a separate

marketing programme. It should be large enough to justify the investment
 required to market the product in it. It should be large enough to be profitable.
Substantiality not only depends upon the number of actual and potential buyers
but also on their purchasing power.

CRITERIA OF MARKET SEGMENTATION

According to Philip Kotler, segment marketing offers several benefits over mass
marketing. The company can market more efficiently, targeting its products and
services, channels and communication programmes towards the consumers that it
can serve best and most profitably. The company can also market more
effectively by matching its products, prices and programmes according to the
needs of carefully defined segments.

The step towards developing a segmentation strategy is to locate the base or basis
for segmenting the market. There are different basis which are used to segment
the market. Prof. Cundiff and Still have given a very simple division of product
market.

I. Consumer Market.
II. Industrial Market.

According to Philip Kotler, consumer market can be segmented on the basis of: (i)
Geographical basis; (ii) Demographic basis; (iii) Psychological basis; (iv)
Marketing basis; (v) Profit basis; (vi) Quantum basis; (vii) Loyalty basis.
The market for industrial products can be segmented on the basis of: (i) Type of
business; (ii) Usual purchasing procedure; (iii) Size of users; (iv) Geographical
market segmentation.
 Market Segmentation
Consumer Market Industrial Market

Geographical Location

Demographic Company Type: - Size,

al Type of
Industry, Decision
Psychographical Unit
Behavioural:- Usage rate,
Behavioural Buying status,
Purchase procedure
SEGMENTING THE CONSUMER MARKET

The consumer market can be segmented on the basis of consumer characteristics like
geographic, demographic and psychological. The most common and popular criteria
bases or factors for market segmentation which are used by marketing managers may be
given as under:

I. Geographic Segmentation

It is the simplest convenient popular and usual base for market segmentation.
Historically also, the first and probably the most obvious basis for segmentation
of markets 1ias~eer geographical characteristics of people. In the geographical
basis regional differences in terms of topography, climate, population and its
density may be considered as the base for market segmentation.

Some example of geographic segmentation of market are as follows:

AREA : International, National, Regional, Local

REGION : Northern, Eastern, Western, Southern, Central.
CLIMATE : Hot, Cold, Humid, Rainy
CITY SIZE : Metropolitan, Big cities, Small cities, Towns, Villages
URBANISATION : Urban, Semi-urban, Rural, Slums.
DENSITY : High populated, moderately populated, Less populated.

The marketeer may design his marketing strategies taking into consideration the
characteristics of the individual markets. Geographic segmentation helps the
marketeers to concentrate their efforts to the exact places. Under geographic
segmentation organisational, promotional and distributional efforts can be
fruitfully utilised. Some examples are as follows.
 (i) Climate: The climatic conditions have great impact over the purchase
decision. For example: C29lers and Air conditioners are not
normally sold in hilly areas, similarly wool and woolen dresses are
less desirable in Southern India.

(ii) Urbanisation: The urban people are we1Leducated with high incomes and
have mobility, while the rural people are less educated with low
incomes and low rate of mobility. The urban people prefers to buy
a variety products like readymade garments, shoes, grocery items,
kitchen wares, cosmetics and electric appliances, whereas rural
people are more interested in necessities of life, seeds, fertilizers
etc.

II. Demographic Segmentation

It is also an important. Most purposeful and commonly used basis. Under

demographic segmentation, a marketeer tries to differentiate between group of
customers on the basis of demographic variables such as age, sex, family size,
marital status, education, occupation, religion, language nationality etc.
Demographic basis as the following advantages:

(i) These are easy to recognise and easy to measure.

(ii) Their data can be easily made available.
(iii) These can be easily co-related with sales and other marketing efforts.

Some commonly used demographic basis are as follows:

SEX : Male, Female

AGE GROUP : Infants, Youngs, Adults, Old age
INCOME : High income group, Middle income group, Low
income group.
EDUCATION : Primary, Secondary, senior secondary, College,
University.

RELIGION : Hindu, Muslim, Sikh, Christian, Others.

NATIONALITY : Indian, Pakistani, Nepalese, Chinese, Russians.
OCCUPATION : Service, Business, Industry, Cultivators, Financiers.
MARITAL STATUS : Married, Unmarried

In the case of frequently purchased consumer products like: tea, coffee, soaps,
detergents, toothpaste etc., we can easily use demographic variables, some
examples are as follows:

(i) Sex: Male-female buying behavrious shows remarkable differences. So

product market can be easily segmented on this basis. Much difference of
physique, psyche and habits is found in male and female. Physical differences
require variations in the design and styling of certain products like bicycles,
scooters, garments, cosmetics, footwear, wrist watch etc. Therefore, the market
for these products can easily be segmented on the basis of sex.

(ii) Income: The income of an individual determines to a great extent the type and
quantity of products he buys. A person with low income is more concerned with
purchasing necessities. He demands low quality products at low price. Whereas
the middle income group buyer is more interested in quality and durability.
Buyers belonging to high income group demand luxuries and prestigious priced
goods. The availability of products in large, medium and small packs is also
influenced by level of income. The decision to sell on credit is also due to
differences in incomes.

(iii) Occupation: It is also are important base to segment the market. On this basis
market may be divided in businessmen, industrialists, farmers, professionals (like
Doctors, Chartered Accountants, Lawyers etc.), employed persons. The needs,
attitudes and preferences differ in all these groups of customers.
 (iv) Family-life cycle: Family life cycle is a complex variable and is defined in
terms stage, marital status, age of wife and present age of children. Buying
behaviour changes with the change in stage of family life cycle. Investigations
have proved that the family life cycle exercise definite' influence on consumer
behaviour with reference to purchase of durables as well as non-durable products.

III. Psychographic Segmentation

Psychographic is a recent approach to market segmentation which has emerged as

a major alternative to the traditional approach. It describes the human
characteristics of consumers. It segment the market on the basis that how people
act. Psychographic basis includes. Personality, Lifestyle, Self-image, Attitude
etc. People within the same demographic group can exhibit very different
psychographic profits. Following are some commonly used psychographic basis

PERSONALITY : Extroverts, Introverts, Aggressive

LIFESTYLE : Conservative, Liberal, Health conscious,
Adventuresome, Status seekers.
SOCIAL CLASS : Lower-lower class, Lower-middle class, Middle
Class Middle upper class, Upper-upper class.
CULTURE : Continental, Chinese, Indian, South Indian,
Hindu culture.

There are two shortcomings in these basis. A marketeer must be aware of this,
while using psychographic basis:

(i) In this case data collection and analysis can be problematic because survey
instrument I.e. questionnaire have many questions.

(ii) Psychographic segmentation studies are costlier.

 Psychographic basis are difficult to measure but they provide a useful
basis for segmentation. Some examples of psychogrephic basis are as
follows:

a) Personality: It effects the consumption of many goods especially those

which are consumed publicly. The differences for product preference is so
wide that it is not possible to serve the same product to all the consumers.
To judge personality traits of an individual is a difficult task but if the
important personality traits are recognised, then the marketeers can easily
select the most profitable segment or segments. Personality base on
segmentation plays an important role in the products like: Clothing,
Furniture, Crockery, Cosmetics, Automobiles, Shoes, jewellery,
Cigarettes, Liquor etc.

b) Life Style: Generally, products demand consumed by consumers express

their lifestyle. Lifestyle reflects the overall manner in which persons live
and spend time and money. It is behavioural concept enabling us to grasp
and predict buyer behaviour. On the basis of lifestyle consumers can be
grouped as 'Swingers' who seek latest products; 'Status seekers' who try to
buy goods that wi1I reflect a high status and 'Plain Joes' who seeks
ordinary and simple products. Consumers can also be group as
Conservative, Liberal, and Adventuresome. Another group of health
conscious consumer can also be made to market the products like:
medicines, vitamins, health aids etc.

c) Social class: The society is divided into various classes and a consumer
belonging to a particular class purchases according to its class features.
There are different ways to make groups on the basis of social classes.
Some authors give five groups classification, some give three groups
classification as: Upper, Middle and Lower. Upper class demands
expensive and superior products, e.g. A.C's Mobile phone, luxurious items
 etc. Middle class demands comforts products, e.g. Cooler, Scooter,
Crockery, Furniture etc. Lower class demands necessity products. From
the ancient time Indian society is divided into four groups such as
Kshatriya, Brahmin, Vaish and Shudra. The buying behaviour of these
four classes differs significantly.

IV. Marketing Basis

Marketing conditions also form an important basis or criteria for market

segmentation. There are latest variables used by modern marketeers is include:
(i) Degree of Competition: Non competition, Low competition, Moderate
competition and acture competition in the market.
(ii) Channels of distribution: One level (i.e. only retailers), Two level (i.e.
wholesalers and retailers), Multi-level (i.e. selling agents, wholesalers and
retailers).
(iii) Buyers with price consciousness: High price market, Low price market.
For example, Connought Place market and Sadar Bazar market of Delhi.

V. Consumer-Behaviour Basis

Consumer behaviour may also form the basis of market segmentation consumer
behaviour divide the market on three basis: (i) Usage Rate; (ii) Benefit Response,
and (iii) Loyalty Response.

(i) Usage Rate: Markets can be segmented on usage rate as:

Heavy, Medium, Light and Non-User.
Though the heavy users are small in number but they show a high
percentage of total consumption. Normally, heavy users consume four to
ten times move than the light users. Therefore, marketeer likes to attract
the heavy users.
 Non-user group is consisting two types of people. One, who generally do
not use this product (Le. Non-Potential Users) and those who might use
(Le. Potential Users). Potential users can be treated as target market, if
company desire to expand his market.

(ii) Benefit Response: When consumers buy a particular product they have
their expectation. Such expectations differ from product to product and
from consumer to consumer. These benefits can be durability, economy,
efficiency, prestige etc. For example, in case of 'Shampoo' the benefits
sought may: cleanliness, protection, cosmetic and economy, in case of
'Tooth Paste' the benefits sought may be : prevention from tooth decay,
gum's strongness, bright teeth, freshness, taste and low price, in case of
'Automobile' the benefits sought may be: fuel economy, quality, status,
resale value.

Segmentation based on benefits is usually most practical approach. Thus, a

company can choose any benefit it wants to emphasis, create a product
and deliver it by a direct message to the group seeking that benefits.

(iii) Loyalty Response: Loyalty response is the latest base used for
segmentation. It works on the tact that the consumers can differentiate
between the products. That is that create a product. That is they create a
product preference scale. That is, the buyers are asked to compare the
existing brands of product and rate them as they perceive them based on
their likings. Such an attempt helps the seller in developing an ideal brand
to which a sizeable group of customers is clustering. Later on, these
consumers can be sub-divided on the demographic or psychographic
features.

On the basis of loyalty response we may classify the consumers as most loyal,
moderately loyal and switchers. Most loyal are the ones who in no case will buy
any other brand as they have developed loyalty towards one' specific brand. They
are not ready to purchase any substitutem. Moderately loyal are the ones who do
not stick to particular brand rather they can easily choose between two or three
brands. Switchers are the ones who are not loyal to any brand. They rather,
purchase any brand which is conveniently available and are low priced. Such
consumers do not decide in advance the brand to be purchased rather they decide
on the spot what to purchase. However, it is very difficult to measure loyalty
correctly.
SEGMENTING THE INDUSTRIAL MARKET

Like the consumer market, industrial market can also be segmented. This market
segmentation is as appropriate for industrial products as for consumer products.
Many basis are used for segmenting the industrial market. Some important basis
are as follows:

1. Type of business activities basis: This type of segmentation strategy is

used when the industrial house produces several products or 'services. For
example, the market of a Insurance company can be segmented as: Fire
and general insurance business, Marine insurance business, Life insurance
business. A separate division may be formed for each type of business.
This market can again be segmented on the area basis.

2. Geographical location basis: Geogrphical segmentation may also exist,

when some kinds of business and service oganisation seem to settle in a
particular area, for one or other reason. For example: Handloom industry
at Panipat, Scientific goods industry at Ambala Cantt, Hosiery industry at
Ludhiana.

3. Usual purchasing procedure basis: Industrial buyers are generally more

systematic buyers than household buyers. Among industrial buyers there
in much variation in the amount of consideration given to buying different
items, for example less price, optimum quality, easy availability etc.

4. Size of user: Size of industrial purchases vary according to the size of

industrial user. The market according to size can be divided as large
buyers, medium buyers, small buyers. Since, it is generally more
economical to sell in large lots than small, the industrial markets quote
lower rates to buyers of large quantities.
Industrial market can also be segmented on the basis of:
(i) Demographic basis: such as Industry, Company size location.
(ii) Situational variables: such as Buyer-seller similarity, Risk bearing and
Loyalty, Urgency, Size of order.
PRODUCT DIFFERENTIATION AND MARKET SEGMENTATION.

The manufacturer who faces intense competition either tries to reduce the price of
his product or go for product differentiation. Product differentiation is a strategy
wherein the marketeer through sales promotion activities tries to put
psychological pressure on consumers and portrays as if his product is not only
superior to competitors but it is also the only one that can satisfy their needs and
wants. If the marketeer succeeds in convincing that his product is 'different' or
'better' than the one available in the market, consumer will be more inclined to his
product than its competitors. See the advertisement of "Maggi" Sauce. "Captain
Cook" salt; "Rin Detergent Bar".

In product differentiation strategy, the manufacturer does not make any big
physical alteration in the product rather he differentiates his products on the basis
of brand name, colour, shape, size etc. For example Hindustan Lever Ltd. presents
bathing soaps in different brand names such as Jai, Lux, Hamam, Rexona etc. in
various colours, sizes and fragrances without much physical difference. The
product differentiation strategy was first used in 1920s. Still, even to-day il is a
powerful strategy to sell the products of a company 10 different consumer
groups/segments successfully. Under product differentiation the demand is
bended according to supply. Product differentiation is generally used to sell the
products like Bathing soaps, Washing soaps, Cosmetics, Bidi, Cigarette, Sports
material, Petroleum products etc.

Market segmentation, on the other hand, divides the total heterogeneous market
into small homogeneous groups/segments and tries to produce the product that
satisfies the needs of a particular segment. Here the supply is bended according to
demand. It emphasis's the demand side. It is an attempt to adjust product and
marketing efforts according to the needs of consumers. Here, the total market is
divided into sub-markets and products are offered which satisfy the well defined
needs of specific groups of consumers/segments. Once the market has been
clearly identified, it becomes easier for the marketeer to offer products, which is
different from those of competitors. Market segmentation strategy was first used
in 19505 along with new concept of marketing. Still, this approach is most widely
used even today.
ADVANTAGES AND IMPORTANCE OF
MARKET SEGMENTATION.

Market segmentation is the reality of the market situation. Different customers

have different needs and preferences. Therefore, market demand for all the
products and services is heterogeneous and not homogeneous. For segmentation
when customers needs are analysed ; we find that there are number of needs,
which are still unfulfilled by fulfilling these needs we can become a successful
marketeer. Segmentation ensures higher customer satisfaction and improve
effectiveness of the marketing programme. Market segmentation strategy is a
customer oriented philosophy.

Market segmentation strategy benefits both the marketeers and the consumers.
According to Prof. Maurice I. Mendell and Prof. Larry J. Rosenberg, a marketeer
receives the following advantages from the market segmentation.
1. Knowledge of marketing opportunities: Under market segmentation,
marketeers are in a better position to locate and compare marketing
opportunities. In the- market area where, response of the customers seems
to be poor, the strategy of approach can be readjusted, so that the sales can
be pushed up.

2. Adopting effective marketing programme: When customer needs are

fully understood marketeer is able to formulate and implement different
marketing programmes which suits. to the markets. In the absence of
segmentation a single marketing programme will be framed which may
not be effective for all consumer- groups. But because of segmentation the
seller can create different marketing programmes which suits to the needs
of different consumer groups. He can make better adjustments of his
products and marketing appeals.
3. Proper allocation of resources: Segmentation leads to proper allocation
of marketing resources because customer is the focus of all marketing
efforts and only target markets are served. He can allocate his limited
financial and marketing resources according-to the needs of different
segments. Less resources' to be allocated where marketing opportunities
are less and more resources to be allocated where marketing opportunities
are more. Hence, market segmentation helps in proper allocation of
resources.

4. Better assessment of the competition: Market segmentation helps in

assessing correctly the strength and weaknesses of the competitors. This
assessment helps the marketeer to adopt different strategies in different
markets taking into account the competitor's strategies.

Market segmentation also helps to know the level of competition in each

segment. If the competitor has stronghold in any segment, there is no use
in wasting resources on such segment. However, in the segment where
competitor's product fails to satisfy the target group, the marketeer can
successfully penetrate in it.

5. Knowledge of customer's needs: Market segmentation improves a

company's understanding of why customers do or do not buy certain
products or services. It also provides an understanding that how a
company can make adjustment to meet changing market demands.

All marketing activities are directed towards the satisfaction of consumers.

With the help of segmentation it becomes easy to measure the level of
segmentation in each segment and also to make improvements in the
segmentation level.

6. Adjustment in products: Under market segmentation, marketeers can

easily make finer adjustments in their products and market communication
according to the change in taste, need, nature and income of the
 consumers. More resources may be allocated to market segments where
sales opportunities are better.

7. Effective advertising appeals: Influencive messages can be propagated to

the consumers through effective advertising media when the choices,
habits, preferences, needs of different buyer groups are duly recognised
with the help of market segmentation. So different advertising appeals can
be formulated for different segments. Hence, segmentation helps to make
the advertising appeal more effective.

8. Enhance marketing efficiency: Market segmentation enhances marketing

efficiency by offering specific pricing, sales promotion and distribution
channel as per the requirement of different segments. Unique marketing
strategies can be framed regarding product, pricing, advertising, sales
promotion, distribution channel etc. according to changing need of the
segments. This increases the marketing efficiency of firm.

9. Increase in sales volume: By segmentation the market manufacturer can

increase his sales volume. As we know, each segment has different
demand pattern and when the manufacturer satisfy the demand of different
segments by changing his product, the total sales volume of the company
increases.

10 Benefits to consumers: Segment results in product wars between the

Sauce Vs Maggi Sauce; Tata Salt Vs Captain Cook salt; Colgate Vs Close
up and so on. Each time this product war goes in favour of consumers.
For example in Cola war, consumer gets more Cola for same price;
consumer also gains in terms of added quantity, quality and variety.
TARGETING
 TARGETING

Targeting is the next step in the sequential process and involves a business making
choices about segment on which resources are to be focused. There are three major
targeting strategies: undifferentiated, concentrated, and differentiated. During this process
the business must balance its resources and capabilities against the attractiveness of
different segments. Target Marketing involves breaking a market into segments and then
concentrating the marketing efforts on one or a few key segments. Target marketing can
be the key to a business’s success.

After the most attractive segments are selected, a company should not directly start
targeting all these segments. The attractiveness of the segments is also depending on
other important factors. In the main activity of defining a target market, four sub
activities are given which are the bases for deciding on which segments will actually be
targeted.

The four sub activities within targeting are:

1. Defining the abilities of the company and resources needed to enter a market

2. Analyzing competitors on their resources and skills

3. Considering the company’s abilities compared to the competitors

4. Deciding on the actual target markets.

The first three sub activities are described at the topic competitor analysis. The last sub
activity of deciding on the actual target market is an analysis of the information made
available when comparing the companies’ abilities to the competitors’. This analysis
leads to a list of segments which are most attractive to target and have a good chance of
leading to a profitable market share.
Obviously, targeting can only be done when segments are predefined; there have to be
segments to analyze the competitors which are in this market. When the process of
targeting is ended, the markets to target are selected, but the way to use marketing in
these markets is not yet defined. To decide on the actual marketing strategy, knowledge
of the differential advantages of each segment is needed. When positioning a product, the
segments are first analyzed.
FACTORS TO BE CONSIDERED WHILE TARGET MARKET
SELECTION

 Attractiveness of a Market Segment

1. Size of the segment (number of customers and/or number of units).

2. Growth rate of the segment.
3. Competition in the segment.
4. Brand loyalty of existing customers in the segment.
5. Sales potential for the firm in the segment.
6. Expected profit margins in the segment.

 Suitability of Market Segments to the Firm

1. Whether the firm can offer superior value to the customers in the segment.
2. The impact of serving the segment on the firm's image.
3. Access to distribution channels required to serve the segment.
4. The firm's resources vs. capital investment required to serve the segment.
TARGET MARKET STRATEGIES

1. Single-segment strategy- Also known as a concentrated strategy. One market

segment (not the entire market) is served with one marketing mix.
2. Selective specialization- This is a multiple-segment strategy, also known as a
differentiated strategy. Different marketing mixes are offered to different
segments.
3. Product specialization- The firm specializes in a particular product and tailors it
to different market segments.
4. Market specialization- The firm specializes in serving a particular market
segment and offers that segment an array of different products.
5. Full market coverage- The firm attempts to serve the entire market.
HUL SEGMENTING POLICY

Company’s Background

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods
Company, touching the lives of two out of three Indians with over 20 distinct
categories in Home & Personal Care Products and Foods & Beverages. They endow
the company with a scale of combined volumes of about 4 million tonnes and sales of
Rs.10,000crores.  
 
HUL is also one of the country's largest exporters; it has been recognized as a Golden
Super Star Trading House by the Government of India.  
 
The mission that inspires HUL's over 15,000 employees, including over 1,300
managers, is to "add vitality to life." HUL meets everyday needs for nutrition,
hygiene, and personal care with brands that help people feel good, look good and get
more out of life. It is a mission HUL shares with its parent company, Unilever, which
holds 51.55% of the equity. The rest of the shareholding is distributed among 380,000
individual shareholders and financial institutions.  
 
HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's,
Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-
Annapurna, Kwality Wall's – are household names across the country and span many
categories - soaps, detergents, personal products, tea, coffee, branded staples, ice
cream and culinary products. They are manufactured over 40 factories across India.
The operations involve over 2,000 suppliers and associates. HUL's distribution
network comprising about 4,000 redistribution stockists, covering 6.3 million retail
outlets reaching the entire urban population, and about 250 million rural consumers.  
 
HUL has traditionally been a company, which incorporates latest technology in all its
operations. The Hindustan Unilever Research Centre (HLRC) was set up in 1958, and
now has facilities in Mumbai and Bangalore. HLRC and the Global Technology
Centers in India have over 200 highly qualified scientists and technologists, many
with post-doctoral experience acquired in the US and Europe.  
 
HUL believes that an organization’s worth is also in the service it renders to the
community. HUL is focusing on health & hygiene education, women empowerment,
and water management. It is also involved in education and rehabilitation of special
or underprivileged children, care for the destitute and HIV-positive, and rural
development. HUL has also responded in case of national calamities / adversities and
contributes through various welfare measures, most recent being the village built by
HUL in earthquake affected Gujarat, and relief & rehabilitation after the Tsunami.  
 
In 2001, the company embarked on an ambitious programme, Shakti. Through Shakti,
HUL is creating micro-enterprise opportunities for rural women, thereby improving
their livelihood and the standard of living in rural communities. Shakti also includes
health and hygiene education through the Shakti Vani Programme, and creating
access to relevant information through the iShakti community portal. The program
now covers 15 states in India and has over 31,000 women entrepreneurs in its fold,
reaching out to 100,000 villages and directly reaching to 150 million rural consumers.
By the end of 2010, Shakti aims to have 100,000 Shakti entrepreneurs covering
500,000 villages, touching the lives of over 600 million people.  
 
HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The
programme endeavors to induce adoption of hygienic practices among rural Indians
and aims to bring down the incidence of diarrhea. It has already touched 70 million
people in approximately 15000 villages of 8 states..  
 
If Hindustan Unilever straddles the Indian corporate world, it is because of being
 single-minded in identifying itself with Indian aspirations and needs in every walk of
life.
DIFFERENT PRODUCT LINE OF HUL

Lux   Breeze

Lifebuoy   Dove

Liril   Pears

Hamam   Rexona

     
Surf Excel     Fair & Lovely  

Rin     Pond's  

Wheel     Vaseline  

Sunlight     Aviance  

     
Sunsilk Naturals     Pepsodent  

Clinic     Closeup  

     
Axe     Lakme  

Rexona    

Ayush          
   
     
Brooke Bond   Brooke Bond Bru    
Lipton          
      
Kissan   Kwality Wall's    
Annapurna
Knorr

MARKET SEGMENTATION OF TOSHIBA

Toshiba is a cooperation which established in 1978 in Japan. Toshiba is the world's

9th largest integrated manufacturer of electric and electronic equipment, with 190,709
employees’ worldwide and consolidated annual sales of over US$61 billion, taking
the number 91 spot in the world (The Fortune, 2007). This cooperation is also a world
leader in high technology, a diversified manufacturer and marketer of 4 main business
segments which are Digital Products, Electronic Devices & Components, Social
Infrastructure Systems and Household Appliances (Toshiba, n.d.).
Demographic Market Segmentation: Market Segmentation Based on Gender Groups:
Gender is one of the key demographic variables for Toshiba’s market segmentation.
Although Toshiba’s product line is suitable for both men and women, it is the male
side that makes up the majority portion of consumers. Men have a "technological
world view" that grew up along with industrial society (Brenston, 2007). Hence it was
no surprise that Toshiba had that in mind and made its product renowned for elegance
and class, which is an essential element in middle-high working class. By looking at
the new Toshiba satellite television commercial (2009), one can tell that the product
is targeted towards working class men as the commercial include offices and male
entrepreneurs in its scene. Besides that, Toshiba hires famous female celebrities such
as Japanese singer BoA and Chinese athlete Guo Jing Jing to promote their products,
notable for the sex appeal towards men.

McDONALDS SEGMENTATION POLICY

McDonald's Corporation is the world's largest chain of fast food restaurants, primarily
selling hamburgers, french fries, soft drinks, milkshakes and desserts. It appeals to
local taste preferences with relevant offerings like the offerings of one-third pound
Big Tasty in most Europe and Latin America.
McDonald's began in 1940 and opened by siblings Dick and Mac McDonald in San
Bernardino, California. “We take the burger business more seriously than anyone
else." is the philosophy of McDonald’s. The successful expansion of McDonald's into
many international countries make the company become a symbol of globalization
and the spread of the American way of life. However, it also make it a frequent topic
of public debates about obesity, corporate ethics and consumer responsibility.
There are at least 31,000 McDonald can be found in 120 countries and territories
around the world serving nearly 54 million customers each day. McDonald's has
always been a franchising company and has relied on its franchisees, to play a major
role in the System's success. It remains committed to franchising as a predominant
way of doing business.
CONCLUSION

Market Segmenting and Targeting are the tools used by the marketers to capture the
market share from the rivals of their product. Thus, we can say that the total process
of market segmentation and targeting is a very important attribute of marketing mix.
These two process very closely related inter related with each other. To make this
marketing process effective a thorough swot analysis of the firm is very important.
Keeping in mind the strength, weakness, opportunities and threat the firm can
formulate and implement its total marketing mix.
We conclude that market segmentation helps the manufacturers and marketers to
match their products with the real needs of the consumers groups. It also benefit the
consumer, he may get the best suited products at proper price and quantity.
BIBLOGRAPHY

BOOKS:-

AUTHOR’s
SURNAME NAME TITLE PUBLICATION
PRINCIPLES OF
BANSAL Dr.S.P. MARKETING KALYANI
PRINCIPLES OF
JAIN ASHOK MARKETING VK

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