1) (a)What do you understand by the term Marketing Segmentation?

    (b)What are the different types of consumer and Industrial Market Segmentation?

Ans:

1) Marketing > Segmentation

Market Segmentation

Market segmentation is the identification of portions of the market that are different from one
another. Segmentation allows the firm to better satisfy the needs of its potential customers.
Market segmentation could be defined as the process of   dividing the market in to different
homogeneous groups of consumers who have similar interests. In other words, it could also
be defined as a  strategy that involves dividing the market into various subsets of consumers
who have common needs and interests regarding the goods and services offered. This is
because by splitting the market into various segments it is possible for an organization to
offer their marketing mix for specific target markets instead of offering the same marketing
mix for the entire market which comprise of vastly different customers. To say, once an
organization has identified their specific market segments/s they are able to decide on the
marketing mix to the specific group of consumers which will enable them to better satisfy the
needs of the customers.

By the way, if any of the identified  subsets of consumers lack the above requirements, than it
is unlikely that the organizations may get a successful outcome

The Need for Market Segmentation

The marketing concept calls for understanding customers and satisfying their needs better
than the competition. But different customers have different needs, and it rarely is possible to
satisfy all customers by treating them alike.

Mass marketing refers to treatment of the market as a homogenous group and offering the
same marketing mix to all customers. Mass marketing allows economies of scale to be
realized through mass production, mass distribution, and mass communication. The drawback
of mass marketing is that customer needs and preferences differ and the same offering is
unlikely to be viewed as optimal by all customers. If firms ignored the differing customer
needs, another firm likely would enter the market with a product that serves a specific group,
and the incumbant firms would lose those customers.

Target marketing on the other hand recognizes the diversity of customers and does not try to
please all of them with the same offering. The first step in target marketing is to identify
different market segments and their needs.

Requirements of Market Segments

In addition to having different needs, for segments to be practical they should be evaluated
against the following criteria:
  Identifiable: the differentiating attributes of the segments must be measurable so that
they can be identified.

 Accessible: the segments must be reachable through communication and distribution

channels.

 Substantial: the segments should be sufficiently large to justify the resources required
to target them.

 Unique needs: to justify separate offerings, the segments must respond differently to
the different marketing mixes.

 Durable: the segments should be relatively stable to minimize the cost of frequent
changes.

A good market segmentation will result in segment members that are internally homogenous
and externally heterogeneous; that is, as similar as possible within the segment, and as
different as possible between segments.

Bases for Segmentation in Consumer Markets

Consumer markets can be segmented on the following customer characteristics.

 Geographic

 Demographic

 Psychographic

 Behavioralistic

Geographic Segmentation

The following are some examples of geographic variables often used in segmentation.

 Region: by continent, country, state, or even neighborhood

 Size of metropolitan area: segmented according to size of population

 Population density: often classified as urban, suburban, or rural

 Climate: according to weather patterns common to certain geographic regions

Demographic Segmentation

Some demographic segmentation variables include:

 Age
  Gender

 Family size

 Family lifecycle

 Generation: baby-boomers, Generation X, etc.

 Income

 Occupation

 Education

 Ethnicity

 Nationality

 Religion

 Social class

Many of these variables have standard categories for their values. For example, family
lifecycle often is expressed as bachelor, married with no children (DINKS: Double Income,
No Kids), full-nest, empty-nest, or solitary survivor. Some of these categories have several
stages, for example, full-nest I, II, or III depending on the age of the children.

Psychographic Segmentation

Psychographic segmentation groups customers according to their lifestyle. Activities,

interests, and opinions (AIO) surveys are one tool for measuring lifestyle. Some
psychographic variables include:

 Activities

 Interests

 Opinions

 Attitudes

 Values

Behavioralistic Segmentation

Behavioral segmentation is based on actual customer behavior toward products. Some

behavioralistic variables include:

 Benefits sought
  Usage rate

 Brand loyalty

 User status: potential, first-time, regular, etc.

 Readiness to buy

 Occasions: holidays and events that stimulate purchases

Behavioral segmentation has the advantage of using variables that are closely related to the
product itself. It is a fairly direct starting point for market segmentation.

Bases for Segmentation in Industrial Markets

In contrast to consumers, industrial customers tend to be fewer in number and purchase larger
quantities. They evaluate offerings in more detail, and the decision process usually involves
more than one person. These characteristics apply to organizations such as manufacturers and
service providers, as well as resellers, governments, and institutions.

Many of the consumer market segmentation variables can be applied to industrial markets.
Industrial markets might be segmented on characteristics such as:

 Location

 Company type

 Behavioral characteristics

Location

In industrial markets, customer location may be important in some cases. Shipping costs may
be a purchase factor for vendor selection for products having a high bulk to value ratio, so
distance from the vendor may be critical. In some industries firms tend to cluster together
geographically and therefore may have similar needs within a region.

Company Type

Business customers can be classified according to type as follows:

 Company size

 Industry

 Decision making unit

 Purchase Criteria

Behavioral Characteristics
In industrial markets, patterns of purchase behavior can be a basis for segmentation. Such
behavioral characteristics may include:

 Usage rate

 Buying status: potential, first-time, regular, etc.

 Purchase procedure: sealed bids, negotiations, etc.

2) Explain the term Targeting? Explain the different types of target marketing strategies and
their relevance.

Ans:

MARKET TARGETING
Once the organisation has identified the opportunities existing in different
market segments, it has to decide and select on how many and on which a particular
segment(s) to focus on, and offer their market offering.
Target market is a business term meaning the market segment to which a particular good or
service is marketed. It is mainly
defined by age, gender, geography, socio-economic grouping, or any
other combination of demographics. It is generally studied and mapped
by an organization through lists and reports containing demographic
information that may have an effect on the marketing of key products or
services.
Target Marketing involves breaking a market into segments and then
concentrating your marketing efforts on one or a few key segments.
Target marketing can be the key to a small business’s success. The beauty
of target marketing is that it makes the promotion, pricing and
distribution of your products and/or services easier and more costeffective.
Target marketing provides a focus to all of your marketing
activities.
Market targeting simply means choosing one’s target market. It needs to
be clarified at the onset that marketing targeting is not synonymous with
market segmentation. Segmentation is actually the prelude to target
market selection. One has to carry out several tasks beside segmentation
before choosing the target market.
Through segmentation, a firm divides the market into many segments.
But all these segments need not form its target market. Target market
signifies only those segments that it wants to adopt as its market. A
selection is thus involved in it. In choosing target market, a firm basically
carries out an evaluation of the various segments and selects those
segments that are most appropriate to it. As we know that the segments
must be relevant, accessible, sizable and profitable. The evaluation of the
different segments has to be actually based on these criteria and only on

the basis of such an evaluation should the target segments be selected.

3) Explain the term 'Positioning?'What are different types of positioning and the positioning
processes?

Ans:

The various positioning strategies for product positioning with suitable examples

In  MARKETING, positioning has come to mean the process by which marketers try to create an
image or identity in the minds of their target market for its PRODUCT, BRAND , or organization. It is
the 'relative competitive comparison' their product occupies in a given market as perceived by the
target market.

Definitions
Although there are different definitions of Positioning, probably the most common is: "A product's
position is how potential buyers see the product", and is expressed relative to the position of
competitors.
Positioning is a concept in marketing which was first popularized by Al Ries and Jack Trout in their
bestseller book " Positioning - a battle for your mind". They iterate that any brand is valued by the
perception it carries in the prospect or customer's mind. Each brand has thus to be 'Positioned' in a
particular class or segment. For example, Mercedes is positioned as a luxury brand, and Volvo is
positioned for safety.
The position of the brand has to be carefully maintained. 
-When Marlboro reduced its prices, sales dropped immediately because its customers began
associating it with the generic segment. 
-ROLEX  watches are even more dramatically positioned as a luxury items, and have become a
symbol for accomplishment in life. If Rolex reduces its prices, it will reduce brand cachet and sales.

Product positioning process

Generally, the product positioning process involves:
Defining the market in which the product or brand will compete (who the relevant buyers are) 
Identifying the attributes (also called dimensions) that define the product 'space' 
Collecting information from a sample of customers about their perceptions of each product on the
relevant attributes 
Determine each product's   SHARE  OF  MIND.
Determine each product's current location in the product space 
Determine the target market's preferred combination of attributes (referred to as an ideal vector) 
Examine the fit between: 
The position of your product 
The position of the ideal vector 
Position. 
The process is similar for positioning your company's services. Services, however, don't have the
physical attributes of products - that is, we can't feel them or touch them or show nice product
pictures. So you need to ask first your customers and then yourself, what value do clients get from my
services? How are they better off from doing business with me? Also ask: is there a characteristic that
makes my services different?
Positioning concepts
More generally, there are three types of positioning concepts:
Functional positions 
Solve problems 
Provide benefits to customers 
Get favorable perception by investors  and lenders 
Symbolic positions 
Self-image enhancement 
Ego identification 
Belongingness and social meaningfulness 
Affective fulfillment 
Experiential positions 
Provide sensory stimulation 
Provide cognitive stimulation 
Positioning is what the customer believes about your product’s value, features, and benefits; it is a
comparison to the other available alternatives offered by the competition. These beliefs tend to based
on customer experiences and evidence, rather than awareness created by advertising or promotion.
Marketers manage product positioning by focusing their marketing activities on a positioning strategy.
Pricing, promotion, channels of distribution, and advertising all are geared to maximize the chosen
positioning strategy.

Generally, there are six basic strategies for product positioning:

1. By attribute or benefit- This is the most frequently used positioning strategy. For a light beer, it
might be that it tastes great or that it is less filling. For toothpaste, it might be the mint taste or tartar
control.
2. By use or application- The users of Apple computers can design and use graphics more easily than
with Windows or UNIX. Apple positions its computers based on how the computer will be used.
3. By user- Facebook is a social networking site used exclusively by college students. Facebook is too
cool for MySpace and serves a smaller, more sophisticated cohort. Only college students may
participate with their campus e-mail IDs.
4. By product or service class- Margarine competes as an alternative to butter. Margarine is
positioned as a lower cost and healthier alternative to butter, while butter provides better taste and
wholesome ingredients.
5. By competitor- BMW and Mercedes often compare themselves to each other segmenting the
market to just the crème de la crème of the automobile market. Ford and Chevy need not apply.
6. By price or quality- Tiffany and Costco both sell diamonds. Tiffany wants us to believe that their
diamonds are of the highest quality, while Costco tells us that diamonds are diamonds and that only a
chump will pay Tiffany prices.
Positioning is what the customer believes and not what the provider wants them to believe.
Positioning can change due the counter measures taken at the competition. Managing your product
positioning requires that you know your customer and that you understand your competition;
generally, this is the job of market research not just what the enterpreneur thinks is true