S.No. - 2/4 LECTURE TITLE – MARKET SEGMENTATION & CONSUMER BEHAVIOUR MODULE – 2 (HEALTHCARE MARKETING AND PATIENTS RELATIONS MANAGEMENT 1

ICRI, Mumbai

We have already studied- Levels of market segmentation Segment marketing Niche marketing Local marketing Individual customer marketing

Target marketing A company cannot serve all the customers in a broad market. Customers are numerous and diverse in their buying requirements. So it needs to identify segments it can serve effectively. Sellers distinguishes segments, and develop products and programs tailored to each.

Steps 1) Need based segmentation 2) Segment identification 3) Segment attractiveness 4) Segment profitability 5) Segment Positioning 3) Marketing mix strategy - 5Ps etc 6) Segment acid test

Summary of steps Segment Size and Growth – Analyze current segment sales, growth rates, and expected profitability for various segments. Segment Structural Attractiveness – Consider effects of: competitors, availability of substitute products, and the power of buyers & suppliers. Company Objectives and Resources – Examine company skills & resources needed to succeed in that segment(s). – Offer superior value & gain advantages over competitors.

Step 2. Market Targeting Evaluating Market Segments Segment Size and Growth Analyze current sales, growth rates and expected profitability for various segments. Segment Structural Attractiveness Consider effects of: competitors, availability of substitute products and, the power of buyers & suppliers. Company Objectives and Resources Company skills & resources needed to succeed in that segment(s). Look for Competitive Advantages. 7

Target marketing P1 P2 P3 M1 M2 M3 Single segment concentration- Porsche concentrates only on sports car market. In this form acquires strong knowledge of needs and achieves strong market presence. It also enjoys operating economies through specialising its production, distribution and promotion. It becomes leader and enjoys high return on investment. - Risks involved – a particular market can turn sour

Target marketing Selective specialisation- P1 P2 P3 M1 M2 M3 firm selects a number of segments, each objectively attractive and appropriate. There may be little or no synergy among segments but each promises to be a moneymaker.

Target marketing Product specialisation- P1 P2 P3 M1 M2 M3 firm makes a product that it sells to various segments. Like microscope manufacturer.

Target marketing Market specialization- P1 P2 P3 M1 M2 M3 The firm concentrates on serving many needs of a particular group. An example would be a firm that sells an assortment of products only to universities.

Target marketing -Full market coverage- P1 P2 P3 M1 M2 M3 the firm attempts to serve all the customer groups with all the products they might need. only large firm can undertake full market coverage strategy like coca cola or IBM.

FULL COVERAGE It can be done in 2 ways a) undifferentiated ignores segment difference, and try to appeal whole market. It relies on mass distribution and mass advertising. b) differentiated marketing- The firm operates in several market segments and designs differentiated product for each segment. GM does it as it says it produces car for every- Purse, purpose and personality.

Concerns with targeting Product modification costs- modifying a product to meet different market segment requirements usually involves R&D, engineering. Manufacturing costs:- unless the product is sold in large volume it is expensive to produce different products in varying units. Inventory costs:- it is costly to manage inventories of many products

Promotion costs:- company has to reach different market with different promotion programs Admin costs:- the company has to develop separate marketing plan for each market segment. This requires extra research, analysis, planning, channel arrangement.

Process flow Now we will move to positioning

Positioning Is the act of designing the company’s offering and image to occupy a distinctive place in mind of target market. Sporty drink Bujhaye pyaas baki all bakwaas

Product positioning Strategies By attribute or benefit- sugar free By use or application- easy to use By price or quality- Nirma super By user – Bikes segment. Mileage or race By competitor- coke and pepsi By product or service class-Dalda alternative to ghee. Cheaper and healthier.

Competitive advantage by positioning Product’s Position - the way the product is defined by consumers on important attributes. Product is compared with competing products. Simplifies the buying process by helping consumers organize products into categories. Marketers must: – Plan positions to give their products the greatest advantage in selected target markets, – Design marketing mixes to create these planned positions.

Choosing a Positioning Strategy 20 Step 2. Choosing the Right Competitive Advantage Step 3. Communicating and Delivering the Chosen Position Step 1. Identifying Possible Competitive Advantages

Identifying Possible Competitive Advantages Key to winning and keeping customers is to understand their needs and buying processes better than competitors do and deliver more value. Competitive advantage is an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits, that justify competitive advantage, 21

Identifying Possible Competitive Advantages 22 Services Differentiation i.e. Delivery, Installation, Repair Services, Customer Training Services Product Differentiation i.e. Features, Performance, Style & Design, Attributes People Differentiation i.e. Hiring, Training Better People Than Competitors Do Image Differentiation i.e. Symbols, Characters Channel Differentiation

examples Reliance Mobile- 100 million customers & counting - diverse segments TATA Photon + -positioned ‘speed” as its USP – giant banner with device from an aircraft at Banglore stadium cricket match- grab maximum eyeballs INQ cell phone – Dhoni riding on the back of a truck in a supposedly boring journey. Talks to all his friends – social networks. Positions INQ well among the youngs. TATA ACE – chhota haathi – LAKME’ Fruit Blast- “Kare Aapke chehre ki gahri safia aur lautaye nami lautaye

What 4 major positioning errors should a company strive to overcome? Under positioning- buyers have vague idea of brand. Over positioning- buyers have a narrow image of brand. Confused positioning- company making too many claims or changing brand position frequently. Doubtful positioning- buyers find it hard to believe the brand claims. 24 ISSUES WITH POSITIONING

Choosing the Right Competitive Advantages 25 Criteria For Determining Which Differences To Promote Affordable Superior Profitable Preemptive Distinctive Important Communicable

Selecting an Overall Positioning Strategy 26

Communicating and Delivering the Chosen Position Company must take strong steps to deliver and communicate the desired position to target consumers. All the company’s marketing mix must support the positioning strategy. Positioning strategy must be monitored and adapted over time to match changes in consumer needs and competitors’ strategies. 27

Reviewing the Concepts Three steps of target marketing: market segmentation, market targeting, and market positioning. List and discuss the major levels of market segmentation for segmenting consumer. 28

Explain how companies identify attractive market segments and choose a market-coverage strategy. Discuss how companies can position their products for maximum competitive advantage in the marketplace.