Download Topic:- Levels of Market Segmentation

Topic:- Levels of Market Segmentation
Some claim that mass marketing id dying and most companies are turning to micromarketing at one of the 4
levels
4 levels :1.
2.
3.
4.
Segments Marketing
Niches Marketing
Local areas Marketing
Individuals Marketing / customerization
Segments Marketing
A market segment consists of a group of customers who share a similar set of needs & wants .
Groups can be distinguished & segment can be formed on basis of needs & wants for the same product :- for
ex:- car buyers :(1) low-cost basic transport
(2) Luxurious driving experience
(3) Trill
(4) Performance
Market segments can be defined by the way of preference segments . There will be 3 patterns emerging :a) Homogeneous Preferences :- consumers have roughly same preference
b) Diffused Preferences:- consumers vary greatly in their preference
c) Clustered Preferences:- consumers might revel distinct preference clusters (also called natural market
segments)
Creaminess
Creaminess
Creaminess
Basic Market-Preference Patterns
Ex:- ice-cream buyers
Sweetness
(a) Homogeneous
Sweetness
(b) Diffused
Sweetness
( c) Clustered
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Niche Marketing
A niche is a more narrowly defined customer group seeking a distinctive mix of benefits . for ex:- auto
insurance for risky drivers – high premium , high price coverage etc .
Characteristics of niche marketing :1. Customers group with distinctive needs
2. Not likely to attract other competitors
3. Gains through specialization
4. Small & normally attract only one or two competitors
Niche marketers presumably understand their customers needs so well that the customers willingly pay a
premium or higher prices . Globalization has facilitated niche marketing . The Global niche leaders are called as
“Hidden Champions” :- these hidden champions are
- found in stable markets
- mostly family owned or closely held & long lived
- dedicated to their customers
- Offer superior performance
- Responsive service
- Punctual delivery
- Customer intimacy
Local Marketing
Also called as target marketing , it leads to marketing programs tailored to the needs & wants of local customer
groups . ex:- Food stores in Gujarat will have thepla but food stores in north or south of India will not have
them .
Local marketing reflects a growing trend called grassroots marketing . Marketing activities concentrated on
getting as close & personally relevant to individual customers as possible . ex:- sponsorship of local school
teams etc.
Custome rization / Individual Marketing
Customerization can be derived from mass customization which empowers consumers to design the product &
service offering of their choice .
A company is cusomerized when it is able to respond to individua l customers by customizing its products
,services, & messages on a one-to-one basis . Customization is certainly not for every company :
Customization can raise the cost of goods by more than the customer is willing to pay . ex:- DeBeers :- Design
your Own Ring Program
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Topic:- Segmenting Consume r Markets
The major segmentation variables- Geographic Segmentation
- Demographic Segmentation
- Psychographic Segmentation
- Behavioral Segmentation
Geographic
City or metro size
Age
Demographic
Density
Climate
Family Size
Family Life Cycle
Psychographic
Lifestyle- sports oriented,
culture oriented.
Personality-ambitious etc.
Gender
Income
Occupation
Education
Behavioral
Occasions
Benefits
User status – ex-user,first
time, regular , potential
user
Usage ratelight,medium,heavy
Loyalty status
Readiness Stage- unaware,
aware, informed
Attitude toward product –
enthusiastic, positive,
hostile .
Religion
Race
Generation
Nationality
Social Class
Topic:- Bases for Segmenting Business Markets
Serving companies on basis of these segmenting :Demographic
Ope rating
Purchasing
Situational Factors
Variables
Approaches
Personal
Characteristics
Industry
Technology
Purchasing-function org
Urgency
Company
User status
Specific Application
Location
Customer capabilities-few
or more services
Power structure –
engineering dominated,
financially dominated
Nature of existing
relationship
General purchase policies
– leasing, contracts,
bidding etc,
Purchasing Criteria –
quality, price, service
Buyer-seller value
similarity
Attitude towards risk
Size of order
Loyalty
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Topic:- Market Targeting
Once the firm has identified its market –segment opportunities , it has to decide how many & which o nes to
target.
Market segments must rated on 5 criteria :- Segmentation Criteria
1.
2.
3.
4.
5.
Measurable :- Size, purchasing power etc
Substantial :- large & profitable enough to serve .
Accessible :- can be effectively reached & served
Differentiable :- respond differently then only segments will be distinguished .
Actionable :- effective prg’s can be formulated to attract & serve the segments .
Evaluating & Selecting the Market Segments
Evaluating Different Market segments , the firm must look at 2 factors
(a) Overall Attractiveness – based on the above 5 criteria
(b) Company’s Objectives & Resources
5 Pattern of Target Market Selection
1.
2.
3.
4.
5.
SINGLE –SEGMENT CONCENTRATION
SELECTIVE SPECIALIZATION
PRODUCT SPECIALISATION
MARKET SPECIALIZATION
FULL MARKET COVERAGE
1. SINGLE-SEGMENT CONCENTRATION :-
-
M1 M2 M3
P1
P2
P3
firm gains strong knowledge about of the segments needs
Achieves a strong market presence
Specialization in production, distribution & promotion
Segment leadership
High return on investment
Risk/ limitations
- competition may invade/capture the segment :- digital camera captured the mkt of poloroid’s
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2. SELECTIVE SPECIALIZATION
M1 M2 M3
P1
P2
P3
-
There may be little or no similarities between the segments
Each segment is moneymaking
Multisegment Strategy
Diversify the firms risk
3. PRODUCT SPECIALIZATION
M1 M2 M3
P1
P2
P3
-
Firm makes a certain product that it sells to several different market segment
Limitation /Risk :- product may become obsolete by new technology
4. MARKET SPECIALIZATION
M1 M2 M3
P1
P2
P3
-
Firm concentrates on serving many needs of a particular customer group .
5. FULL MARKET COVERAGE
M1 M2 M3
P1
P2
P3
- Firm attempts to serve all customer groups with all the products they might need .
- Taken up mostly by very large firms
2 broad ways :(a) Undifferentiated Marketing
(b) Differentiated Marketing
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