Segmentation, Targeting, and Positioning: Building the Right Relationships with the Right Customers. Dr. Devkant Kala

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1 Segmentation, Targeting, and Positioning: Building the Right Relationships with the Right Customers Dr. Devkant Kala

2 Market Segmentation, Targeting, and Positioning

3 Definition Market Segmentation: The process of dividing the total heterogeneous market into relatively distinct homogeneous subgroups or segments of consumers with similar needs, characteristics or behaviour who might require separate products or marketing mixes.

4 Definition Market Segment: is a portion of a larger market in which the individuals, groups, or organizations share one or more characteristics i.e. wants, purchasing power, geographical locations, buying motive, attitudes or habits, that cause them to have relatively similar product needs.

5 Levels of Market Segmentation Mass Marketing Same product to all consumers (no segmentation) Segment Marketing Different products to one or more segments (some segmentation) Niche Marketing Different products to subgroups within segments ( more segmentation) Micromarketing Products to suit the tastes of individuals or locations (complete segmentation)

6 Levels of Market Segmentation Mass Marketing Same product to all consumers (no segmentation) Segment Marketing Different products to one or more segments (some segmentation) Niche Marketing Different products to subgroups within segments ( more segmentation) Micromarketing Products to suit the tastes of individuals or locations (complete segmentation)

7 Levels of Market Segmentation Mass Marketing Same product to all consumers (no segmentation) Segment Marketing Different products to one or more segments (some segmentation) Niche Marketing Different products to subgroups within segments ( more segmentation) Micromarketing Products to suit the tastes of individuals or locations (complete segmentation)

8 Levels of Market Segmentation Mass Marketing Same product to all consumers (no segmentation) Segment Marketing Different products to one or more segments (some segmentation) Niche Marketing Different products to subgroups within segments ( more segmentation) Micromarketing Products to suit the tastes of individuals or locations (complete segmentation)

9 Market Segmentation Geographical segmentation Bases of Segmenting Consumer Markets Demographic segmentation Psychographic segmentation Behavioral segmentation

10 Market Segmentation Geographic Segmentation Geographic segmentation focuses on dividing markets into different geographic units.

11 Market Segmentation Geographic Segmentation Variables World Region or Country State City or Metro Size Density (Urban and Rural) Climate Topology (Hills and Plains)

12 Market Segmentation Demographic Segmentation Demographic characteristics are commonly used to segment the market. They are mostly used to segment market, because: 1. They are easier to measure, and 2. Taste, requirements, need and preferences of consumers largely depends on these demographical variables.

13 Market Segmentation Demographic Segmentation Variables Age Gender Family size Family life cycle Income Marital Status Occupation Education Religion Social Status Generation Nationality

14 Market Segmentation Psychographic Segmentation Consumers are subdivided into different groups on the basis of personality, lifestyles, thinking and values.

15 Market Segmentation Behavioral Segmentation Dividing the market on the basis of behavioral variables is termed as Behavioral segmentation. Occasions Benefits User Status Usage Rates Loyalty Status

16 Market Segmentation: Benefits Helps locate distinctive customer groups within a given market and helps distinguish them from one another. Facilitate right choice of target market. Helps tailor the marketing offers/programs to suit each group. To discover marketing opportunities.

17 Market Segmentation: Benefits Helps concentrate efforts on the most productive and profitable segments, instead of frittering them over irrelevant or unproductive or unprofitable segments. Helpful in facing competition. Sustainable customer relationship in all phases of customer life cycle.

18 Market Segment Criteria Measurable Size, purchasing power, and profile of segment Requirements for Effective Segmentation Accessible Can be reached and served Substantial Large and profitable enough to serve Differentiable Respond differently

19 Market Segment Criteria Requirements for Effective Segmentation Actionable Effective programs can be developed Growing Provide new opportunities and challenges Compatible With firms resources and capabilities