Selecting and attracting the markets

It involves three
Segmenting- is the process of dividing market into different groups based on one or more variables Targeting is selecting the market segments, which can be served efficiently & profitably Positioning is a market attraction strategy, which involves placing the brands in the minds of customers in the target markets

Decisions

Actions

Segmentation

1. Identification of various bases for segmenting market 2. Developing profiles of the market segments 1. Evaluating the market segments for their attractiveness 2. Deciding the market coverage strategy

Targeting

Positioning

1. Identifying a set of possible competitive advantages of the brand 2. Selecting the right competitive advantage 3. Communication the chosen competitive advantage to the target customers

Segmentation
Process of dividing heterogeneous market into homogeneous sub-units Market preference patterns are Homogeneous Diffused Clustered

Degree of Market segmentation

Degree Zero Complete

Type

Mass marketing

Segment marketing

Niche marketing

Micro marketing

Approach

Consider Identifies all people people as as a bunch different groups

Serves selectively one or very few groups of people

Focuses on individual or very small groups

Segment marketing
Need for Customers are more diverse, sophisticated and choosy Stiff competition Benefits: more E& E service Image of creative & innovative organization Monopoly by virtue of unique marketing offer Pre requisites: understanding of consumer needs & wants Awareness of competitors, products, services Fine tuning of products

 Niche Marketing: small group with distinctive set of traits, who seeks a special combination of benefits Micro marketing: it involves tailoring the product & programs to suite taste of specific locations & individuals Local marketing Individual marketing

Guides to effective segmentation

Measurable Accessible Differentiable Substantial

Basis of segmentation
Geographic Demographic Psychological Multivariable segmentation

Geographic segmentation
Zones States, districts& villages Density Climate culture

Demographic segmentation
Age Life cycle Gender Family size Family income Occupation Education Nationality religion

Psychological segmentation
Social class Life style personality

Social class
Upper- upper Lower upper Upper- middle Lower middle Upper- lower Lower - lower

Upper Upper Social elite, Wealth inherited, well known family back ground, aristocrats, small in number, reference group for others

Jewelry, antiques, farmhouses, vacations, luxury products at a high price

Lower Upper

Social elite, wealth earned, educated & professionals, active in social & civic affairs, aspire and associate with UU stream

Status symbols cars, homes, expensive schools, art pieces, sculptures etc

Upper Middle

Career oriented, dependent on education & hard work, dual career families, seek comfort, ambitious

Quality of life products & entertainment, good interior decoration, vacation

Middle

business man, college background, fashion oriented but traditional, dual career families

nice homes, nice furniture, decent school, occasional vacations, travel & tour, regular but economical entertainment

Upper Lower Above BPL, depend on loans & advances, hand to mouth, dual career families, traditional, strong family ties, school education
Lower - Lower BPL, daily incomes, low percapita incomes, poor health & hygiene, dependence on petty loans and charity

Economy products, installments, credit buying, low priced popular branded products
Local unbranded products, daily purchases, cheap varieties, buy seconds, or collect thrown out clothes, food etc

Life style
Trend setters Traditionalists chameleons

Behavioral segmentation
Occasions Benefits sought User status Usage rate Loyalty status Place Product possession categories

Targeting
It involves evaluating the various segments and selecting how many & which ones to target. The three aspects in targeting are Evaluation of segments Selection Coverage

Evaluation of segments
Criteria for evaluation: Profitability Attractiveness Growth rate Company objectives Limitations

Selection of segments
Selection of segment can be made by rating the alternative segments on a predetermined scale in respect of Profitability Attractiveness Growth rate Company objectives Limitations

Sno

Criteria Profitability Attractiven ess Growth rate objectives Limitations

High

Medium

Low 1 1

Nil 0 0

Rating scale 3 2
3 2

3 0

2 1

1 2

0 3

Coverage of Segments
Segmentation Zero Substantial Selective Type of marketing Mass Segment Niche Coverage strategy undifferentiated Differentiated concentrated

Undifferentiated Strategy
Focuses on what is common among consumers & tries to employ it in designing its marketing offer Bath soaps medicinal value, cosmetic strength, economy, freshness feeling Fair & lovely , life buoy, ponds

Differentiated strategy
It investigates & identifies differences between segments and tries to match the market offer to the desires & expectation of each segment Tractor 25 30 HP Middle or small farmers 50 HP Large scale Pepsodent 50 g Middle & high income 15g Low income

Concentrated strategy
It directs all marketing efforts towards one selected segment. It facilitates specialization in serving the segment and achieving higher level of consumers satisfaction, delight & loyalty Risks: changes in consumer preferences , competition from large scale units

Choosing a coverage strategy

strategy
Variables Company Resources Product variability Product life cycle stage Market variability Undifferentiated Moderate Differentiated Large concentrated Limited

Less

More

Less

Introduction

Growth

Introduction

Less

High

High

Positioning
It is a act of finding a place in the minds of consumers & locating the brand therein Companies have to plan positions that give their products the necessary advantage in the target market It involves identifying the differences of the offer vis-a vis competitors offers Selecting the differences that have greater competitive advantage Communicating such advantages effectively to the target audience

Identify Differences
Product Services People image

Product differentiation
Products can be differentiated on attributes like shapes, size, color, quality, composition & performance Coke & Diet coke Usha fan : fighter- low price : Senator more coverage

Services differentiation
Services may be differentiated in respect of delivery, installation & maintenance Long warranty periods, free service coupons, service @ phone call, 7 X 24 hours services, emergency care etc

People
People , who come into contact with users, may be quite often influence the decision of consumers In the era of relationship marketing, differentiation by people is worth considering Services organizations like hospitals, schools, banks, road transport & telecommunication, require people to serve with smile and are efficient Innovative team, know how to serve, professional experts, ready to solve your problems

Image
Image of a brand or company may win the consumer Image is built by advertisements, symbols, signs, colors, logos, atmosphere of organization & social activities The Images may be related to attributes such as quality, high-tech, Samaritan, achiever & honest

Selecting the Right differences

When a company identifies several differences it can evaluate them the help of the following criteria Attractive does it provide value to customer? Distinctive is it different from competitors? Preemptive is it very difficult to imitate? Affordable can buyers pay for it? Communicable can the difference be clearly expressed? Is it visible? Underatandable?

Evaluation Steps
Identification of (competitive advantage )attributes Use of Rating scale Rating the attributes on the five criteria viz., Then , developing a comparative table of competitive advantage to arrive at an appropriate decision

Evaluation of Differences
Differe Attracti Distincti Pre- Afforda Commu Scores nce ve ve Empti ble nicable ve Quality 8 9 4 8 7 36 Service Technol ogy Econo my 6 6 6 8 7 7 5 5 5 8 8 8 6 8 9 33 34 35

Competitive Advantage
Difference Quality Company 36 Competitor 32

Service
Technology Economy

33
34 35

32
36 30