Market

Segmentation
 Overview
 Discover needs/wants of consumer groups
to develop specialized products to satisfy
group needs
 Identify the best media for advertising

 Related concepts (STP)

-Segmentation (subsets with similar needs)

-Targeting (which segment to aim for)
-Positioning (the product in the mind of the
customer)
The Classic Segmentation Variables for
Consumer Markets

FIGURE 7.3
Hindustan Unilever Ltd
(HUL)
 Company Overview
 HUL, the largest FMCG Company in India by revenues was
formed by merging three subsidiaries of Unilever in 1956.

 At present, Unilever Plc holds a 51.6% stake in the

company. HUL’s portfolio of products covers a wide
spectrum including soaps, detergents, skin creams,
shampoos, toothpastes, tea, coffee and branded flour.

 HUL's brands, spread across 20 distinct consumer

categories. It owns 35 major Indian brands. HUL has
consistently had the most number of brands in the Top 10
list for the most trusted brands in India from 2003 to 2009.
 Business Segments
 Soaps and Detergents.

 Personal Care Products.

 Beverages.

 Foods.

 Ice Cream.

 Others.
 Sub Segments on Oral Care
 Toothpastes

 Toothbrushes

 Tooth Powders

 Liquid Mouth Cleansers

 Trends and Forces
 Increasing raw material prices drives HUL to raise its
prices

 Increasing per capita income drives FMCG sector

growth

 Per Capita consumption of personal care products in

India is one of the lowest among developing
economies of the world.

 Highly Competitive FMCG Sector limits profit margins

of HUL.
 Competitors
 Procter and Gamble (P&G) India

 Godrej Consumer Products Ltd. GCPL)

 Dabur India Limited

 Colgate-Palmolive (India) Limited

 Marico Limited
 How Does HUL Practice Market
Segmentation & Positioning?

 Product essentially same

 Promotion (specific promotion
campaigns aimed at the Indian
market
 Place (urban stores, suburban stores,
express stores, etc.)
 Price (junior discounts)
Market Segmentation Decision Process
Stage I - Identify Market Segmentation
Bases
 The process starts when a company looks
at the potential customers and identifies
those customers as having particular
characteristics - these characteristics will
allow the marketing company to classify
them into market segments.

 The segments should be selected so that

you can group together customers who
have similar needs.
Stage II - Develop Relevant Profiles
for each Segment
 Once the segments have been identified -should
develop a profile of the relevant customer needs
and behaviors in each segment.
What does your customer look like
(profile) !!
What do they like !!
What do they do !!
 You need this description to be very precise in
order to make your marketing “match” the
needs of the customer
Stage III - Forecast Market Potentials
 You create a “Forecast” of the market
potential within each segment.

 This is the “go, no-go” stage. When you are

at this stage you gather the information on
sales potential to determine whether you can
go further ahead and justify further analysis.

 Forecast - “what if” - an expectation of

future action.
 Stage IV - Forecast Probably
Market Share
 Once the market potential has been estimated,
you have to determine how much of that market
you can obtain (what “market share” can you
capture.

 Then you develop specific marketing strategy for

the segments you are trying to develop.

 (text eg. P&G outselling Colgate, therefore

Colgate strategy changes so it doesn’t compete
directly)
 Stage V - Select Specific Market
Segments
 Finally,
you take all this information,
and identify specific target markets.

 ie.University students who have part-

time jobs, and do not have credit cards
 Product Positioning
 Developing a marketing program in
such a way that the product is
perceived to be very different from
competitors products
 Levels of Market Segmentation
Through Market Segmentation, Companies Divide Large,
Heterogeneous Markets into Smaller Segments that Can be
Reached More Efficiently And Effectively With Products and
Services That Match Their Unique Needs

Mass Marketing
Same marketing mix (mm) directed at all consumers
(no segmentation, i.e.,Ford Model T )

Segment Marketing
Different marketing mix (mm) to one or more segments
(some segmentation, i.e. GM)
 It is Critical to understand that..
 Mass marketers do not often practice
mass marketing today
 They practice differentiated marketing

 Often they do not change the product

to appeal to different segments
 They change price, place, and
promotion
 Having ID’ed the Targeting Strategy and
Determined Segmentation Variables

 We develop different segment profiles

 Evaluate these for profitability
 And select the target markets we want to enter
 Finally We Position
Market
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