mkt segmentation, targeting & positioning.pptx

7/27/2019 MKt Segmentation, Targeting & Positioning.pptx

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UNIT-3

MARKET SEGMENTATION, TARGETING

AND POSITIONING

Concept of Market:

The word market was derived in English fromLatin word Marcatus. Its meaning is tradingplace of transaction. As the word marketing hasbeen formed from the word market it is

necessary to be clear about the concept ofmarket in the marketing subject. The followingconcepts can be studied to be clear about themeaning of the term market.


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1. Place concept: Generally, the word market

refers to the place where buying and selling ofgoods is performed. The comfortable place

where sellers and customers meet together

and exchange goods or service is calledmarket. Although the word market was

evolved from the place of transactions, it is

used for a broad meaning in economics. Nowa days , the term market does not represent

only a certain place.


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2. Commodity concept: The commodity concept

of market places emphasis on buying and selling

of goods or services. The process of buying andselling of goods or services that takes place

between a buyer and a seller is called market.

The economist Chapman has said, Economicallyinterpreted the term market refers not to place

but to a commodity or commodities and buyers

and sellers and they should be in direct

competition with one another. In this way, the

place is not important in economics for market.

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It needs commodities or services, buyers andsellers and relations or interaction among them.

3. Exchange concept: Exchange concept ofmarket puts emphasis on mutual meetingbetween the buyer and the seller and their freerelationship. To be market, this concept lays

emphasis on free relationship between buyersand sellers and on equality of price of the samegoods from competition. But in practice,competition of the same price for the same typeof goods cannot always be found in all goods. Insome products, monopoly of sellers can befound.


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4. Area concept: The area concept of market is

related with exchange concept. According toarea concept of market, the meaning ofmarket is the whole area where sellers andbuyers make exchange directly or indirectly

without direct contact or using modern meansof communication in free and open manner.So in area where seller sell and buyers buygoods or services in free and frank ways iscalled market. Market area may be limited orvast.


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5. Demand or customer concept: According to

demand concept of market, the total demand of

actual and potential buyers for goods or servicesis market concept. As it is fulfill the unlimited

human needs and wants through limited means,

buyers buy only necessary goods or services.Todays very popular thing may be unpopular

tomorrow. Its demand may decrease to zero. So

market depends on consumers demand. So,

according to this concept, the total or aggregatedemand of consumers for goods or services is

called market.


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6. Space or Digital concept: Space concept isnear concept of market. It is based on internet.

Producers or sellers put valuable informationabout their goods and services. Customers canselect needed goods and services searchinginternet. The digital communication media like

telephone, telex, computer, Internet etc havemade the direct contact between the customerand the seller a minor matter. According to this

concept mentioned above there should bebuying and selling between buyers and sellers tobe market, but it is not compulsory to have adirect meeting them.


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Concept of Market Segmentation:The process of exchanging goods or services is

called market. There may be different kinds ofcustomers in market. Only one type of firm cannotfulfill /meet all the needs of all customers. So, a firmshould classify the market on different basis and

identify target market, in same is called marketsegmentation. Consumer market can be segmentedon geographic and demographic levels, population,psychographic and behavioral basis. Similarly,

industrial market can be segmented on the basis ofgeographic, demographic , operation andpurchasing system.

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Customers may be of different types according totheir needs, want, interest, buying purpose,buying habit, age, gender, education, religion,

income level and place. So, market segmentationshould be made deeply studying and analyzingsuch factors.

According to Prof. Philip Kotler, Market

Segmentation is the act of identifying, profilingdistinct group of buyers who might requireseparate product and /or marketing mixes.

According to Ronald W. Hasty and W.R. Ted,

Segmenting markets simply divides theheterogeneous mass market into groups each ofwhich has one or more homogeneouscharacteristics.


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While segmenting market, very practical strategyshould be formed. The characteristics of thecustomers of segmented market should be similarwhile segmenting the total market. For instance, onthe basis of income level, middle income level andhigh income level. On the basis of age, market canbe segmented in 4 categories such as childrens

market, teenagers market, youths market, eldersmarket. Similarly on the basis of gender, market canbe segmented in 2 categories like females marketand males market. Generally, the character of same

income level customers becomes same. Similarly,the character of same aged customers becomes thesame. Generally, the character of the customers ofthe same segmentation becomes same evensegmented on other basis.


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In conclusion, the process of dividing total marketinto several small parts on the basis of customersneed want, buying purpose, buying habit, age,education, gender, religion, income, place etc iscalled market segmentation. Market segmentationis made in a way that generally, the characteristicsof all the customers within same segmentation are

similar. As it is difficult to satisfy all types ofcustomer by a firm, it should identify targetmarkets byt making market segmentation andshould develop proper marketing mix. Market

segmentation is customer oriented mission inwhich total market is divided into several parts ofsame characteristics by identifying customersneeds or wants to supply them with their demands.


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Process of Market Segmentation

It is not possible to develop the marketing strategiesfor every consumer. Rather the marketer attemptsto identify broad classes of buyers who have thesame needs and wants and will respond similarly toa marketing action. Market segmentation is dividingup a market into distinct groups that a) havecommon wants b)will respond similarly to amarketing action. The segmentation processinvolves following distinct steps:-

1. Survey stage:

The researcher conducts interviews with theconsumer to take the responses from them relatingto their motivation, attitudes and behavior.

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For conducting the survey, the researcher

prepares the questionnaire and applies it tosome of potential customers.

2. Analysis Stage:

After collecting the responses from therespondents the next stage is to turn them

into meaningful form through analysis using

factor analysis. After that the researcherapplies cluster analysis to make division of

homogeneous responses.


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3. Profiling stage:

Each homogeneous cluster is now profiled in

terms of its distinguishing attitudes,psychographic, geographic and demographic andconsumption habits. Each segment can be given adifferentiating name.

4. Segment Selection:

The last step of the segmentation processinvolves segment selection. Once the marketsegments are evaluated, marketer has to selectthe market segments to enter. Segment selectioninvolves strategic decisions on segment analysis,market coverage patterns, inter segmentrelationships and segment invasion plan.


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Objectives of Market Segmentation:

1. Identification of market opportunities:

It is also important objective/aspect of marketsegmentation to identify market opportunities.Size, development and wants of each segmentcan be analyzed by dividing total market inseveral segments. Besides, characters of the

customers of each segment and possible profitalso can be analyzed by segmenting the market.Market opportunities can be identified from suchanalysis. More profitable market segment can be

chosen leaving aside the less profitable one. As aresult, the business firm becomes able to achieveits goal.


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2. Effective use of marketing resources:

The other important aspect/objective of marketsegmentation is to able to use marketing resources

effectively. Marketing resources can be effectivelyused by using separate marketing mixes for eachsegment. Goods or services can be producedaccording to the demand of market segment. Price of

goods and services can be fixed according to thepurchasing power of the customers of each segment.Promotional activities also can be conductedaccording to the market segment. Proper distributionchannel can be selected according to the demand

and wants of the segment. If market is notsegmented, it becomes difficult to produce suitablegoods or services to all segments, fix price, conductpromotional activities and select distribution

channel.


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3. Evaluation of competitors:

The other important objective of marketsegmentation is successful evaluation of

competitors. It is necessary to get all informationabout competitors situation of each segment frommarket segmentation. Their weak and strongaspects can be identified through their evaluation.

True information about competitors strategy andmarketing mix can be obtained.

4. Strategic planning:

The other important aspects/objectives of market

segmentation is to help in making effective strategicplans. Strategic plans can be made for each marketsegment by segmenting market.

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Information about number of customers, purchasingbehavior of customers, their purchasing power andpurchasing purpose should be obtained for making

strategic plans. If a detail study is carried out ofmarket segment by segmenting market, informationabout all these matters can be acquired.

5. Effective marketing mix:

The other important objective of marketsegmentation is to be possible for effective marketingmix. True information about customers interests,their habit, custom, purchasing power, purchasingbehavior, buying motives etc can be acquired formmarket segmentation. Proper marketing mix can beprepared for each market segment on the basis ofsuch information and can be implemented effectively.


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6. Environment adaptation:

Environment is an important component to affect

any business organization. If environment is

made favorable to the organization, business

success can be easily achieved. Environmental

components of small segments can also beidentified through market segmentation. The

quick changing environment can be anticipated.

As a result, business organization can be made

adaptable to the environment by marketing mix.


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Need of market segmentation:

1. Divisible: Market should be made divisible formarket segmentation. Market should be dividedon the basis of purchasing power, purchasingpurpose, purchasing habit, lifestyle, living style,

gender, religion, place etc. While dividing market,the customer having same wants and charactershould be grouped. Doing so, it becomes easy toform marketing mix strategy. If the total market is

not easy to divide and has no characters,adopting market segmentation policy becomespossible.


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2. Measurable: Customers wants, purchasing

power and characteristics should be measurable.

Besides, the information necessary for marketsegmentation also should be easily available.

Customers income, age, gender, etc can be easily

obtained and measured. But beliefs, perception

and attitude of the customers cannot bemeasured. So, market segmentation should not

be made on the basis of the components which

cannot be measured because true informationcannot be obtained. From it. As a result, it

becomes difficult to make marketing mix.


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3. Accessible: Market segmentation should be

made in a way that it becomes easy to reachthere and provide effective services. Marketsegmentation should be made in a way thatmarketing activities such as distribution,

advertisement media, selling efforts etc can reachthere easily. If market segmentation is madebeyond the access, it becomes difficult to reachthere, provide goods or services and market

segmentation becomes ineffective. So, thesefactors should be well thought and consideredwhile segmenting market.


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4. Substantial: Profit components should not be

missed while segmenting market. If profit cannot

be earned form providing goods or services tothe customers, a business firm cannot make

sustainable development. The main purpose of

market segmentation by target market is to each

profit. So, market should be segmented so that

profit can be clearly seen. For this, market

segments should be sufficient and satisfactory. If

the market segment is small, it becomes difficultto earn profit.


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Target Marketing:

Concept:

A target market is a group of customers that the

business has decided to aim its marketing effortsand ultimately its merchandise towards.[1] A well-defined target market is the first element to amarketing strategy. The marketing mix variables of

product, place (distribution), promotion and priceare the four elements of a marketing mix strategythat determine the success of a product in themarketplace.

Under target marketing, customer groups or marketsegments having similar needs and characteristicsare identified and appropriate marketing mixes aredeveloped for each market segment.

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Here, the organization does not try to meet thespecific needs of individual buyers; rather itsefforts are concentrated on meeting the general

needs of the customer groups.Target marketing is the most popular form ofsegmentation. After evaluating differentsegments, the company must now decide which

and how many segments it will target. A targetmarket consists of a set of buyers who sharecommon needs or characteristics that thecompany decides to serve. Because buyers haveunique needs and wants, a seller could

potentially view each buyer as a separate targetmarket.


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Ideally, then, a seller might design a separatemarketing program for each buyer. However, althoughsome companies do attempt to serve buyers

individually, most face larger number of smaller buyersand do not find individual targeting worth while .Instead, they look for broader segments of buyers.

Types of Target Market:

1. Age Target MarketingTargeting a product to a particular age group orgenerational cohort is a way to concentrate yourmarketing efforts and generate product interest

within that particular group. According to"Entrepreneur's website, extensive research isnecessary for age or generational marketing todetermine the status and living situations ofconsumers in your potential target group.


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3. Gender-Specific Marketing

Gender-specific marketing shapes an advertising

campaign toward one gender or specific groupwithin that gender. For example, target marketingtoward pregnant women seeks to generate moreinterest in your small business's goods andservices within that particular group. How your

small business accomplishes this task depends onthe outcome of your market research and genderneeds within your local marketplace. Thisresearch may influence the types of images,

colors and language you use in your marketingcampaign to attract your target gender or gendergroup to your company's products or services.


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4. Geographic Target Marketing

Geographic areas across the country havedifferent product needs. Targeting a marketing

campaign to meet the signature geographicdemands of consumers in your marketplace canboost your company's importance and necessityin the minds of consumers. This strategy also

works with seasonal marketing campaigns to takeadvantage of shifting consumer moods as theweather turns hot or cold. For example, manybeverage companies roll out pumpkin-flavoredhot drinks during the fall to catch consumers

turning attention toward Thanksgiving and colderweather.


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Introduction to Market Positioning

Market positioning is the manipulation of a brand

or family of brands to create a positiveperception in the eyes of the public. If a product

is well positioned, it will have strong sales, and it

may become the go-to brand for people who

need that particular product. Poor positioning, on

the other hand, can lead to bad sales and a

dubious reputation. A number of things are

involved in market positioning, with entire firmsspecializing in this activity and working with

clients to position their products effectively.


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When a product is released, the company needsto think beyond what the product is for when itcomes to positioning. It also thinks about the

kinds of people it wants to buy the product. Forexample, a luxury car manufacturer might be lessinterested in promoting reliability, and moreinterested in promoting drivability, appealing topeople who are looking for high-end cars whichare enjoyable and exciting to drive. Conversely, acompany making mouthwash might want to gofor the bottom end of the market with anappealing low price, accompanied by claims

asking consumers to compare to the leadingbrand so that they can see that the productcontains the same active ingredients as a famousbrand, at a much lower price.


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Market positioning is a tricky process. Companiesneed to see how consumers perceive theirproduct, and how differences in presentation canimpact perception. Periodically, companies mayreposition, trying to adjust their perceptionamong the public. For example, a company might

redesign product packaging, start a new adcampaign, or engage in similar activities tocapture a new share of the market.

Companies also engage in depositioning, in which

they attempt to alter the perception of other brands.ctd.


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While outright attacks on rival brands are frowned

upon and may be illegal unless they are framed

very carefully, companies can use language likecompared to the leading brand or we're not like

those otherbrands. A television ad, for example,

might contrast two paper towels: the brand being

advertised, and a generic with a package whichlooks suspiciously similar to a popular brand of

paper towels, but isn't quite identical.

Developing a market positioning strategy is animportant part of the research and development

process.

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The marketing department may providenotes during product development which

are designed to enhance the product'sposition, and they also determine theprice, where the product should be sold,and how it should be advertised. Everyaspect of the product's presentation willbe carefully calculated to maximize itsposition, with the goal of market

positioning being domination.

mkt segmentation, targeting & positioning.pptx

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