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Namakumari
SEGMENTATION
PILLARS OF MARKETING
TARGETING POSITIONING
STP Strategies
(a)
Segmentation
STP
(b) Targeting
(c)
Positioning
(a) Segmentation
CONCEPT QUESTIONS What is market segmentation ? Why segment the market ? Bases for segmentation ? Tasks involved in segmentation ? APPLICATION QUESTIONS
Market segmentation is the process of dividing a market into sub-sets of consumers with common needs or characteristics Since most companies have limited resources, few companies can pursue all of the market segments identified
Why segment the market ? Facilitates right choice of Target properly Facilitates effective tapping of the chosen market Makes the marketing effort more efficient and economic Helps identify less satisfied segments and concentrate on them
EACH MARKET SEGMENT CAN BE MEASURED AND EVALUATED IN TERMS OF MARKET ATTRACTIVENESS
Socio-culturals
Buying Behaviour
Psychographics
Geographics Segmentation
Factors
Climatic Zone
As long as there are clearly identifiable differences between one region and the other, with implications to marketing, geographic segmentation will be useful
Race Religion Community Demographic Segmentation Language Age Gender Marital Status Family size Occupation Income
Socio-cultural Segmentation
Culture Manifests in the form of Symbols, heroes/icons, rituals and values Brings its own pattern of social conduct Which influences consumer behaviour
Social factors A buyer is a member of several groups both formal and informal
Reference Groups : Intimate groups, Secondary groups, Opinion leaders, Social class Social groups of varying types exert influence on the consumers
Psychographic Segmentation
Based on
Lifestyle Attitude Self-concept Facilitates grouping of Value consumers in such a manner system that the group shares a common buying behaviour
e.g.
Coffee Cafes thrive on Lifestyle segments Certain cars are sold on lifestyle segment
A / Entry level/Budget segment B / Compact segment C / Family/Mid segment D / Premium/Executive Sedan segment
CORSA ..The Achtung Baby In C Segment GM tapped the lifestyle oriented Indians the rich, successful, young and sophisticated termed Yuppie Indians who were keen to make a statement bout their position. It built a lifestyle oriented image for CORSA
FORD IKON ..The Josh Machine Baby In C Segment FORD targeted the Yuppie Indians and classified it as the Young at heart segment and incorporated a number of attributes that would appeal to this segment . It was a car with best of looks and good vehicle dynamics
MARUTI S X 4 MARUTIs lifestyle pitch : Pure power, Pure muscle, Pure adrenaline, Pure style, Pure man. The new S X 4 - the man amongst the cars -- is here S X 4 MEN ARE BACK
MARUTI ALTO VX In B Segment Maruti built lifestyle imagery around ALTO. Its themes were ; It is the hottest thing and ALTO for the couple
Usage status Benefits sought from the product Buyer Behaviour Segmentation Volume of purchase/degree of use Purchase occasion Buyers attitude towards the product Their loyalty to the brand
To succeed here , he should be able to convince those users about the superiority of the brand
Benefit segmentation
Segmenting market on the basis of benefits expected by the consumer Helps the marketer identify segments that are presently less satisfied and are experiencing a big gap between the benefit sought and benefit available Marketer provide value in the form of benefits
E.g. Calorie watchers and health seekers PEPSI : Diet Pepsi Horlicks : Diet Horlicks Mother Dairy : Low calorie ice cream Bread : Whole wheat/Brown bread
BENEFIT SEGMENTATION
TOOTH PASTE
GENERAL BENEFITS THAT CONSUMERS SEEK ARE CLEANLINESS AND HYGENE IN ALL SEGMENTS.
COSMETIC Protection Against Foul Smell, Modernity & Cosmetic Value COLGATE CLOSE-UP PRUDENT
FLUORIDE Family Health, Extra Protection For Children COLGATE FLUORIDE CIBACA FLUORIDE
HERBAL
Family Health and Welfare. Traditionally Good For Health NEEM DABUR VAJRADANTI
PERCIEVED BENEFITS
PERCIEVED BENEFITS
STURDY VEHICLEFOR OUR ROAD CONDITIONS, GOOD FOR LONG RIDES AND HIGH RESALE VALUE FUEL EFFICIENT, HIGH PICK UP AND STYLISH
KAWASAKI BAJAJ HIGH PICK UP SLEEK MODEL SCOOTER BRANDS BAJAJ CHETAK KINETIC HONDA PERCIEVED BENEFITS
FUEL EFFICIENT, LONG LIFE , HIGH RESALE VALUE ELECTRONIC IGNITION, EASY TO RIDE, TROUBLE FREE
Volume segmentation
Quantity of purchase --- actual or potential is the base for volume segmentation Bulk buyers Small-scale buyers Regular buyers One-time buyers
TARGETING STRATEGIES
Market targeting
Is selecting one or more of the segments identified for the company to pursue A target market is a group of people or organizations for which a company designs, implements, and maintains a marketing mix intended to meet the needs of the group resulting in mutually beneficial and satisfying exchanges
Step-1
Step-2
Evaluating the two segments: i)Is it sizeable ii)Is it growing iii)Is it profitable iv)Is it accessible v)Is it compatible with the firms ambitions, resources and capabilities
Selective specialization
Number of segments Each objectively attractive and appropriate Each promises to be a money maker Advantage of diversifying the risk
Radio Broadcasting
Product specialization
Microscopes
Market specialization
The firm concentrates on serving many needs of a particular customer group The firm gains a strong reputation in serving this customer group and becomes a channel for additional products the customer group can use
Full Market Coverage The firm attempts to serve all customer groups with all the products that they might need
IBM (Computers)
Undifferentiated marketing
Differentiated marketing
Undifferentiated marketing The firm ignores segment differences and goes after the whole market with one offer It designs a product and marketing programme that will appeal to the broadest number of buyers The firm ignores segment differences and goes after the whole market with one offer It relies on mass distribution and mass advertising It aims to endow the product with a superior image in peoples mind The narrow product line keeps down costs of: R&D Advertising Production Inventory Transportation Marketing Research Product Management
Differentiated marketing Firm operates in different market segments and designs different products for each segment General Motors produces cars for; Purse Purpose Personality IBM offers many hardware and software packages for different segments in the computer market
SINGLE SEGMENT
SEMI-LUXURY SEGMENTEXPENSIVE SINGLE MARKETING MIX SMALL CAR SEGMENT AFFORDABLE, ARE LESS EXPENSIVE VERY EXPENSIVE LUXURY CAR SEGMENT
CAR MARKET
MULTI-SEGMENT STRATEGY
MARKETING MIX EXPENSIVE SEMI-LUXURY SEGMENT
CAR MARKET
MARKETING MIX
MARKETING MIX
Targeting failures
It had defined its target market as college students in the age group of 15 to 25 years
Levis
Levis had assumed that a sizeable group of this description would be able to afford the price tag of Rs. 999 to Rs.2,295 willing to buy the jeans at those prices
The number of consumers who could afford the price tag was far less then they had assumed Levis failed to define correctly what constituted its target market and what constituted its size.
Targeting failures
Reebok
Reebok entered India, aiming at the segment with Rs.5,00,000 plus annual income that was generally referred to as high end segment of the Indian footwear market with the price tag between Rs.1300 to Rs.6,500. Volumes were not forthcoming. Reebok shifted to the next lower segment and introduced its new range CLASSIC, at a comparatively more affordable price of Rs.900 per pair. Sales picked up.
Targeting failures
The brand image strongly associated with exclusive apparel the targeting became totally faulty. It was a super luxury apparel brand It misconstrued the well to do among the Indian middle class as its target Pierre Cardin The middle class dare not look at a gown that costs Rs.2000 plus, the super affluent found the price too low for their status The very idea of a classy French Label at affordable prices was a contradiction in terms, a contradiction with the brands perceived luxury position
POSITIONING STRATEGIES
CONCEPT QUESTIONS What is positioning ? Why is positioning important ? Bases for segmentation ? Tasks involved in positioning ? APPLICATION QUESTIONS
positioning
Is developing a distinct image for the product or service in the mind of the consumer, an image that will differentiate the offering from competing ones and squarely communicate to consumers that the particular product or service will fulfill their needs better than competing brands
42
Positioning-principles
1)Communicating the benefits that the product will provide rather than the products features (consumers do not buy drill bits-they buy ways to make holes)
43
Positioning-principles
2)because there are many similar products in any market place, an effective positioning strategy must develop and communicate a unique selling proposition
44
Positioning-principles
Most new products introduced by marketers( new flavors, sizes) fail to capture a significant market share and are discontinued because they are perceived by consumers as me too products lacking a unique image or benefit
MARKET POSITIONING SINCE CONSUMERS USE IMAGES WHILE PURCHASING A PRODUCT/SERVICE BRANDS HAVE A POWERFUL INFLUENCE ON CONSUMERS MINDS
THE MARKETER POSITIONS THE PRODUCT/SERVICE IN THE TARGET CONSUMERS MIND BY CREATING AN IMAGE IN THE CONSUMERS MIND OF THE PRODUCT/SERVICE
POSITIONING STRATEGIES
COMPLAN
COMPLETE PLANNED FOOD
HORLICS
THE GREAT NOURISHER WITH EXTRA CALCIUM HEALTH STRENGTH & ENERGY CONTAINS PROTEINS, VITAMINS MINERALS CARBOHYDRATES ENERGY AH ENERGY
DOUBLE ACTION DRINK
BOURNVITA
BOOST VIVA
POSITIONING STRATEGY
DEFINITION
ADVERTISING CLAIMS
THE STRATEGY IS MORE COMMON IN ALL THE PROIDUCT CATAGORIES. ADVERTISING CLAIMS A BENE FIT
A PRODUCT OR SERVICE ADVERTISING CLAIMS IS HIGHLIGHTED IN VALUE FOR MONEY TERMS OF SERVICE, FEATURES OR PERFORMANCE A HIGHER PRICE TO COMMUNICATE THAT THEY PROVIDE QUALITY
4.
ADVERTISING CLAIMS THAT CINE STRARS OR SPORTS STARS ARE USING THE PRODUCT
6.
POSITIONING BY ASSOCIATING CULTURAL ADVERTISING CLAIMS AS CULTURAL SYMBOLS SYMBOLS WITH THE ROYAL PRODUCT OR SERVICE TYO DIFFERENTIATE FROM COMPETITORS
7.
POSITIONING BY COMPETITOR
ASSOCIATING WITH
ADVERTISING CLAIMS COMPETITOR PRODUCT COMPARES WITH COMPETITORS BRANDS BRAND BY COMPARISION
STEP-II
STEP III
STEP- IV
STEP- V
PERCEPTUAL MAPPING
Cinthol
. . . . .
Liril
Personal soap
Lux
.
Moti
.
Evita
Camay
Luxurious
Le Sancy
Family soap
NON COLA
(d) Differentiation
DIFFERENTIATION STRATEGIES
PRODUCT DIFFERENTIATION
PRODUCT DIFFERENTIATION STRATEGY FOR
RETAINING CUSTOMERS SHAPING DEMAND IN THEIR FAVOUR
Differentiation Oriented Strategy with Emphasis on Product Differentiation Oriented Strategy with Emphasis on Distribution Differentiation Oriented Strategy with Emphasis on Promotion
Functionality
Experience
DIFFERENTIATION ORIENTED STRATEGIES WITH EMPHASIS ON Functionality (Microsoft) Microsoft is synonymous with computer operating systems. It commands 70 % of the revenue generated world wide simply because of its product design and functionality The ongoing windows family commenced with Windows 98, moved on to Windows 2000, Windows XP and now to Windows Vista Every new version carried substantial improvements/new features and gave vastly improved feature to the computer user Windows Vista carried: Windows Defender & Firewall Aero Desktop Experience Mobility Centre for Laptops Media Centre Extenders Instant Search Windows Flip 3D tablet PC Support Fax & Scan Internet Explorer 7 Live Thumbernails Meeting Space
DIFFERENTIATION ORIENTED STRATEGIES WITH EMPHASIS ON Packaging Convenience : Firms capture new segments with Chotta Size A bite of Cadburys One dose of Nescafe One spoon of Sunsilk Chotta Coke Chota Cooklite (200 ml) Godrej Strategic objective --- Enhance the market penetration by capturing new segments --- Ramp up volumes --- Play a combination of differentiation and price oriented strategy COKE increased its customer base from 16 crores to 24 crores between 2003 and 2005; Sachets constitute more than 70 % of the total sales of the shampoo industry at Rs.1 at Rs.2 at Rs.0.75 at Rs.5 at Rs.13
Kingfisher differentiates itself on service. Some of the special services on which Kingfisher bases its claim to uniqueness is highlighted below: SERVICE AT THE AIRPORT
SERVICE ON BOARD
AT THE AIRPORT Valet assistance Available from the time you reach the airport till the time you check-in and on arrival at the destination airports Translates into ..less waiting time at counters .. on time departures
Check-in
Delay handling
Efforts are made to minimize the inconvenience Refreshments are offered in case the delay is more than one hour Meals are offered in case of longer delays Trained roving agents take care of check-in so that passengers need not wait at the check-in counter a
Roving agents
ON BOARD EXPERIENCE In-flight entertainment Guests have the option of Live TV, Fun TV, 10 Audio Channels, with choices appealing to each segments experience Guests have the choice of opting for vegetarian or non vegetarian meals Menus are designed considering the guest feedback and are frequently changed The crew undergoes rigorous training in safety, first aid, service delivery and personality development before they are cleared to take on the role of hosts on board
Meal options
ON REACHING THE DESTINATION Endeavour the checked-in baggage with the passenger immediately on arrival at the destination Their representatives are available at the arrival lounge should their assistance be needed on account of bulky baggage
Baggage delivery
Delayed/missed baggage
In a situation of misrouted baggage, effort is made to locate and deliver the baggage as soon as possible and deliver is made at the airlines expense
DIFFERENTIATION ORIENTED STRATEGIES WITH EMPHASIS ON Experience The New Generation Coffee Cafes Caf Coffee Day Costa Coffee Starbucks The two main elements of the strategy adopted by the Coffee Cafes are: (i) They choose the lifestyle oriented, well to do, urban consumers as their target, with youth/students as the dominant part. (ii) They make coffee an experience and provide special experience to the chosen segment (iii) The customers of these cafes do not see the coffee as a product or beverage, but as an experience Barista Coffee Barnies Coffee
Differentiating the experience in many innovative ways They give the youths/students an impression that something is always happening in the coffee joints and they should be apart of it Play music of their choice For those focused on coffee proper, the innovation comes through product The cafes nuance the coffee experience suiting the climate
Differentiation Oriented Strategy with Emphasis on Distribution ITCs e-Choupal ITCs e-Choupal is a village internet Kiosk serving 3 purposes ---- Provides information to farmers on crops/weather/prices ---- Sells a variety of products to them ---- Buys various farm products from them for ITCs use ITC developed the e-Choupal model to tackle the distribution challenge and prohibitive distribution costs arising out of ---- fragmented farms ---- weak infrastructure ---- involvement of numerous intermediaries By utilizing the scope of IT, e-Choupal linked the firm directly with the ultimate buyer virtually eliminating wasteful intermediation and multiple handling and reducing transaction costs significantly
E-Choupal managed by Local farmers (Village Sanchalaks) Sanchalak aggregates the demand for various products E-mails the order to ITC Items are picked up by the Sanchalak at the ITC warehouse hub and supplied to the consumers Or it is delivered to the villagers by the local middleman (Samyojak) co-opted by ITC
Feature of e-Choupal
ITC sells its products to the farmers and buys agri-products from them
LOREAL LOREAL :
The worlds biggest company in cosmetics also selling Maybelline cosmetics, Garnier Shampoos, Lancome perfumes The LOreal range has premium position and is marketed through high power advertising Garnier is promoted using celebrity advertising
PROMOTION STRATEGY
Aishwarya Rai has been the Brand Ambassador The campaigns are aired during prime time on channels like Zee and Star The ads/message do not list out any product attributes; instead splashing the beautiful hair the celebrity film star just says Because you are worth it
DINESH SUITINGS
DINESH SUITINGS
PROMOTION STRATEGY
In its advertising campaign, an aura is built around the brand by using Sunil Gavaskar as the model. The brand and the prestige of the models are nicely combined in the ads. The punch line reads; Dinesh suitings. the world in your stride
Reid & Taylor also uses the Prestige approach for differentiation, with even more telling effect Here James Bond is the prestige endorser The ad message links the prestige of Bond and the brand
PROMOTION STRATEGY
--- Reid & Taylor. The legend of a cloth --- James Bond . The legend of a man --- Luxury Suitings.. Bond with the best The suiting is a legend like the endorser, not a piece of cloth
COCA-COLA COCA-COLA
Provides a classic example of a differentiation oriented marketing strategy. It has a great sway on the minds of millions of consumers round the globe
The company has carried out a sustained high budget promotion effort over the decades Top rung film stars and sportsmen were consistently used inn its campaigns run through all possible media TV, print, outdoors and events to sustain the image built around the brand and keep it contemporary
PROMOTION STRATEGY
Coke was positioned as a welcome image rather than a drink -- Coca-Cola makes good things better --- Things go better with coke --- Its the real thing Coke is presented more as a sensation than a product
PEPSI
Like Coke, Pepsi gives maximum thrust to promotion
PEPSI
To counter the leader, new themes will figure from time to time in the promotion campaigns Pepsi is heavily banking on celebrity advertising and sponsorship of world sports events as its major marketing weapon Pepsi cashes in on the cricket frenzy using the cricketers and film stars to project their brand image Neither Coke nor Pepsi pitch on the properties of their respective colas
PROMOTION STRATEGY
NIKE NIKE
The marketing is built wholly around brand name and promotion Nike has been projecting the image of a winner and high performer by using sports stars from Michael Jordan and John McEnroe in 1970s till Roger Federrer today Nike and success go together. That is the equation between the brand and whoever uses it
PROMOTION STRATEGY
You are made to feel that by wearing Nike, you are in the league of those very special sports personalities you admire In addition to regular high budget ad campaigns, Nike puts its logo, the swoosh on every possible medium/vehicle--- MP3 players, watches, walkie talkies, and even portable heart monitors
HOMOGENOUS PREFERENCES
DIFFUSED PREFERENCES
CLUSTERED PREFERENCES
Executive class in the cities as a distinct segment among passenger car buyers Segmentation & Targeting This group formed the core of the compact car segment It was owner driven segment, mostly It looked for driving comfort much better than what was provided by Maruti 800
Positioning
The offer
It tried to provide in the car what this segment looked for mainly a good driving positioning lending to smooth driving and a good pick up to acceleration
An example of effective STP Maruti ensured that the three STP steps connected rightly and that the offer marched the STP Strategy . It ensured that the value proposition too matched the STP and the offer actually offered on the value proposition and the communication conveyed the adequately
Hundai proceeded with its STP Strategy more or less in the same way as Maruti did Segmentation & Targeting Hundai found that the executive group within the compact segment, was a good target to aim at It also found that the segment matched its own capabilities and ambitions
An example of effective STP The STP had smoothly led to the value proposition and the offer delivered on the value proposition. The buyers did perceive it as a good city car as its torque was nicely matched to the speeds envisaged on city drives. The good revvy nature of the engine contributed to superior performance