1. U.3-MARKET SEGMENTATION

2. What is a Market? PEOPLE BUT - not just ANY people, they have to have Willingness to buy Purchasing power (money) Authority to buy

3. What is a “Market Segment”? Set of potential customers Who have similar needs Who reference each other when buying Are alike in the way they: Perceive value View products and services Purchase products and services

4. Market Segmentation  Grouping people according to their similarity related to a particular product category  Within a large country  Many different types of people - it is too difficult to create a product that will satisfy everybody, that is why we focus on a segment of the total market

5. Criteria for segmentation Measurable Substantial Accessible Differentiable Actionable

6. Bases for Segmenting Consumer Market Geographic Demographic Age, gender, family size and life cycle, or income Psychographic Social class, lifestyle, personality Behavioral Occasions, benefits, uses, or responses Nations, states, regions or cities

7. Markets: Geographic Variables Region City or metro size Climate Density North, South, East, West etc., Under 4,999; 5,000-19,999; 20,000-49,999... 1,000,000-3,999,999; 4,000,000 and over Tropical, cool, humid, hilly, desert etc., Urban, rural, suburban

8. Markets: Demographic Variables Age Gender Family size Occupation Education Nationality Religion Ethnicity Income

9. Lifestyle Markets: Psychographic Variables Club memberships Social activities TV viewing habits Hobbies Vacation preferences Compulsive Outgoing Authoritarian Ambitious Personality

10. Bases for Segmenting Consumer Markets Geography Region of the world Country Region of the country State City County geographic - based upon where people live (historically a popular way of dividing markets)

11. Behavioral Segmentation Divides the market into groups Knowledge Attitude Use Response to a product

12. Behavioral Segmentation Occasions - Groups individuals according to the occasions when they purchase, use or think of buying a product. Benefits Sought - Groups buyers according to the benefits they seek from the product.

13. Behavioral Segmentation Usage Rate - Groups individuals according to the level of usage they make of the product. User Status - Groups individuals according to whether they are non- users, potential users, first-time users, regular users, or ex-users of a product

14. Behavioral Segmentation Loyalty Status - Groups individuals according to their level of loyalty to the product. Consumers can be loyal towards: Brands – Nokia, Tide Stores – Spencer’s daily, LandMark Companies – TATA motors, Bajaj, Maruti

15. Target Marketing Evaluating Market Segments Segment size and growth Segment structural attractiveness Level of competition Substitute products Power of buyers Powerful suppliers Company objectives and resources

16. Target Marketing Strategies

17. Positioning The place the product occupies in consumers’ minds relative to competing products. Typically defined by consumers on the basis of important attributes.

18. Positioning Choosing a Positioning Strategy: Identifying possible competitive advantages -- many potential sources of differentiation exist: Products Services Channels People Image

19. Possible Value Propositions selecting over all position strategy-value propositions

20. Positioning Choosing a Positioning Strategy: Communicating and delivering the chosen position Entire marketing mix must support the chosen strategy May require changes to the product, pricing, distribution or promotion.

21. Undifferentiated Marketing Single product addressing all segments with a single marketing program. Mass production is possible giving scale economies Pushes price downwards enabling to attract price sensitive segments

22. Differentiated Marketing A separate market offering for every segment Marketing programs for every segment could be different Pushes up costs at various levels, necessitating sufficient volumes for viability Generates inter-segment rivalry