SEGMENTING and TARGETING DIVIDE AND RULE Dilbert Comic Strip Is segmenting markets a “good marketing thing”? Slide 9-25 HLL expands Pears soap to kids segment Himalaya Herbal Healthcare serves a growing niche market(FMHG) Taking women on a ride (Bajaj Wave DTS-i) Titan Watches: Time to tap the potential of different segments Titan Edge – the world’s slimmest watch; Nebula – in solid gold and precious stones; the Gold and Steel collection; Raga 9 to 5 – for the woman achiever; Flip – India’s first and only reversible watch with two movements and dial faces; and Fastrack in the sporty casual category. What segments are being targeted? • Nokia cell phones Company has divided its customers into different segments based on their involvement levels ,product usage, income level and lifestyle Product offerings under four broad heads: Live, Connect, Achieve and Explore. "While the 'Connect' category phones would appeal to someone whose requirements are very simple and basic, the N-series multimedia phones would fall under the 'Explore' category,” In the Indian context, the 1,100 range of phones would fit under the 'Connect' category where the emphasis is on the phones being simple and user friendly. Similarly, the Nokia E-series instruments have been classified for the 'Achieve' users for whom the phone is far more than just something you use to make calls. Soft drink preferences—some segmentation variables Preferred taste: Cola, lime, no taste, natural juice, ice tea Calorie/taste tradeoff: taste more important, some importance of both, will sacrifice taste for low calories Usage occasion: Multi-pack for home; single can/bottle; fountain drink Price sensitivity/brand loyalty: Willingness to pay more for brand Some combined segments: 1.Price sensitive, non-brand loyal ,cola-taste, full-flavor segment, multi-pack 2.Price insensitive, cola taste, brand loyal, low calorie, multi-pack 3.Price insensitive, natural juice, taste sensitive, single serving • Market Segmentation Division of the total market into smaller, relatively homogeneous groups • No single marketing mix can satisfy everyone. Therefore, separate marketing mixes should be used for different market segments. Steps in Market Segmentation, Targeting, and Positioning Step 1. Market Segmentation Bases for Segmenting Consumer Markets Geographic Nations, states, regions or cities Demographic Age, gender, family size and life cycle, or income Psychographic Social class, lifestyle, or personality Behavioral Occasions, benefits, uses, or responses Step 1. Market Segmentation Levels of Market Segmentation Mass Marketing Same product to all consumers (no segmentation) Segment Marketing Different products to one or more segments (some segmentation) Niche Marketing Different products to subgroups within segments ( more segmentation) Micromarketing Products to suit the tastes of individuals or locations (complete segmentation) Response-based segmentation: Putting the horse before the cart “Urban India is getting saturated. In the cities, everyone who can afford a television has one. If you want to maintain high growth, you have to penetrate into rural India.” - K. Ramachandran, Chief Executive Philips Electronics India Step 1. Market Segmentation Requirements for Effective Segmentation Measurable • Size, purchasing power, profiles of segments can be measured. Accessible • Segments must be effectively reached and served. Substantial • Segments must be large or profitable enough to serve. Differential • Segments must respond differently to different marketing mix elements & actions. Actionable • Must be able to attract and serve the segments. Step 2. Market Targeting Evaluating Market Segments • Segment Size and Growth – Analyze sales, growth rates and expected profitability. • Segment Structural Attractiveness – Consider effects of: Competitors, Availability of Substitute Products and, the Power of Buyers & Suppliers. • Company Objectives and Resources – Company skills & resources relative to the segment(s). – Look for Competitive Advantages. Five patterns for target market selection FIGURE 9-5 Selecting a target market for your fast-food restaurant next to an urban university (target market is shaded) Slide 9-32 FIGURE 9-6 Advertising actions to reach specific student segments Slide 9-36 FIGURE 9-A Market-product grid showing the size of markets for pillows for three different segments of sleepers Task What segments are being targeted? • Reebok • Mc Donalds You can please some people all of the time and all people some of the time, but you cannot please all people all of the time.