Strategic Marketing

6. Strategic Market Segmentation

1

Learning Objectives
1.

Understand the levels of segmentation and the strategic dimension of segmentation Understand the activities involved in strategic segmentation. Understand how segmentation can be an active strategy for growth of a company

2.

3.

$. Im%#ementin
g and managing market& driven strategies

1. Identification of Markets segments ! c"stomer va#"e

'. Market&

2. (esignin
g market driven strategie s

The Marketing Strategy

driven %rogram deve#o%men t

 e.g. what segments to communicate to

e.g. !llocation of money for a UHT distribution system" or to rural distribution

e.g. whether to market UHT milk or pasteurized milk . onsumer preferences

#eve#s

Strategic Segmentation

)or%orate vision ! strategy Prod"ct benefits so"ght by cons"mers

Manageria# Segmentation

*##ocation of reso"rces to target markets Marketing %#anning

O%erationa# Segmentation

Marketing mi+ *dvertising segments Sa#es segments etc

Segmentation Process in the #arket$%riven

&trategy
1 Segments identified 2. ,a#"e O%%ort"nities e+%#ored '. .e/ Market S%aces e+%#ored $. Matching ,a#"e O%%ort"nities ! )a%abi#ities -. Market Targeting 6. Strategic

,alue (pportunities -n a .roduct$#arket

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Segmentation Process in the #arket$%riven

&trategy
1 Segment s identified 2. ,a#"e O%%ort"nities e+%#ored '. .e/ Market S%aces e+%#ored $. Matching ,a#"e O%%ort"nities ! )a%abi#ities

-dentifying / .lacing buyers in a product$market into sub groups

-. Market Targeting 6. Strategic

*ctivities ! (ecisions In Market Segmentation

%efining The #arket To 0e &egmented &electing The &egmentation &trategy -dentifying #arket &egments

'iner &egmentation &trategies

'orming #arket &egments

1. %efining The #arket To 0e &egmented

Prod"ct ,ariant Segmentation Prod"ct Ty%e Segmentation

6eneric Segmentation

1. %efining The #arket To 0e &egmented

e.g. 4ea#th and 5ea"ty S"%%#ies Market

Leve# of Prod"ct I##"strative .eed?@ant )om%etition (efinition )om%etitors Satisfied

6eneric Prod"ct Ty%e Prod"ct ,ariant

4ea#th ! 5ea"ty *ids

)ons"mer Prod"ct )om%anies

0nhancement of 4ea#th ! 5ea"ty

Shaving 1illette" 0="i%ment )emington" 0ic 0#ectric 2a>ors 5ra"n 2emington Panasonic

&having

0#ectric Shaving

 Occasion im%ortance of %"rchase "ser e+%erience Prior e+%erience /ith the %rod"ct

!ge" 1ender" -ncome" 'amily &ize" *ifecycle &tage" 1eographic *ocation " *ifestyle

'.

2.

1.

&egmentation ,ariables of a consumer .)(%U T$ #!)4+T

5"yersA .eeds? Preferences

0rand *oyalty" &tatus" 0rand .reference" 0enefits &ought" 2uality

$.

P"rchase 3se Sit"ation

)haracteristics of Peo%#e? Organi>ations

2. -dentifying #arket &egments

5ehavior

. &ize !nd 're3uency (f .urchase

2. -dentifying #arket &egments

&egmentation ,ariables of a consumer .)(%U T$ #!)4+T

#ost segmentation currently is psychographic

5espresso #ondoleez

Strategic Marketing &

Pakistani attit"dina# segments

)eligious conservatives $ anti$ media" information averse" not brand concious 16 33 & ocial conformists $ lack self confidence" depends on others to make decisions 17 .ragmatic strivers $ non traditional" ambitious" open minded 5ew age moslems $ religious" pro media" interested in trends / fashions *iberals $ broad minded" independent" assertive

33

3. riteria for 'orming #arket &egments $

Segmentation 2e="irements of a Prod"ct&Market

1. 2. '. $. -. 6. Bavorable ost80enefit 2esponse %ifferences *ctionable &egments Product %ifferentiation Identifiable &egments Stable (ver Time

M eas"rab#e .S"bstantia# *ccessib#e ( ifferentiab#e *ctionab#e

3. riteria for 'orming #arket &egments $

9.-dentifiable &egments 3.!ctionable &egments

2. )esponse %ifferences

7.&tability (ver Time

Segmentation 2e="irements Of a Prod"ct&Market

1. 'avorable ost80enefit

:..roduct %ifferentiation

:. 'iner segmentation strategies

Logic of finer segments

1. 2. '.

)ustomized offerings (iverse customer base )lose customer relationships

Biner segmentation strategies

. . .

Micro $ segmentation Mass customization ,ariety$seeking strategy

-. S0L0)TI.6 T40 S06M0.T*TIO. ST2*T06;

1. 2.

%eciding how to segment &trategic analysis of market segments

ustomer analysis ompetitor analysis .ositioning analysis +stimating segment attractiveness &egmentation ;fit< with company capabilities

Strategic Marketing

M*2E0T

4ey#ens mode# Prod"ct Ty%e Positioning

Externalised
ne e rg ti c
W ar

S06M0.T*TIO.

Fresh Skim
Assertive

Fresh Reduced
Affiliative

UHT Reduced

Fresh Full Cream

UHT Skim
Co ol

UHT Full Cream

Su u bd ed

Internalised

Impm ap

6rid for matching com%any ca%abi#ity to market segments

4igh 4igh *ow

*ttractive Segments *ttractive Segments Perfect Match !verage match

Market Segment *ttractiveness 3nattractive Segments 6ood Match 3nattractive Segments .oor #atch

*ow

-nternal ompatibility