Target Market A target market is a group of customers that the business has decided to aim its marketing efforts and ultimately its merchandise

Rolls-Royce Rolls-Royce Example

Commercial

Market segmentation is the division of A market into different groups of customers with distinctly similar needs and product/service requirements. Market segmentation is the division of a mass market into identifiable and distinct groups or segments, each of which have common characteristics and needs and display similar responses to marketing actions.

1 Formation And Profiling Segments 2 Evaluation Of The Market Segments Evaluation Of The Market Segments 3 Selection Of Segmentation Strategy Market segmentation Activities

Values/ Lifestyle Measure Needs or Desired and benefits Purchase Behavior Classifying Characteristics

1. Needs/ Benefits Sought Needs and benefits are the characteristics or attributes of product that consumer seeks or consider important. Example: Nokia Mobiles

Needs/ Benefits Sought i.Multi-Item Scale: To know how important or unimportant each benefit is to consumer. ii.Conjoint Analysis: the qualities of product or service that are most desired by the customers. a) Identification of Relevant Behavior b) data Collection c) Data Analysis

Conjoint Analysis 33 Analyze the Data. Data Analysis: To specify which attribute is important to study; e.g: Pizza Hut (Price, Delivery Time, Type of Crust or Split Toppings) To specify which attribute is important to study; e.g: Pizza Hut (Price, Delivery Time, Type of Crust or Split Toppings) Identification of Relevant Behavior Identification of Relevant Behavior 1 1 Collect the data by given level Collect the data by given level Data Collection: 2

Data about customer purchases and transactions provides scope for analyzing who buys what, when, how often, how much they spend, and through what transactional channel they purchase. This provides very rich data for identifying ‘profitable’ customer segments. When and where consumed The nature of situation What type The quantity consumed Brand color, and size

EXAMPLE: BEHAVIORAL MEASURES Rooh Afza in Ramazan

3. Values/ Lifestyle Measure Analyzing consumers’ activities, interests, and opinions, we can understand individual lifestyles and patterns of behavior, which in turn affect their buying behavior and decision-making processes. On this basis, we can also identify similar product and/or media usage patterns.

4. Classifying Characteristics Key variables concern age, sex, occupation, level of education, religion, social class, and income characteristics, many of which determine a potential buyer’s ability to purchase a product or service. Demographic

In many situations the needs of potential customers in one geographic area are different from those in another area. This may be due to climate, custom, or tradition. Geographic Geographic

Commercial

Evaluate the Market Segments The market segments are studied against the five criteria: 1 Uniqueness 2 Responsiveness 3 Actionability 4 Stability and 5 Profitability

Uniqueness refers to large between- group differences in the segments. The best basis for forming market segments is to creates segments that are more unique. The objective is to achieve competitive power. The more unique the segments are, the easier It is to translate the segmentation result into strategic and tactical actions. Uniqueness

If specific strategies and tactical actions are made for the specific segment, it is expected that the segment would be more responsive to those actions than other segments. For example Pleasure travelers may respond to price change whereas business travelers may not. Responsiveness

Actionability is the extent to which the manager can take action on the results of the segmentation analysis. Actionability expresses the notion that the segment targeted must be of an appropriate size for the company. For Example A need-based segment is made to cater a particular group of patients. Actionability

The segment should be stable over time with respect to desired end benefits and classification factors. It is not necessary that same people remain in the segment. People with the needs identified by the segment should have same classification characteristics. Stability

The segment should have enough potential to contribute towards the organization’s objective and purpose of existence. Profitability

The last step in segmentation is to select a segmentation strategy. It must be decided whether to take mass marketing approach or segmented approach. Segmented approach is further divided as single segment approach or multiple segment approach. Single segment: Porsche Multiple segment: Chevrolet, Toyota Segment Strategy

Examining Competitive Market Forces.

Examining Competitive Market Forces. (Emphasis on first three) What are the fundamental characteristics of my industry? Who are my competitors? What are the current positions of my competitor? What moves are my competitor most likely to make? What moves can we make to achieve a sustainable competitive advantage? Creating a market profile Perceptual mapping

Examining Competitive Market Forces. Creating a market Profile: Deals with industry characteristics such as: – Size and growth rate of the industry – Substitute products – Suppliers to the industry – Principal customers – Manufacturing and distribution – Barriers to entry – Social and economic conditions affecting the industry Perceptual Mapping: Also known as product positioning map. Who are my competitors & what are their current positions?

Perceptual Map (Fig 4-6) Hill Top Dave’s West View Rusty Scupper High Quality Quiet Pleasant atmosphere Accessibility Wide selection Large portion Low Price Fast Service Perceptual mapping most likely ask consumers to rate brands with more than two attributes

Perceptual Map (Q# 10) CITYTOURISTS Las Vegas8,756 Miami2,620 New York17,411 San Antonio840 San Francisco9,375 Night life Sports Shopping Dining Culture Museum Sightseeing Weather Safety New York Las Vegas Miami San Francisco San Antonio

Perceptual Map (Q# 10) Conclusion:  Further create similar attributes as in the City New York, San Francisco. Such as:  Shopping facilities  Sigh seeing  Museums  Sports & Nightclubs

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