MODULE -1

MARKETING MANAGEMENT

What is a Market?
A set up where two or more parties engage in exchange of goods, services and information is
called a market. Ideally a market is a place where two or more parties (ie, sellers and buyers)
are involved in buying and selling. The seller sells goods and services to the buyer in exchange
of money. The consumers have different needs and wants. The term “market” originates from
the Latin word “Marcatus” which means “a place where business is conducted.”

Definition
According to Perreault and McCarthy, market is defined as 'a group of potential customers
with similar needs or wants who are willing to exchange something of value with sellers offering
various goods and/or services to satisfy those needs or wants. ’

Marketing

Meaning
Marketing is a customer centered approach which aims at the satisfaction of their wants
through the distribution of valuable products and services. Marketing brings together
customers, products and services. The concept of marketing is based on identification of
customer needs and their satisfaction. The process of marketing is a combination of four
elements;
1. Development of Products
2. Determination of Price
3. Distribution channel to deliver the products at the customer's Place
4. Promotion (Advertisement) strategy.

Definition
The famous marketing guru, Philip Kotler defines marketing as "a societal process by which
individuals and groups obtain what they need and want through creating and exchanging
products and value with others".

CONCEPTS/ORIENTATIONS OF MARKETING

1. Production Concept
This concept focuses on reducing costs by way of mass production. The firm believes
that by attaining economies of scale the business can maximize profits and reduce
costs.
2. Product Concept
A firm following this concept tries to introduce the best product, based on quality and
features. It believes that customers can be better influenced by designing and
marketing excellent products. The firm utilizes its fullest energy and efforts in the
continuous improvement of the product. The concern for the improvement of the
product precedes other factors of marketing.
 3. Sales Concept
The focus of this concept is to manufacture the product, and then take maximum efforts
to sell it in the target market. The concept has the view that sales volume cannot be
increased by introducing superior products. Aggressive sales efforts by means of
effective distribution channels and advertisements are highly essential to increase sales
volume. Firms which uphold this concept concentrate on intense sales promotion
efforts.
4. Market Concept
This concept views the customer as the key element of the marketing process. Firms
attempt to know the needs and wants of the customer through market surveys and
research. All marketing activities revolve around customers and they are considered as
the king of the business.
5. Societal Concept
The societal marketing concept holds that a firm should make good marketing decisions
by considering consumers' wants, firm’s requirements, and the society's long-term
interests. The concept highlights the social responsibility of a marketing firm. It states
that a firm should balance customer satisfaction, profits and long term welfare of the
society. The concept emphasizes that marketing activities should not harm the interests
of the society.

FUNCTIONS OF MARKETING
The following classification is a standard one used for classifying the marketing functions.
1. Functions of exchange
2. Functions of physical supply and
3. Facilitating functions

1. Functions of Exchange
It refers to the transfer of ownership and possession from one person to the other for money.
This requires two activities viz, buying and selling.
Buying includes assembling also. a. Buying (Assembling)- This is an important fünction of
marketing and occupies much of the time of both business undertaking (producer, wholesaler
or retailer) and consumers. Buying is an activity in the exchange process. Buying is for
further processing or for selling. Buying includes assembling also. Assembling refers to
concentration of products at a particular place. Assembling is required to produce another
product or for selling it to different members in the distribution channel.

For example: A computer manufacturer assembles the parts such as motherboard, monitor,
keyboard and mouse to sell it to the customer. The manufacturer of a cycle assembles
different parts at a central place in order to produce a cycle without any disturbance.

b. Selling - The exchange process is complete only when the sale is made. The selling activity
is done by the producer, wholesaler and the retailer. Goods are produced for selling. The
ownership and possession of the goods are transferred by the seller to the buyer in the selling
process. This function involves many activities i.e., creating demand, finding buyer, negotiating
price and transferring the title to the buyer.
2. Functions of Physical Supply

These functions create time and place utilities. The product is available at the right time and place as
per the buyer’s need. This physical supply is possible only through transportation and storage and
warehousing.

a. Transportation
Transportation creates place utility. The movement of goods from one place where the
product is not required to a place where they are demanded is possible only
through transportation. The demand and supply for products of different intermediaries are
adjusted through transportation. Different modes such as railways, roadways, airways or
waterways are used for the transportation of goods. The cost and speed determine the
selection of the mode of transportation.

b. Storage and warehousing

It creates time utility. Goods are generally produced in anticipation of demand. The marketer
is able to provide the product at a time the consumer wants. For this purpose, the wholesaler
and retailer must store the goods in their warehouses for timely supply. Sufficient storage and
warehousing facilities are also needed for meeting seasonal changes in the demand of
products.

3. Facilitating Functions
Facilitating functions are those that facilitate or support the functions of exchange and
functions of physical supply. The facilitating functions are:

a. Financing
Finance is considered as the life blood of business. The whole modern production and
marketing mechanism is based on credit and money. A large amount of finance is
required for the smooth functioning of marketing.

b. Market Information
There are various methods and ways by which such investigations and experiments
may be conducted. It thus enables the producers to formulate and to carry out selling
policies. As the demand for various products in national or international markets have
increased, the amount of information needed regarding trademark, quality of goods,
method of packing, test and fashion of consumer nature of demand, prices etc. has
considerably increased
.
c. Risk Bearing
When the goods are sent by the seller to the buyer through rail, road and ship, there
may be risk of loss. The goods may be lost or damaged or destroyed by sea perils,
flood, fire, theft, storm and change in the temperature etc.. Insurance helps to cover
these risks and facilitates the smooth function of exchange of goods.

d. Standardisation and Grading

Standardisation refers to fixing and maintaining the standards for quality, quantity, size
and other features of the product. Standard is a description of a product by
authorityGrading is a part of standardisation. It is a process of classifying the products
on the basis of quality,size, shape, colour, weight etc grading helps to determine the
value of the product as the best grade commands the highest price.
MARKETING ENVIRONMENT

A. Internal Environment

The internal environment is composed of the elements within the organisation, including
current employees, management, and especially corporate culture, which defines employee
behaviour. Although some elements affect the organisation as a whole, others affect only the
manager. In other words, the internal environments are controllable factors because the
company has control over these factors.

1) Ethical Force: Almost every business conducts their marketing operations based upon
business ethics and morals which are all absolutely essential to establish a positive
reaction in the marketing world. The business community must have their ethical
responsibility while delivering the goods to the society otherwise it leads to negative
impressions.

2) Human Resource: The characteristics of human resource will also contribute to the
success or failure of a business enterprise. Characteristics like employee skill, efficiency,
attitude, perception, morale, risk-taking capacity etc may vary from employee to employee
and from organisation to organisation. Training and monitoring changing behaviour of
employees is required to hold work efficiency.
3) Financial Resource: Financial factors like financial policies, apparatus, financial position and
capital structure are also important internal elements affecting marketing activities,
performance strategies and decisions.

4) Production Resource: Raw materials of the company and their utility also affect the decision
of the company. Productive capacity, technology and efficiency of productive apparatus,
distribution logistics etc are all the factors that influence the competitiveness of a business
firm.

5) Research and Development: Effective decision-making may be possible when there is a

mind of innovation in the organisation. In this fast moving corporate world, it is needed for a
company to make decisions to suit the changing environment and also for sustainability of the
organisation for a prolonged period.

B. External Environment
The external environment is composed of all the outside factors or influences that impact the
operation of business. The business must act or react to keep up the flow of operations. In
other words, they are generally uncontrollable factors because the factors are beyond the
control of the company. The external environment can be divided into two types:- Micro
environment Macro environment

I. MICRO ENVIRONMENT
Micro environment is also called a task and operating environment where it studies the small
part or individual unit of the business. It includes:-
1) Competitors
No company can enjoy monopoly in this business world. Today’s competitive environment
consists of certain basic things which every firm has to take note of. A firm’s competitors’
includes not only the other firms in which they also market the similar products but also those
who compete for the discretionary income of the consumers.

2) Customers
According to Peter.F.Drucker, “there is only one valid definition of business purpose, that is to
create a customer” and thus the major task of a business is to create and sustain customers
because business exists only because of its customers. Customers may be of different
categories like individuals, households, industries and other commercial establishments and
government. Monitoring the customer sensitivity leads to business success.

3) Suppliers
Suppliers are those who supply the inputs to the company. Supplier behaviour and attitude
may also affect the company. Hence, multiple sources of supply often help to reduce such
risks of the business concern. For example, Toyota always has some precautionary measures
on suppliers so they print “Suppliers Guide.”

4) Marketing intermediaries
It includes middlemen such as agents and merchants who help the company to find customers
and sell the product to them. They are vital links between the company and the final
consumers. A wrong choice or dislocation of the link may cost the company heavily.
5) Public
Literally the word ‘public’ refers to people in general. According to Philip Kotler, “A public is
any group that has an actual or potential interest in or impact on a company’s ability to achieve
its objectives.” Companies must put their primary energy into effectively managing their
relationships with their various public like supplier, customer, media, competitor, distributors,
investors, bankers etc.

6) Workers
Workers & their Union Workers are the pillars of the company. So the workers now prefer to
join trade unions where it protects their interests, improve their working conditions etc. from the
company’s point of view, industrial relations are more important to improve the company,
otherwise conflict between labour and management leads to sick unit.

II. MACRO ENVIRONMENT

It is also known as a general or remote environment. It studies the larger part of the business
in general.
a) Demographic factors
Demographic environment is the study of the human population in terms of its size, density
and distribution. This includes age, sex, marital status, ethnic status etc. b) Economic
factors
Marketing depends on the economic environment to sell the finished goods. Inflation, varying
interest rates, supply of money, demonetization etc. will influence the demand and willingness
for a product.

c) Cultural factors
Culture is understood as that complex whole which includes knowledge, belief, art, morals,
law, customs and other capabilities and habits acquired by an individual as a member of a
society. For example: American brand of car named “NOVA '' in Spanish it means “STAR” but
in spoken it means “DOESNOT GO OR COME ALIVE”. Due to the public demand the name
was changed.

d) Political and legal factors

This factor influences the operations of marketing, which includes government regulations,
policies, declaration, nature of constitution etc. For example: USA attracts international traders
through its political stability and dynamic government.

e) Technological factors
According to J K Galbraith, a technology is a “systematic application of scientific or organised
knowledge to practical tasks. The company engaged with the innovations, inventions and
findings let them to implement their business ideas and which results to profit and growth.

f) Natural factors
Manufacturing is one of the essential part of the marketing activities in which it totally
depends on the natural environment for its inputs like raw materials, water, fuel etc.

MARKETING MANAGEMENT
Marketing is the process of satisfying the needs and wants of the consumers whereas
management is the processes of planning, organising, staffing, directing, motivating,
coordinating and controlling various activities of a firm. Management of marketing activities is
Marketing Management'.

DEFINITION
According to Philip Kotler, "marketing management is the process of planning and executing
the conception (marketing idea), pricing, promotion, and distribution of goods, services, and
ideas to create exchanges with target groups that satisfy customer and organisational
objectives".

MARKETING MIX
Marketing mix is a popular usage in the study of marketing The basic components of marketing
mix are product, price, place and promotion. It is also known as 4 P's of marketing. The
marketing strategies of a firm revolve around these four elements. The varying mix of these
four ingredients influences the demand for a product and customer satisfaction. A firm has to
prepare a mix of the right product, the right price, the right place and the right promotion to
attain success in marketing.

Definition
According to Philip Kotler, "Marketing mix is the set of marketing tools that the firm uses to
pursue its marketing objectives in the target market".

ELEMENTS OF MARKETING MIX

1. PRODUCT
A product is something a firm offers to give satisfaction to Consumers. It is the final output of
a production process offered to Consumers for satisfying their needs. Product is the most
powerful Weapon in marketing. It is considered as the soul of the marketing mix. The major
decisions based on product in marketing include product development, branding, packaging,
labeling and other features of the product.

PRODUCT MIX
Product mix refers to a group of products manufactured or traded by the firm to strengthen its
presence in the market, increase its market share and increase the sales turnover for more
profitability. It is defined as the overall products offered by a firm to its customers. According
to Philip Kotler, "product mix is the set of all product lines and items that a particular seller
offers for sale to buyers".

2. PRICE
Price is defined as the value that is required to purchase a specific quantity of a good or
service. It is the consideration given in exchange for the transfer of ownership and possession
of goods and services. Price is a critical element which strongly influences the position of the
product in the market. Marketing firms use pricing as a tool for achieving the targeted market
share or sales volume. Pricing is also used as a strong weapon for beating competition in the
market. Pricing decisions and strategies directly influence the sales volume and profits of the
firm.
PRICE MIX
Price mix is an umbrella term which is used to cover all the factors associated with pricing such
as unit price level to be adopted discount to be offered, pricing strategies, price discrimination
(different prices for different groups of consumers for identical products offered by the firm)
and terms of credit to be allowed to customers. A firm has to make sure that it offers a rational
mix of price to the customers.

3. PLACE
Place is defined as the location where a firm expects to find its Place customers and
consequently, where the sale is carried out Place refers to the actual physical position of the
customer in a geographic area. Place in marketing means the area or location of the
consumers and not the place of the business. Place in marketing is also known as channel,
distribution or intermediary.

PLACE MIX
Place mix refers to the combination of all decisions related with the flow of goods from the
place of manufacturers to the place of consumers. The two major components of place mix
are channels of distribution and physical distribution. A Channel of distribution is the route
through which a product moves from the producer to the ultimate consumer.

4. PROMOTION
Promotion is the communication link between the firm and the consumer. Promotional
measures are necessary to inform the consumers about a product and its features. Various
methods of promotion influence the purchasing decision of a potential buyer.

PROMOTION MIX
The overall marketing communication programmes of a firm are known as promotion mix.
The major elements of a promotion mix are as follows;
1. Advertising- It is defined as any paid form of non-personal communication of products
through electronic or print media in order to inform and influence the customers. For example,
advertise-ments through television, newspapers etc.
2. Personal Selling- It is a process of helping and stimulating the consumers to purchase a
product or service through oral presentation. For example,canvassing customers personally
or through telephone and other electronic means, sales presentations etc.
3. Sales Promotion- It is providing incentives to the customers for encouraging them to
purchase the product. For example, gifts, scratch cards, discount offers etc.
4. Publicity- It is giving favorable presentations and news about the product and its features
in the media. For example, articles and reports in newspapers and magazines, radio and TV
presentations, charitable contributions, seminars etc.

4 C'S OF MARKETING
Modern marketing experts give considerable importance to the 4 C's along with the 4 P's.

1. Consumer/Customer
Consumer or Customer enjoys the prime position in modern marketing. So
identification and satisfaction of the customer needs and wants is the ultimate aim of
marketing A firm which is successful in this mission can sustain in the market.
Companies have to market those products and services which meet the demands of
the customers. Instead of focusing on the product aspect as in the 4 P's of marketing,
companies need to emphasize on the tastes and preferences of the consumers.
 2. Cost
The cost concept replaces the price concept by offering products to customers at a fair
cost. Price is constituted by the element of profit and it aims at maximization of profit to
the marketing firm. The cost concept is customer centric which aims at giving more
values to customers at the same cost.
3. Convenience
The concept of convenience reminds companies to search and find the convenience
of the customers to purchase products and services. The place factor in the marketing
mix largely considers the capacity and resources of the marketing firm while distributing
products and services. But the convenience concept largely focuses on the
convenience of the consumers with respect to the time and place of their purchase.
4. Communication
It focuses on two way exchange of information between the customer and the
marketing firms instead of mass promotion. It aims at more meaningful relationships
with the customers. It helps a company to have a better understanding of the market
and increase customer loyalty.

FACTORS INFLUENCING MARKETING MIX

The following are some of the important factors which influence the marketing mix
1. Availability of funds- The financial resource owned by a firm is an important factor which
governs the marketing mix of that firm. If the firm is in a position to spend more money in
product research, design, physical distribution and sales promotion then it can formulate
a strong mixture of 4 P's.

2. Requirements of the target market- The needs of the customers strongly influence the
proportion of four basic ingredients of marketing. For example, if the customers are
rational and well informed about all the available products in the market, then there is no
use in spending more money on advertisements and other sales promotion methods.

3. Size of the market- The proportion of the marketing mix varies on the basis of the size of
the target market. For example, a firm has to spend more money on distribution and
promotion when the size of the market is big.

4. Competition- The marketing mix formulated by the competitors strongly influences the
marketing mix of a firm. Firms use marketing mix as a response to actions of competitors
in the market.

5. Technology- Drastic changes have occurred in the marketing mix adopted by the
companies in the modern world. Development of science and technology is the major
reason behind these revolutionary changes. Most firms now use hi-tech methods of
production, distribution and promotion.
MARKET SEGMENTATION

Market segmentation is a process of identifying the areas of market that are different from one
another. It is a process of dividing the market on the basis of different needs and
characteristics. A market can be segmented or divided on the basis of age, sex, income,
education, occupation etc.

Definition
According to William J. Stanton, "market segmentation consists of taking the total
heterogeneous market for a product and dividing it into several sub markets or segments each
of which tends to be homogeneous in all significant aspects".

Features
The salient features of market segmentation are as follows.

1. It is a process of dividing a market into different sections groups on the basis of consumer
needs and behaviours.
2. The aim of market segmentation is to identify and select the best suitable target market for
the firm.
3. It is a process which narrows down a large market into small accessible segments.
4. It is a process of dividing a heterogeneous (diverse market into different homogeneous
(uniform) segments. There are differences between different market segments but there is
uniformity in the behavioural pattern of consumers in a particular segment.
5. It leads to market targeting and product positioning. It is popularly known as STP
(Segmenting, Targeting and Positioning) process.
6. Segmentation is usually adopted by the firms when it is difficult to carry out mass
marketing which addresses the needs of the whole market with the same marketing mix.

NEED AND IMPORTANCE

1. Essential to learn and understand the behavioural pattern off different consumers in a
market.
2. Identifies a market/consumer segment which a firm can effectively manage.
3. Gives information inputs to marketing mix decisions (product, price, place and
promotion).
4. Segmentation is necessary to locate homogeneous segments of buyers with similar
needs and wants in order to develop the target market.
5. Helps to study the nature and degree of competition.
6. Helps to identify and concentrate on the special needs of particular segments of the
market.

STEPS IN MARKET SEGMENTATION

1. Identification of a Market (Defining the Market)

The first step in segmentation is to identify a market so as to select the most
appropriate target markets and develop a marketing mix accordingly. A market
comprises a large volume of consumers, consumer preferences and interests which
offers numerous market opportunities for a firm. The heterogeneities (differences) in a
market enable a firm to divide it into small homogeneous market segments. For
 example, a firm has identified and selected a travel service market for its marketing
efforts.
2. Identification of the Market Needs
Here, the needs of the potential customers on a given product in the identified market
are closely examined. A firm is required to interact with the potential customers to know
more about their interests and demands. In the example given above, a firm has
selected travel service as its market. After selecting this market, the firm is required to
conduct a detailed study of the needs and wants of the consumers of this market.
3. Division/ Segmentation of the Market (Segmenting Stage)
On the basis of the identified needs of the market, the firm has to divide the selected
market into different sub markets or segments. The travel service market can be divided
into different sub markets such as Air, Bus, Taxi, Train and Ship services. A division of
the selected market or consumers can be made on the basis of these four modes of
travel.
4. Study of the different Market Segments (Segmenting Stage)
It is essential for the marketer to closely examine and study the needs, preferences,
buying behaviour and size of the identified segments. A detailed study of the needs,
behaviour and size of the segments enables firms to make a further breakdown of the
segments into different homogeneous sub segments. For example consumers who
prefer different classes of travel in a mode of transport. In Airlines it can be First class,
Business class and Economy class.
5. Selection of a particular Market Segment (Targeting Stage)
After studying the needs of the different market segments, the firm has to select an
appropriate market segment. Selection of a particular market segment depends on the
marketing resources possessed by the firm and its ability to address the needs of that
segment. This is the targeting phase of segmentation. A firm identifies its target market
during this phase. For example, a firm has selected Economy class air travel service
as its market segment/ target market.
6. Formulation and Implementation of Marketing Strategies (Positioning Stage)
This stage of segmentation is known as the 'positioning stage.' During this stage a firm
formulates and implements adequate strategies to market its products in the selected
market segment. This is necessary to create an identity or image of the product in the
minds of the consumers. In the case of multiple target markets different strategies are
required in different market segments. Positioning stage is usually followed by an
Evaluation (Monitoring) and Correction phase which helps firms to find out the deficiencies
of the marketing strategies implemented and make suitable corrections.

BASES FOR SEGMENTATION/SEGMENTATION VARIABLES

There are several bases adopted for segmenting a market. These bases are also known
as segmentation variables. The following are the commonly followed bases for
segmenting a market·
1. Demographic Segmentation
It is the most common method of market segmentation which classifies consumers
according to their demographic characteristics such as age, sex, income, occupation,
education, household size and family life cycle. This helps the firm to divide the
market into several segments, each having a common variable. For example, market
segments of same age, sex and income. A major advantage of demographic
segmentation is that it helps firms to determine the needs of the consumers on the
basis of their demographic characteristics.

2. Geographic Segmentation
Geographic segmentation is a market segmentation strategy by which the markets are
divided on the basis of region, size of metropolitan area, population density and
climate zone. For example, south, central, north, east, west, metropolitan city, town,
urban, rural, temperate, hot, humid, rainy etc. It is a process of dividing the market
into different geographical units, or grouping the consumers on the basis of their
physical location. The needs of consumers are identified on the basis of their
geographic regions.

3. Psychological Segmentation
Psychological segmentation separates consumers on the basis of their Psychological
characteristics. Psychological characteristics refer to the inner or intrinsic qualities of
the individual consumer. It includes personal traits, interests and lifestyles of the
consumers. The needs of consumers are identified and they are grouped on the basis
of these psychological characteristics.

4. Socio-cultural Segmentation
Socio-cultural segmentation divides a product market on the basis of social values,
culture, religion, race and nationality. Socio- cultural factors are useful bases for
segmenting the market because these factors greatly influence the way of thinking
and life of consumers. Society, culture, race, religion and nationality have significant
influence over the thoughts and actions of consumers.

5. Behavioural Segmentation
Behavioural segmentation is a useful way to segment the market on the basis of
consumers' knowledge, usage and attitude towards the product. Behavioural bases for
segmentation include:

a) Purchase Occasion - It segments the market on the basis of the occasion of

purchase of the product. Consumers may buy a particular product for different
occasions and purposes.This type of segmentation helps a firm to know the occasions
when consumers use its products.
b) Benefits Sought- In this type of segmentation, a marketing firm segments the
market on the basis of the specific benefits that consumers seek from its product. For
example, Hindustan Lever Company offers different varieties of soaps for meeting
the different types of benefits sought by the customers. ‘Lifebuoy' is positioned as
"health and hygiene" soap and Pears' is positioned as high quality skin care soap.
c) User Status
User status is a market segmentation strategy which divides the market on the basis
of the product using the status of the consumers. In this method, the consumers are
usually graded as nonusers, ex-users, potential users, first-time users and regular
users of the product. Consumers belonging to different user status are to be
approached through different kinds of marketing appeals.

d) Usage Rate- It is segmentation of a market on the basis of the quantity of usage of

the product. It usually segments a market as light, medium and heavy user groups.

e) Loyalty Status- It is a segmentation strategy which divides a market on the basis of

consumer loyalty. In a market, certain consumers may show cent percent loyalty to a
particular brand and buy that brand all the time. Some consumers may keep loyalty
towards two or three brands of a given product. Also there may be consumers who
are not loyal to any brand and search for something different each time. Market is
segmented on the basis of the nature of loyalty maintained by the different
consumers.

f) Buyer Readiness Stage

In this type of segmentation, a market is divided on the basis of the readiness of the
consumers to purchase the product. There are different stages or segmentation bases
in the buyer readiness segmentation process. There are several stages before the
purchasing decision is taken by a consumer. The major stages/ segmentation bases
are Awareness (consumers who are aware of the product), Knowledge (Consumers
who have complete knowledge about the product), Liking (Consumers who like the
product), Preference (Consumers who prefer the product), Confidence (Consumers
who are confident to purchase the product) and finally Purchase (Consumers who are
purchasing the product).

g) Attitude
It is segmentation of a market based on the perception of the consumers towards the product.
People's attitude towards the product can range from 'enthusiastic, positive, indifferent,
negative to hostile'. Attitudinal segmentation divides consumers on the basis of their
thoughts and feelings towards buying the product.

MARKET TARGETING
It is considered as the second phase in the Segmentation, Targeting and Positioning
(STP) process, The term targeting refers to the actual selection of the segment a firm
wants to serve. Target market refers to the specific market focused by a firm to carry
out its marketing activities. It is a set of buyers sharing common needs or
characteristics that a firm decides to serve. Target marketing means the overall
marketing efforts taken by a company to meet the requirements of the target market.
Market targeting on the other hand is a process whereby one or more of the market
segments previously identified are evaluated and selected. Market segmentation is
the first essential step in the overall process of market targeting.
TYPES/APPROACHES OF MARKET TARGETING

There are different forms of market targeting. Somne of the common types of market
targeting are as follows;

1. UNDIFFERENTIATED MARKETING (MASS MARKETING/ ZERO

SEGMENTATION)

Undifferentiated marketing is also referred to as mass marketing or zero

segmentation. In this case, the firm may decide to focus the entire market with one
particular product. Coca Cola during its beginning stage followed this type of market
targeting. The major objective of undifferentiated marketing is to cover a large
number of buyers with the same product.

2. DIFFERENTIATED MARKETING STRATEGY

In this case a firm decides to target several segments and develops distinct
products/services with separate marketing mix strategies for the different segments.
For example, airline companies offer business class (segment 1) and economy class
(segment 2) tickets, with separate marketing strategies to attract the different
segments.

3. CONCENTRATED MARKETING

This type of market targeting concentrates on one particular segment. It is also known
as Niche marketing. The firm will develop a product that caters for the needs of that
particular group. For example Cartoon Network Channel aims at kid viewers
(children).
MARKET POSITIONING

Positioning is the last phase in the STP process. During the course of positioning,
marketers try to create an image or identity in the minds of their target market for its
product, brand, or organisation. It is a process by which firms create impressions in
the customer's mind.

According to Philip Kotler, "positioning is the act of designing the company's offering
and image so that they occupy a meaningful and distinct competitive position in the
target customers' minds Positioning is viewed as the battle for conquering the minds
of the target market.