PPT 8.ppt DEALING WITH COMPETITION ANSOFF MATRIX PORTERS ANALYSIS MODEL

MARKETING PRINCIPLES

1. Identifying
Market Segments
and Targets
8
Marketing Management
A South Asian Perspective, 13
th
ed

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Chapter Questions
•What are the different levels of market
segmentation?
•How can a company divide a market
into segments?
•How should a company choose the
most attractive target markets?
•What are the requirements for effective
segmentation?

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Effective Targeting Requires…
•Identify and profile distinct groups of
buyers who differ in their needs and
preferences
•Select one or more market segments to
enter
•Establish and communicate the
distinctive benefits of the market
offering

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Ford’s Model T Followed a Mass
Market Approach

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Four levels of Micromarketing
Segments
Local areas Individuals
Niches

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What is a Market Segment?
A market segment consists of a
group of customers who share a
similar set of needs ad wants.

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Gather.com: A Niche
Social Networking Site

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Flexible Marketing Offerings
•Naked solution:
Product and service
elements that all
segment members
value
•Discretionary
options: Some
segment members
value options but
not all

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Preference Segments
•Homogeneous preferences exist
when consumers want the same things
•Diffused preferences exist when
consumers want very different things
•Clustered preferences reveal natural
segments from groups with shared
preferences

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The Himalaya Drug
Company serves a
growing niche
market by focusing
on ayurvedic
medicines and
health supplements

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The Long Tail
•Chris Anderson explains the long tail
equation:
•The lower the cost of distribution, the more
you can economically offer without having
to predict demand;
•The more you can offer, the greater the
chance that you will be able to tap latent
demand for minority tastes; and
•Aggregate enough minority taste, and you
may find a new market.

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What is Customerization?
Customerization combines operationally
driven mass customization with customized
marketing in a way that empowers
consumers to design the product and service
offering of their choice.

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United Bank
Ltd. of
Pakistan offers
customized
Galleria credit
cards to its
customers

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Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral

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Demographic Segmentation
Age and Life Cycle
Life Stage
Gender
Income
Generation
Social Class

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Bank Al Habib
targets
senior citizens

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Dove Targets Women

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Figure 8.1
The VALS Segmentation System

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Behavioral Segmentation
Decision Roles
•Initiator
•Influencer
•Decider
•Buyer
•User
Behavioral Variables
•Occasions
•Benefits
•User Status
•Usage Rate
•Buyer-Readiness
•Loyalty Status
•Attitude

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The Brand Funnel Illustrates
Variations in the
Buyer-Readiness Stage
•Aware
•Ever tried
•Recent trial
•Occasional user
•Regular user
•Most often used

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Loyalty Status
Switchers
Shifting loyals
Split loyals
Hard-core

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Figure 8.3 Behavioral
Segmentation Breakdown

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The Conversion Model
ConvertibleShallow Average Entrenched
Strongly
unavailable
AmbivalentAvailable
Weakly
unavailable
Users Nonusers

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Segmenting for Business Markets
Demographic
Operating Variable
Purchasing Approaches
Situational Factors
Personal
Characteristics

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Steps in Segmentation Process
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Marketing-Mix
Strategy

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Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable

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Figure 8.4 Patterns of
Target Market Selection

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Figure 8.4 Patterns of
Target Market Selection

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Figure 8.4 Patterns of
Target Market Selection

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The Revolution
brand of ready-
made women’s
apparel
successfully
focuses on the
niche segment of
plus-size clothes.

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Figure 8.5 Segment-by-Segment
Invasion Plan

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Pepsi used Megamarketing in India

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Marketing Debate
Is mass marketing dead?
Take a position:
1.Mass marketing is dead.
or
2. Mass marketing is still a viable way to build
a profitable brand.

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Marketing Discussion
Think of various product categories.
How would you classify yourself
in terms of the various segmentation
schemes?
How would marketing be more or less
effective for you depending upon the
segment involved?