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FT FOCUS
SUNDAY CEYLON FT
SUNDAY 18 MARCH 2012 | CEYLON TODAY
Why segmentation?
By Chiara Ramachandra
“Feel good, look good and get more out
of life” – is the Unilever vision.
150 million times a day, someone
somewhere chooses a Unilever product.
From feeding your family to keeping your
home clean and fresh, Unilever brands are
part of everyday life.
With 400 brands spanning 14 categories
of home, personal care and food products,
no other company touches so many
people’s lives in so many different ways.
The brand portfolio has made Unilever a
leader in every field in which they work. It
ranges from much-loved world favourites
including Lipton, Knorr, Dove and Omo,
to trusted local brands such as Blue Band
and Sauve.
The company constantly enhances their
brands to deliver more intense,
rewarding product experiences. They
invest £ one billion every year in
cutting edge research and
development and have five
laboratories around the world that
explore new thinking and techniques
to help develop its products.
Segmentation gives
a clear understanding of the customers
and the difference that
exist between them.
This understanding
helps to fine tune the
marketing mix so as to
satisfy each segment
perfectly
Consumer research plays a vital role
in their brands’ development. They
constantly develop new products and
developing tried and tested brands to
meet changing tastes, lifestyles and
expectations and their strong roots in
local markets also mean they can
respond to consumers at a local level.
(i)
First launched in France in 1983,
the leading male grooming brand, Axe,
now gives guys the edge in the mating
game in over 60 countries.
(ii) The oral care brands Mentadent,
Pepsodent and Signal have teamed up with
the World’s largest dental federation, the
FDI which represents over 750,000
dentists around the world.
(iii) Lux became the first massmarketed soap when it launched in 1924.
Today it achieves annual global sales of £
one billion.
(iv) Recent breakthroughs at Rexona
include Rexona Crystal, a deodorant that
eliminates unsightly white deposits on
dark garments.
2.Food
(i)
Knorr is the biggest food brand
with a strong presence in over 80 countries
and a product range including soups,
sauces, bouillons, noodles and complete
meals.
(ii) Lipton’s tea – based drinks
include the international Lipton iced tea –
range, the Lipton range in North America
and Lipton Yellow Label, the world’s
favourite tea brand.
(iii) Becal/Flora pro active products
have been recognized as the most
significant advancement in the dietary
management of cholesterol in 40 years.
Unilever culture also embodies vitality.
Adding Vitality to life requires the highest
standards of behaviour towards everyone
they work with, the communities they
touch and the environments on which
they have an impact.
1.
Geographic Segmentation – The
market is divided in to different locations –
nations, states, countries, cities or
neighbourhoods. The organization
recognizes that market potentials and
costs vary with market location.
2.
Demographic Segmentation –
The market is subdivided into different
parts on the basis of demographic
variables – age, sex, family size, income,
occupation, education, family life cycle,
religion, nationality. Demographic
variables are easier to measure than
most other types of variables.
4.Behavioural
Segmentation – Marketers use
behavioural variables to segment
markets. Such variables include
knowledge, attitude, and use of
response to a product.
Segmentation of Brands
Health and Personal Care
Basis for market segmentation
3.Psychographic
Segmentation – Marketers divide
the buyers into several groups on
the basis of social class, life style
and/or personality characteristics.
Lifestyles shape the interest of
people in various goods.
Continuous Development
1.
would not pay, for example, for an
automobile manufacturer to develop
special cars for midgets.
Market segmentation
Market segmentation represents an
important recent advance in marketing
thinking and strategy. Market
segmentation is the subdividing of a
market into distinct subsets of customers,
where any subset may conceivably be
selected as a market target to be reached
with a distinct marketing mix. The power
of this concept is that in an age of intense
competition for the mass market,
individual sellers may prosper through
developing offers for specific market
segments whose needs are imperfectly
satisfied by the mass-market offerings.
Requirements for effective
Segmentation
1.
Measurability – The degree to
which the size and purchasing power of
the resulting segments can be measured.
Certain segmentation variables are hard to
measure. E.g: The size of the segments of
automobile buyers who are primarily
motivated by automobile styling or by
performance.
2.
Accessibility – The degree to
which the resulting segments can be
effectively reached and served. It would be
helpful if advertising could be directed
mainly to the segment of opinion leaders,
but their media habits are not always
distinct from those of opinion followers.
3.
Substantiality – The degree to
which the resulting segments are large
and/or profitable enough to be worth
considering for separate marketing
attention. A segment should be the
smallest unit for which it is practical to
tailor a separate marketing programme.
Segmental marketing is expensive. It
5.
Occasion Segmentation
– Customers may be divided
according to occasions when they
develop needs, purchase products
to satisfy the needs or use the products to
satisfy needs.
6.
Benefit Segmentation – This is
also a useful and effective method of
segmentation and customers are
segmented on the basis of different
benefits they seek from the product. It
requires determination of major benefits
people seek from a product class, the kind
of people who look for each benefit and
the principal brands offering each benefit.
Benefit segmentation, thus, implies
satisfying one benefit group. This can be
done by developing a unique selling
proposition (USP).
7.
Volume Segmentation –
Segmentation of markets may also be
done on the basis of volume of usage (rate
of usage) of a product. The markets may
be segmented into light, medium and
heavy user groups.
8.
Segmentation according to
attitude of people – A market may be
segmented by classifying people in it
according to their enthusiasm for a
product. Thus, five classes may be seen
enthusiastic, positive, indifferent, negative
and hostile. While people with
enthusiastic and positive attitudes seem to
be the best prospects, the negative and
hostile attitude people are just the
opposite.
Advantages of segmentation
•
Segmentation gives a clear
understanding of the customers and the
difference that exist between them. This
understanding helps to fine tune the
marketing mix so as to satisfy each
segment perfectly.
•
It also exposes gaps in the
market, E.g.: it shows groups that are not
being presently satisfied with the available
products. The whole concept of niche
marketing is based on segmentation.
E.g.: Sony Walkman, Mlesna Tea
Centre (the concept of value added gift
packed tea in various pack forms such as
ceramic and wooden ornaments.)
Buyers have unique needs and wants,
each buyer is potentially a separate
market. Ideally, then, a seller might design
a separate marketing programme for each
buyer. However, although some
companies attempt to serve buyers
individually, many others face larger
numbers of smaller buyers and do to find
complete segmentation worthwhile.
Instead, they look for broader classes of
buyers who differ in their product needs or
buying responses.
A company that practices segment
marketing recognizes that buyers differ in
their needs, perceptions, and buying
behaviours. The company tries to isolate
broad segments that make up a market and
adopts its offers to more closely match the
needs of one or more segments. Thus,
General Motors has designed specific
models for different income and age
groups. In fact, it sells models for
segments with varied combinations of age
and income. For instance, GM designed
its Buick Park Avenue for older, higher
income consumers.
Segment marketing offers several
benefits over mass marketing. The
company can market more efficiently,
targeting its products or services, channels
and communication programmes towards
consumers that it can serve best. The
company can also market more effectively
by fine – tuning its products, prices and
programmes to the needs of carefully
defined segments. The company may face
fewer competitors if fewer competitors are
focusing on this market segment.
With dozens of brands in the
marketplace, Procter and Gamble offers
an array of consumer products with
dazzling success. In the United States
alone, P&G offers seven brands of laundry
detergent, three Brands of deodorant and
two brands each of fabric softener,
cosmetics and disposable diapers. In each
of these categories, P&G’s products
compete against each other, as well as with
products offered by other companies, for
share of the customer’s wallet.
Marketing is not a routine task. Nor is it
a cone-time task. The marketing man can
never snuggle down in his chair saying 'It’s
over'. It’s never over! An entirely new set
of situations may hit from any time. He is
operating in an ever changing and ever –
challenging world. The capacity for
managing all such change, must form an
inbuilt part of the marketing strategy
because marketing primarily implies
marching ahead under changing
conditions. Strategy should necessarily
help this process. It should enable the firm
to sense and anticipate change, to analyze
and comprehend its implications and to
confront and score over its effects.
(The writer has a MSc in Marketing
(U.K.), DipM, MCIM, Chartered
Marketer, FIAB, MSLIM)