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Process of Segmentation
1. Survey
2.
Formation of segments
3. Customer profile
4. 5.
EFFECTIVE SEGMENTATION
Measurable Differentiation Substantial Actionable Accessible
2. Formation of segments
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1. Build-up approach (Small no. of customers) 2. Break-down approach (Large no. of customers)
STRATEGY
Single segment concentration Selective specialization Product specialization Market specialization Full market coverage (Undifferentiated & differentiated mkting)
2. NEED BASED MARKET SEGMENTATION MARKET PARTITIONING : Hierarchy of attributes consumer follow in choosing a brand. Eg : Washing powder NEED SIZE BRAND FORMS Cheap Small Moderate Medium Large Expensive Super large Family Pack
Local Dealer Surf Surf Excel Ariel Nirma Bar Cake Powder Liquid
Significance of SEGMENTATION
1. 2. 3. 4. 5. 6. 7. 8.
Manufacturing the product with the market demand. Working for economic functioning. Tapping opportunity and doing away with the threat. Enables the company for appropriate marketing mix. Overall monitoring of all marketing operations. Increased sales & market share. Providing growth opportunities to smaller firm. Improving the products.
BENEFITS
MOBIL Classifications
2. Generations F: 27% Fast
3. True Blues: 16% Branded 4. Home Bodies: 21 % Convenience 5. Price Shoppers: 20% Low Price
4. Switchers
Psychographic Segmentation
(Psychology +Demographics)
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SRI Consulting Business Intelligence (SRIC-BI) VALS TM Based on responses derived from questionnaire featuring 4 demographic and 35 attitudinal questions. 80,000 surveys per year.
INNOVATORS
Primary Motivation
SURVIVORS
Product-Related Segmentation Dividing a consumer population into homogeneous groups based on characteristics of their relationships to the product
Can take the form of segmenting based on:
Benefits that people seek when they buy Usage rates for a product Consumers brand loyalty toward a product
Benefits
Focuses on the attributes that people seek in a good or service and the benefits that they expect to receive from that good or service Groups consumers into segments based on what they want a product to do for them
Usage Rates
Segmenting by grouping people according to the amounts of a product that they buy and use Markets often divided into heavy-user, moderateuser, and light-user segments The 80/20 principle (Praedos Law)
Brand Loyalty
Segmenting consumers grouped according to the strength of brand loyalty felt toward a product Frequent flyer programs of airlines and many hotels
OPERATING VARIABLES: Technology, User or Non-user status, Customer capabilities. PURCHASING APPROACHES: Purchasing function organization, Power structure, Nature of existing relationships, General purchase policies, Purchasing criteria.
TARGETING
1. Standardization
2. Differentiation 4 Ps, People, Images, Service, Channel 3. Focus
Concentrated Marketing (niche marketing): when a firm commits all of its marketing resources to serve a single market segment Micromarketing: involves targeting potential customers at a very basic level, such as by ZIP code, specific occupation, lifestyle, or individual household
Positioning: a marketing strategy that emphasizes serving a specific market segment by achieving a certain position in buyers minds
Attributes Price/quality Competitors Application Product user Product class
Positioning map Graphic illustration that shows differences in consumers perceptions of competing products Reposition Marketing strategy to change the position of its product in consumers minds relative to the positions of competing products
Trout and Ries suggest a six-step question framework for successful positioning: 1. What position do you currently own? 2. What position do you want to own? 3. Whom you have to defeat to own the position you want. 4. Do you have the resources to do it? 5. Can you persist until you get there? 6. Are your tactics supporting the positioning objective you set?
Positioning Strategies
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1. Product Attributes 2. Benefits 3. Usage Occasions 4. Users 5. Against a Competitor 6. Away from a Competitor 7. Product Classes
Positioning Differences
1. Important 2. Distinctive 3. Superior 4. Communicable 5. Preemptive 6. Affordable 7. Profitable