Amity Business School

Amity Business School

MBA Class of 2010, Semester I
Target Marketing
Mamta Mohan
mamtam@abs.amity.edu

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STP process
Identifying those particular groups of customers,
which your product/service is capable of meeting
their requirements (needs) most.
Each of these groups constitute a market segment
Selecting one or more segments to enter
Establishing and communicating the products
key distinctive benefits in that market

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Issues
What are the different levels of market
segmentation?
How can the company divide a market into
segments?
How can a company choose a most
attractive segment?
What are the requirements for effective
segmentation?

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Market Segment
A large identifiable group within a
market with similar wants, purchasing
power, geographical locations, buying
attitudes

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Levels of segments:
Mass marketing
Micromarketing; segments, niches, local
areas, and individuals

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Niche Marketing

What is an attractive niche ?

A distinct set of needs
A premium can be charged
Not likely to attract competition
Gains certain economies through
specialization
Sufficient size, profit and growth
potential

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Local Marketing
When the marketing mix is altered to suit
the local conditions
e.g.. Giving a higher/ lower discount than
whats prevailing in the rest of the markets
or implementing a different promotion
scheme

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Individualized Marketing
When the firm deals with each customer
on a one to one basis
Customerization- When products are
customized for the customer

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Bases for Segmentation

Geographic territory demarcations
Demographic age, family size,
sex, income,education, religion, generation
social class etc.
Psychographic lifestyle, personality, values
Behavioral decision roles, user status, usage,
Occasions, benefits, rate, buyers readiness,
loyalty status, Attitude

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Segmenting by Income and

Expenditure Patterns
Engels Laws, as family income increases:
A smaller percentage of expenditures go for food
The percentage spent on housing and household
operations and clothing remains constant
The percentage spent on other items (such as
recreation and education) increases.

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Psychographic Segmentation
Divides a population into groups that have
similar psychological characteristics,
values, and lifestyles
Lifestyle: peoples decisions about how to
live their daily lives, including family, job,
social, and consumer activities
The most common method for developing
psychographic profiles of a population is to
conduct a large-scale survey
AIO statements
VALS and VALS 2
Values and Lifestyles

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Using Psychographic
Segmentation
Psychographic profiles
produce rich descriptions
of potential target markets
Greater detail aids in
matching a companys
image and its offerings
with the types of
consumers who are likely
purchasers.

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Behavioral variables
Occasions birthdays, lunchtime, vacations
Benefits eg. travel business, vacation,
educational
User status non users, ex users, first time
users, regular users, potential users
Usage rate light, medium, heavy

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Loyalty status diehards, shifters, switchers

Buyer Readiness unaware aware informed
interested desire intention to buy
Attitude enthusiastic, positive, indifferent,
negative, hostile

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Brand Loyalty
Segmenting consumers grouped according to the
strength of brand loyalty felt toward a product
Frequent flyer programs of airlines and many hotels

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Criteria for segmentation

Measurable
Substantial
Accessible
Differentiable
Actionable

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The Market Segmentation Process

Develop a Relevant Profile for each
Segment
Forecast Market Potential
Forecast Probable Market Share
Select Specific Market Segments

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Market Targeting( strategies)

Single segment concentration

Selective specialisation
Product specialisation
Market specialisation
Full Market coverage
-undifferentiated marketing
-differentiated marketing

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Undifferentiated Marketing
Single product addressing all segments
with a single marketing program.
Mass production is possible giving
scale economies
Pushes price downwards enabling to
attract price sensitive segments

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Differentiated Marketing
A separate market offering for every
segment
Marketing programs for every segment
could be different
Pushes up costs at various levels,
necessitating sufficient volumes for
viability
Generates inter-segment rivalry

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Positioning: a marketing strategy that

emphasizes serving a specific market
segment by achieving a certain position
in buyers minds

Attributes
Price/quality
Competitors
Application
Product user
Product class

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Positioning map
Graphic illustration that shows differences
in consumers perceptions of competing
products
Reposition
Marketing strategy to change the position
of its product in consumers minds relative
to the positions of competing products

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Hypothetical
Competitive
Positioning
Map for
Selected
Retailers