SEGMENTING and TARGETING

DIVIDE AND RULE

Dilbert Comic Strip
Is segmenting markets a
good marketing thing?

Slide 9-25
 HLL expands Pears soap to kids segment

Himalaya Herbal Healthcare serves a growing

niche market(FMHG)

Taking women on a ride

(Bajaj Wave DTS-i)

Titan Edge the worlds slimmest watch;

Titan Watches: Time to tap the
potential of different segments
Nebula in solid gold and precious stones; the
Gold and Steel collection; Raga 9 to 5 for the
woman achiever; Flip Indias first and only
reversible watch with two movements and dial
faces; and Fastrack in the sporty casual
category.
What segments are being targeted?
Nokia cell phones
Company has divided its customers into different segments based on their
involvement levels ,product usage, income level and lifestyle
Product offerings under four broad heads: Live, Connect, Achieve and Explore.
"While the 'Connect' category phones would appeal to someone whose
requirements are very simple and basic, the N-series multimedia phones would fall
under the 'Explore' category,
In the Indian context, the 1,100 range of phones would fit under the 'Connect'
category where the emphasis is on the phones being simple and user friendly.
Similarly, the Nokia E-series instruments have been classified for the 'Achieve' users
for whom the phone is far more than just something you use to make calls.
Soft drink preferencessome segmentation variables
Preferred taste: Cola, lime, no taste, natural juice, ice tea
Calorie/taste tradeoff: taste more important, some
importance of both, will sacrifice taste for low calories
Usage occasion: Multi-pack for home; single can/bottle;
fountain drink
Price sensitivity/brand loyalty: Willingness to pay more for
brand

Some combined segments:

1.Price sensitive, non-brand loyal ,cola-taste,
full-flavor segment, multi-pack
2.Price insensitive, cola taste, brand loyal, low
calorie, multi-pack
3.Price insensitive, natural juice, taste
sensitive, single serving
 Market Segmentation
Division of the total market into smaller,
relatively homogeneous groups

No single marketing mix can satisfy everyone.

Therefore, separate marketing mixes should
be used for different market segments.
Steps in Market Segmentation,
Targeting, and Positioning
 Step 1. Market Segmentation
Bases for Segmenting Consumer Markets

Geographic
Nations, states,
regions or cities

Demographic
Age, gender,
family size and
life cycle, or
income
Psychographic
Social class, lifestyle,
or personality

Behavioral
Occasions, benefits,
uses, or responses
Step 1. Market Segmentation
Levels of Market Segmentation
Mass
Mass Marketing
Marketing
Same
Sameproduct
productto
toall
allconsumers
consumers
(no
(nosegmentation)
segmentation)

Segment
Segment Marketing
Marketing
Different
Differentproducts
productsto
toone
oneor
ormore
moresegments
segments
(some
(somesegmentation)
segmentation)

Niche
Niche Marketing
Marketing
Different
Differentproducts
productsto
tosubgroups
subgroupswithin
withinsegments
segments
((more
moresegmentation)
segmentation)

Micromarketing
Micromarketing
Products
Productsto
tosuit
suitthe
thetastes
tastesof
ofindividuals
individualsor
orlocations
locations
(complete
(completesegmentation)
segmentation)
 Response-based segmentation:
Putting the horse before the cart
Urban India is getting saturated. In the cities,
everyone who can afford a television has one.
If you want to maintain high growth, you have
to penetrate into rural India.
- K. Ramachandran, Chief Executive Philips
Electronics India
Step 1. Market Segmentation
Requirements for Effective Segmentation

Measurable
Measurable Size, purchasing power, profiles
of segments can be measured.

Accessible
Accessible Segments must be effectively
reached and served.

Substantial
Substantial Segments must be large or
profitable enough to serve.

Differential
Differential Segments must respond
differently to different marketing mix
elements & actions.

Actionable
Actionable Must be able to attract and serve
the segments.
 Step 2. Market Targeting
Evaluating Market Segments

Segment Size and Growth

Analyze sales, growth rates and expected profitability.

Segment Structural Attractiveness

Consider effects of: Competitors, Availability of Substitute Products
and, the Power of Buyers & Suppliers.

Company Objectives and Resources

Company skills & resources relative to the segment(s).
Look for Competitive Advantages.
Five patterns for target market
selection
FIGURE 9-5 Selecting a target market for
your fast-food restaurant next to an urban
university (target market is shaded)

Slide 9-32
FIGURE 9-6 Advertising actions to reach
specific student segments

Slide 9-36
FIGURE 9-A Market-product grid showing
the size of markets for pillows for three
different segments of sleepers
 Task
What segments are being targeted?
Reebok
Mc Donalds

You can please some people all of the time

and all people some of the time, but you
cannot please all people all of the time.