IDENTIFYING MARKET SEGMENTS, TARGETING AND POSITIONING (UNIT 2) MARKETING


 

`✋ Why segment the market?

Ans. All the customers aren't the same; they differ in terms of their needs, wants, and demands, price- sensitivity; buying behavior; product usage style, and frequency. Therefore the same product and marketing strategy will not suitable for all the customers.

👉 Marketing segment 

-A group of customers who share a similar set of needs and wants.

- A group of potential buyers who share one or more characteristics such as need, want, buying behavior, price.

-Dividing a market into distinct groups of buyers based on

  • Needs
  • Characteristics or
  • Behavior

👉Reasons for Market Segmentation

  • Cannot appeal to all buyers
  • Large scattered buyers
  • Varying needs & buying practices
  • Companies have differing abilities to serve different segments
👉Levels of Marketing

1. Mass Marketing

Mass marketing is a market strategy in which a corporation tries to disregard variations in the market segment and cater to the whole market with one offer or one strategy, promoting the concept of broadcasting a message that can reach as many people as possible.

2.Segment Marketing

A market segment is a group of individuals, grouped together for marketing purposes, who share one or more similar features. Each consumer segment is specific, and to establish a target market for their product or service, marketers use different criteria.

3.Niche Marketing

Niche marketing is a technique for an advertisement that focuses on a specific target market. This approach focuses solely on one audience, a niche market or demographic of potential buyers who will most profit from the deals, instead of appealing to anyone who might benefit from a product or service.

4.Micromarketing

Micromarketing is a marketing technique in which a tiny group of closely targeted customers are focused on marketing and/or advertisement activities. Markets, for instance, maybe divided into small clusters based on loyalty to a product class or willingness to buy a specific brand.

👉Segmenting Consumer markets



1. Geographic segmentation

Dividing a market into different geographical units such as
  • Nations
  • States
  • Regions...
  • Cities etc
2. Demographic segmentation

Dividing the market into groups based on demographic variables such as
  • Age & life cycle
  • Gender
  • Family size
  • Family life cycle
  • Income
3.Psychographic segmentation

Dividing the market into different groups based on - Social class: Groups with similar goals, Opinion leaders.

  • Lifestyle: Healthy, Casual/Unhealthy, Active
  • Personality characteristics
4. Behavioral segmentation

 Dividing the market Into different groups based on

  • Consumer knowledge, Eg. Airtel / JIO broadband packages - time-based, & usage-based
  • Attitude, Eg. Attitude towards movie /entertainment differential pricing for different timings
  • Use or response to product-mobile phones / different category of users: Students, Housewives/Company executives at different levels/ Business owners, etc.
✋ Market Targeting

👉Evaluating market segment

By looking at the number of potential buyers in the segment, their income, and the number of individuals in the segment who need the kind of product you sell, you will evaluate the market potential of a segment.

Long term segment attractiveness can get impacted due to the following factors:-
  • Aggressive competitors
  • Substitute product
  • Power of buyer
👉Selecting a market segment

Three alternative market coverage strategies:-
  • Undifferentiated marketing- Undifferentiated marketing happens when a company produces one advertisement for the entire audience, with the same message seen by all segments. For it to cater to such a wide variety of people, this generally means the message is more general.
  • Differentiated marketing - When an organization produces promotions that appeal to two or more distinct target markets, ages, or marketing segments, differentiated marketing happens. A brand can grow its customer base, master its niche, and begin to organically build brand recognition by targeting numerous well-defined customer profiles.
  • Concentrated marketing - Concentrated marketing is a method of repositioning a product or service into limited, lucrative, and homogeneous segments of the market that have been generally overlooked or neglected by others (Kotler and Armstrong, 2009). Concentrated marketing is also argued to be appropriate for small businesses.
👉 Choosing market coverage  strategies

1. Company resources
Example:- Limited resources- concentrated marketing becomes more relevant.

2 Product variability
Example:- Undifferentiated marketing is more suited for uniform products like grapefruits or steel.

3. Product life cycle stage
New product introduction stage-practical to launch only one version and use undifferentiated and concentrated marketing.

4. market variability
If most buyers have the same taste, react the same way to marketing efforts- undifferentiated marketing becomes appropriate.

5. competitors marketing strategies
When competitors use differentiated or concentrated marketing - undifferentiated marketing can be suicidal,

✋What is positioning?

Positioning is the idea of associating the brand and its goods and services with and developing a mental position in the public consciousness. Since minds are so full of data, choosing a unique location in the mind becomes crucial.

👉 Product segmentation

Product segmentation includes a group of products that serve a similar market and have similar characteristics or attributes. Put it even easier; it is an opportunity for you to recognize and meet the needs of several consumers within a given sector that have similar but different requirements.

👉Competitive advantage 

Competitive advantage refers to variables that enable a business to manufacture products or services better or cheaper than its competitors. Compared to its business rivals, these factors allow profitable entity to produce more revenue or superior margins.

👉Identify possible competitive advantages

1. Product differentiation
  • Consistency in quality
  • Durability
  • Reliability
  • Reparability
2. Services delivery
  • Speedy delivery
  • Convenience
  • Safety
3. Channel differentiation
  • Coverage
  • Expertise
  • Performance
4. People differentiation
  • Hiring and training better place
5. Brand image differentiation
  • McDonald's golden arch
✋Effective Segmentation Criteria
  • Measurable 
  • Substantial 
  • Accessible 
  • Differentiable 
  • Actionable
1.Measurable 

Measurable refers to the fact that segments need to be calculated in terms of market size, purchasing power and profiles. It is also hard to calculate such segmentation variables. - If you take demographic factors such as age, schooling, income, etc. as segmentation variables, then it needs to be measurable.

2. Substantial

Substantial refers to the fact that there are broad or lucrative enough business segments to represent. - Some industries have one or two buyers, but these customers may sell vast quantities of their goods to marketers.

3. Accessible

Accessible refers to the fact that it is possible to efficiently meet and satisfy consumer segments.

4. Differentiable

Differentiable relates to the fact that the segments are functionally distinguishable (separable from each other) and react to various elements and programmes of the marketing mix differently.

5. Actionable

Actionable relates to the fact that successful systems for the attraction and operation of the segments can be planned and implemented.

✋Point of parity (POP)

A point of purchase (POP) is a term used when organising the positioning of consumer goods by advertisers and retailers, such as product displays strategically positioned in a food store aisle or displayed in a weekly flyer.

✋Point of difference (POD)

The point of difference refers to the distinguishing factors of goods or services. Differentiation is the manner in which a business's products or services vary from its rivals. Improved customer advantage and brand loyalty can be measures of the success of the point of difference.


EX:-


✋Straddle Positioning

Straddle Positioning is one of the positioning techniques embraced by marketers to simultaneously place their product in two categories. In other words, the positioning approach implemented in the minds of the consumer to create a dual picture of the product is referred to as Straddle positioning.


















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