Marketing Management

By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha

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SUMMARY by

Chapter

Identifying Market Segments and Targets

This chapter deals with one of the quintessential concepts of Marketing: STP i.e. Segmentation, Target and Positioning. It explains different levels of Market Segmentation, bases for Segmenting Consumer Markets, choosing target Markets & finally analyses the various requirement for effective segmentation.

Mass Marketing:
The seller engages in mass production, mass distribution and mass promotion of one product for all buyers

Steps in market segmentation, targeting and segmentation, positioning

1. Market Segmentation 2. Target Marketing 3. Market Positioning
Identify bases for segmenting the market Identify Develop segment profiles Develop Develop measure of segment attractiveness Develop Select target segments Select Develop positioning for target segments Develop Develop a marketing mix for each segment Develop

Levels of Market Segmentation: Micromarketing

A. Segment marketing Dividing a market into distinct groups with distinct needs, marketing: characteristics, or wants who might require separate products or marketing mixes. Segment Marketing offers key benefits over Mass Marketing as the company can offer better design, price, disclose and also can fine-tune the marketing program to fine better reflect competitors marketing. B. Niche Marketing A niche is a more narrowly defined customer group seeking a Marketing: distinctive mix of benefits. Marketers usually define niches by dividing segments into sub segments. For e.g. Ezee, the liquid detergent from Godrej is a fabric washing egments. product for woolen clothes.

Chapter 8 - Identifying Market Segments and Targets

C. Local Marketing: Target marketing that involves marketing programs tailored to the needs and wants of local customer groups in trading areas, neighborhoods and even individual stores is called as Local Marketing. E.g. Many Banks in Kerala have special NRI Branches to cater to the needs of customers whose relatives remit money from cater abroad. D. Individual Marketing: This is the ultimate level of marketing that leads to segments of one, customized marketing or one one marketing. Customerization empowers one-to-one customers to design the product and service offering to their choice. For e.g. Asian design Paints retailers facilitate customers to mix and match colors of their choice from a catalogue.

Bases for Segmenting Consumer Markets

A. Geographic Segmentation: Division of the Market into different geographical Units such as nations, cities, states, regions, neighborhoods etc Region: South India, Western Region, North, East City: Class cities, class-II cities, Metro cities etc Class-I Rural, urban , semi urban areas

B. Demographic Segmentation: The market is divided on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion etc. Demographic variables are easy to measure and are directly associated with customer needs and wants

FAMILY LIFE CYCLE STAGES

Stage1: Bachelorhood Stage2: Honeymooners
Single,Focus of expenditure on self Single,Focus Young married couple without kids,focus on building Young home and relation Full Nest-I,1 child less than 6 yrs old I,1 Full Nest-II,youngest child under 6 II,youngest Full Nest-III: all adult children III: Children not living with parents Children Empty Nest1 :Working Empty Nest2: Not Working Empty One spouse dies SS-I: Working SS-II: Not Working

Stage3: Parenthood

Stage4:Post Stage4:Post-ParentHood

Stage5: Solitary Survivor(SS)

C. Psychographic Segmentation: Here buyers are divided into different groups on the basis of psychological/personality traits, lifestyles or values. Lifestyle: Culture-oriented, sports oriented, outdoor oriented. Classification is oriented, done on three parameters: AIO-Activities, Interests and Opinions. Activities, Personality: Compulsive, gregarious ,authoritarian ,ambitious D. Behavioral segmentation: Buyers are divided on the basis of their knowledge of, attitude toward, use of, or response to a product. The behavioral variables are as follows:

Chapter 8 - Identifying Market Segments and Targets

Usage Rate: Light, Medium, Heavy Loyalty Status: None, medium, strong, absolute Readiness Stage: Unaware, aware, informed, interested, desirous, intending to med, buy Attitude towards Product: Enthusiastic, positive, indifferent, negative, hostile

Requirements for Effective Segmentation

Evaluating and Selecting Market Segments

Five patterns of target market selection that can be followed are: Single Segment Concentration: Concentrated Marketing where the firm gains a Concentration: strong knowledge of segments needs and acquires a strong market presence Selective Specialization: a firm selects a number of segments. Each objectively Specialization: attractive and appropriate, there may be little or no synergy between the segme segments Product Specialization: The firm makes a certain product that it sells to several different market segments. Market Specialization: The firm concentrates on serving many needs of a particular customer. Full Market Coverage: The firm attempts to serve all customer groups with all a products they may need. E.g. Coca Cola (non alcoholic beverage segment), Microsoft (non-alcoholic (Software Market) etc.

P = Product M = Market