First group assignment

1. 2. 3.

4. 5. 6. 7. 8. 9. 10.

What is Marketing What is customer perceived Value What is the Exchange and what is meant by establishing long term exchange relationship What are utilities and how are they provided What is marketing orientation and marketing concept Discuss the marketing management Philosophies What is sales and marketing orientation Discuss 4ps (the marketing elements ) Discuss marketing STP process What is marketing strategy in a nut shell

Assignments
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Each topic shall be prepared by two groups Only one of the topics shall be presented Groups shall also prepare the answers in a written form These presentations and answers shall be used for internal evaluation for the subject Each topic shall carry 5 marks so we shall have 8 to 10 assignments.

Market Segmentation
The process of dividing a potential market into distinct subsets of consumers and selecting one or more segments as a target market to be reached with a distinct marketing mix.

Why Segment?
Market segmentation
More precise definition of customers needs and wants More accurate marketing objectives

Improved resource allocation

Better marketing results

Market Segments

Market Segmentation

The process of dividing a potential market into distinct subsets of consumers and selecting one or more segments as a target market to be reached with a distinct marketing mix.

Market Segmentation
Market
People or organizations with needs or wants and the ability and willingness to buy
A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. The process of dividing a market into meaningful, relatively similar, identifiable segments or groups.

Market Segment

Market Segmentation

Indian car market Segmentation

creaminess

sweetness

Homogeneous Preference
-no natural segments -all buyers have same preference

creaminess

sweetness Diffused Preference

-no pattern (or poor research) -take center position

creaminess

sweetness Clustered Preference

-natural segments -increases as number of competitors increases

Criteria for Segmentation

Substantiality Identifiability Measurability
Segment must be large enough to warrant a special marketing mix. Segments must be identifiable and their size measurable.

Accessibility

Members of targeted segments must be reachable with marketing mix.

Unless segment responds to a marketing mix differently, no separate treatment is needed.

Responsiveness

Consumer Markets

STATE OF BEING

STATE OF MIND

Geographic

Demographic Psychographic

Behavioral

Geographic Segmentation

The division of a total potential market into smaller subgroups on the basis of geographic variables (e.g., region, state, or city).

Geographic Variables

Region City or metro size Density

Pacific, Mountain, West North Central, West South Central, East North Central, East South Central, South Atlantic, Middle Atlantic, New England
Under 4,999; 5,000-19,999; 20,000-49,999 . . . 1,000,000-3,999,999; 4,000,000 and over

Urban, rural, suburban

Climate

Northern, southern

Demographic Variables

Age Gender Occupation Family size Education Nationality Religion Income Ethnicity

Marital Status

Households as a consuming unit

Singles Divorced Single parents Dual-income married

Sociocultural Segmentation

Family Life Cycle Social Class Culture, Subculture, and Cross-Culture

Family Life Cycle

Phases a family goes through in their formation, growth, and final dissolution

Bachelorhood Honeymooners Parenthood Post-parenthood Dissolution

Explicit basis: marital status, family status Implicit basis: age, income, employment

Psychographic Variables

Lifestyle
Hobbies TV viewing habits Social activities Club memberships Vacation preferences

Personality

Compulsive Outgoing Authoritarian

Ambitious

Behavioral Variables
Occasions Benefits User status Usage rate
Regular occasion, special occasion

Quality, service, economy, speed

Nonuser, ex-user, potential, first-time, regular

Light user, medium user, heavy user

None, medium, strong, absolute Unaware, aware, informed, interested, intends to buy Enthusiastic, positive, indifferent, negative, hostile

Loyalty status Readiness stage Attitude toward product

THE TOOTHPASTE MARKET The package of benefits sought

WHITENESS FRESHNESS GOOD TASTING PRODUCT APPEARANCE DECAY PREVENTION GUMS PROTECTION TEETH SENSITIVITY ECONOMY

Use-Related Segmentation

Rate of Usage

Heavy vs. Light

Aware vs. Unaware Brand Loyal vs. Brand Switchers

Awareness Status

Brand Loyalty

Usage-Situation Segmentation

Segmenting on the basis of special occasions or situations Example Statements:

Whenever our daughter, Jamie, gets a raise, we always take her out to dinner. When Im away on business, I try to stay at a suites hotel. I always buy my wife flowers on Valentines Day.

Benefit Segmentation

Segmenting on the basis of the most important and meaningful benefit Prudential - financial security Iomega - data protection Wheaties - good health Eclipse - fresh breath

Benefit Segmentation of the Toothpaste Market

Segment Name The Sensory Segment Principal benefit sought Demographic strengths Special behavioural characteristics Flavour, product appearance Children Users of spearmintflavoured toothpaste The Sociables Brightness of teeth Teens, young people Smokers

The Workers Decay prevention Large families Heavy users

The Independent Segment

Price Men Heavy users

Brands disproportionately Colgate, flavoured Stripe

Personality characteristics High selfinvolvement Lifestyle characteristics Hedonistic

MacLeans, Plus White, Ultra Brite

High sociability Active

Crest

Brands on sale
High autonomy Valueoriented

High hypochondriasis Conservative

Market Segmentation The bicycle-riders product-market

Submarket 1 (Exercisers)

Submarket 3 (Transportation riders)

Submarket 4 (Socializers)

Submarket 2 (Off-road adventurers)

Submarket 5 (Environmentalists)

3-8

Generic vs Product Market

Narrowing Down to Target Markets

Benefit Segmentation of the Snack-Food Market

% of Snackers Nutritional Snackers 22% Lifestyle Characteristics Selfassured, controlled
Outdoorsy, influential, venturesome Highly anxious, isolated

Benefits Sought

Consumption Level

Nutritious Light w/o artificial ingredients Low in calories, quick Light

Weight Watchers Guilty Snackers

14%

9%

Low in Heavy calories, good tasting

Product/Usage Habits Segmentation

Pillow Manufacturer
PRODUCT MARKET Stomach sleepers Back sleepers Side sleepers SOFT PILLOW
L M S

MEDIUM PILLOW
M L M

FIRM PILLOW
S M L

Key: L, Large market; M, medium market; S, small market

1994 Richard D. Irwin, Inc. To accompany MARKETING, 4/E by Berkowitz, Kerin, Hartley, and Rudelius

Bases for Segmentation

Geography

Bases Used to Segment Consumer Markets

Demographics Psychographics Benefits Sought Usage Rate

Look at your segments: Who are they? Who do you want to go after?

Geographics Demographics Psychographics Benefits Sought Usage Rate What segments did you come up with? Do you want to target all, some, or one?

Summary of Basic Methods

Market Segmentation
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Geographic Segmentation Region Southwest, Mountain States, Alaska, Hawaii City Size Major metropolitan areas, small cities, towns Density of area Urban, suburban, exurban, rural Climate Temperate, hot, humid, rainy Demographic Segmentation Age Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+ Sex Male, female Marital status Single, married, divorced, living together, widowed Income Under $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,999, $100,000 and over Education Some high school, high school graduate, some college, college graduate, postgraduate Occupation Professional, blue-collar, white-collar, agricultural, military

continued
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Psychological Segmentation Needs-motivation Shelter, safety, security, affection, sense of self-worth Personality Extroverts, novelty seeker, aggressives, low dogmatics Perception Low-risk, moderate-risk, high-risk Learning-involvement Low-involvement, high-involvement Attitudes Positive attitude, negative attitude Psychographic (Lifestyle) Segmentation Economy-minded, outdoors enthusiasts, status seekers
Sociocultural Segmentation Cultures Religion Subcultures (Race/ethnic) Social class Family life cycle

American, Italian, Chinese, Mexican, French, Pakistani Catholic, Protestant, Jewish, Moslem, other African-American, Caucasian, Asian, Hispanic Lower, middle, upper Bachelors, young married, full nesters, empty nesters

SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Use-Related Segmentation Usage rate Heavy users, medium users, light users, non users Awareness status Unaware, aware, interested, enthusiastic Brand loyalty None, some, strong Use-Situation Segmentation Time Leisure, work, rush, morning, night Objective Personal, gift, snack, fun, achievement Location Home, work, friends home, in-store Person Self, family members, friends, boss, peers Benefit Segmentation Convenience, social acceptance, long lasting, economy, value-for-the-money Hybrid Segmentation Demographic/ Combination of demographic and psychographic profiles Psychographics of consumer segments profiles Geodemographics Money and Brains, Black Enterprise, Old Yankee Rows, Downtown Dixie-Style SRI VALSTM Actualizer, fulfilled, believer, achiever, striver, experiencer, maker, struggler