Market Segmentation

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MARKET SEGMENTATION

BY- SUNIT KUMAR MISHRA

• CONCEPT AND DEFINITION The concept of market segment is based on the fact that the market of commodities are not homogeneous but they are heterogeneous. Market represent a group of customer having common characteristics but two customer are never common in their nature, habits, hobbies income and purchasing techniques.

• According to Philip kotler , “ Market segmentation is sub-dividing a market into distinct and homogeneous subgroups of customers, where any group can conceivably be selected as a target market to be met with distinct marketing mix.”

• Market Segmentation is a method of “dividing a market (Large) into smaller groupings of consumers or organisations in which each segment has a common characteristic such as needs or behaviour.”

Henry Ford epitomized this strategy when he offered the Model- T Ford in one colour , black.

LEVELS OF MARKET SEGMENTATION

1. SEGMENT MARKETING
Consists of a group of customers who share a similar set of needs and wants. Identifiable Group with in a Market with Similar • Wants • Purchasing Power • Geographical Location • Buying Attitudes

FLEXIBLE MARKET OFFERING
• Even in segments 100 % needs are not same – consists of two parts 1.Naked Solution :- products and services that all members of the segment values. 2.Discretionary options :- that some segment members value. Each option might carry an additional charge.  Example: Automobile industry – basic model is same but for A.C , power steering, power window buyer

has to pay extra price.  Delta Airlines offers all economy passengers a seat and soft drinks. It charges economy passengers extra for alcoholic beverages.

 Market Segments can be defined in many different ways. One way to carve up a market is to identify Preference segments Suppose ice cream buyers are asked how much they value sweetness and creaminess as two product attributes. Three different patterns can emerge.

Homogeneous preference :
– where all the consumer have roughly the same preferences. – We would predict that existing brand would be similar and cluster around the middle of the scale in both sweetness and creaminess.

Diffused preference :
– consumers vary greatly in their preferences

Clustered preference :

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

2. NICHE MARKETING

Group of customers seeking a distinctive mix of benefits who are ready to pay extra premium.  Niche = segment sub – segments Eg. Washing detergents hard & gentle washes . Surf excel for tough stains ( hard on clothes) & Ezee from Godrej for delicate clothes. --- Astha , Sanskar , Q TV – focus on religion & spiritualism.  DISTINCT NEEDS  PAY PREMIUM  SPECIALIZATION  LESS COMPETITION  POTENTIAL

ROLLS ROYCE

3. LOCAL MARKETING
• Marketing programs tailored to the needs & wants of local customer groups in trading areas, neighborhoods , etc. • this trend is called grass roots marketing. Ex. – Spiderman 3 was released in 5 different language in India including bhojpuri.

Chitle
Kashmiri silk

Pune sarees

4. INDIVIDUAL MARKETING

Ultimate segmentation – segments of 1 or customized marketing or one to one marketing. • Customerization – empower the consumers to design the product or service offering of their choice. • Ex. Paint companies have started doing this- Asian Paint , Nerolac , Berger Paints • Arvind mills launched Ruff’n Tuff Jeans, branded ready – to – stitch

GEOGRAPHIC SEGMENTATION
Divide the market into different group based on : • Region – South India , North , Western Region, East • City – metro cities, cities with population more than 1 million • World • Density • Climate • States...
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