Target MarketMarket:Market: people or institutions with sufficientpurchasing power, authority, and willingness to buyA target market is a group of people towardwhom a firm markets its goods, services, or ideaswith a strategy designed to satisfy their specificneeds and preferences.
Types of Markets:Consumer Markets:Consumer Markets:Goods or services purchased by an ultimateconsumer for personal use. They sell the products tomass.Eg. Soft drinks,Cosmetics etc.
Business Markets:Business Markets:Goods or services purchased for use either directly orindirectly in the production of other goods andservices for resale.E.g.. Heavy equipments,building etc.
Global markets: When the company expand theirbusiness and placed their products to internationalmarket.Non-profit and Governmental market: eg. NGO
The Role of Market SegmentationMarket Segmentation:Market Segmentation: division of the total marketinto smaller, relatively homogeneous groupsNo single marketing mix can satisfy everyone.Therefore, separate marketing mixes should be usedfor different market segments.
Step 1. Market SegmentationBases for Segmenting Consumer MarketsGeographicDemographicAge, gender, family sizeand life cycle,or incomePsychographicSocial class, lifestyle,or personalityBehaviouralOccasions, benefitssought, user status,usage rate, loyaltyNations, states,regions or cities
Advantages of Segmentation:Increase in competitivenessMarket expansionCustomer retention Have better communication
• Size, purchasing power, profilesof segments can be measured.• Segments can be effectivelyreached and served.• Segments are large orprofitable enough to serve.MeasurableMeasurableAccessibleAccessibleSubstantialSubstantialDifferentialDifferentialActionableActionable• Segments must responddifferently to different marketingmix elements & programs.• Effective programs can bedesigned to attract and servethe segments.Requirements of effective marketsegmentation:
Steps in Segmentation, Targeting, andPositioning :1. Identify Basesfor Segmenting the Market2. Develop Profilesof Resulting Segments3. Develop Selection Criteria4. Select TargetSegment(s)5. Develop Positioningfor Each Target Segment6. Develop MarketingMix for Each Target Segment MarketPositioningMarketTargetingMarket Segmentation
Levels of Market Segmentation:Mass MarketingSame product to all consumers(no segmentation)Mass MarketingSame product to all consumers(no segmentation)Segment MarketingDifferent products to one or more segments(some segmentation)Segment MarketingDifferent products to one or more segments(some segmentation)MicromarketingProducts to suit the tastes of individuals and locations(complete segmentation)MicromarketingProducts to suit the tastes of individuals and locations(complete segmentation)Niche MarketingDifferent products to subgroups within segments(more segmentation)Niche MarketingDifferent products to subgroups within segments(more segmentation)Local MarketingTailoring brands/ promotionsto local customer groupsIndividual MarketingTailoring products/ programsto individual customers
Step 1. Market SegmentationBases for Segmenting Business MarketsBasesfor SegmentingBusinessMarketsBasesfor SegmentingBusinessMarketsDemographicsPersonalCharacteristicsSituationalFactorsOperatingCharacteristicsPurchasingApproaches
Segmenting BusinessMarketsSegmentation by customer size or geographic locationFour segments of business customersProgrammed buyersRelationship buyersTransaction buyersBargain hunters
Market TargetingFocusing marketing decisions on a veryspecific group of people an organizationwants to reach.Identifying and developing products/services for a specific market.
Evaluating Market Segments(developing selection criteria)Segment Size and Growth Analyze sales, growthrates and expected profitability for various segments.Segment Structural Attractiveness effects of:Competitors, Availability of Substitute Products and,Company Objectives and ResourcesCompany skills & resources relative to the segment(s).Look for Competitive Advantages.
when a firm produces only one product or productline and promotes it to all customers with a singlemarketing mixSometimes called mass marketingMuch more common in the pastUndifferentiatedMarketing
when a firm produces numerous products andpromotes them with a different marketing mixdesigned to satisfy smaller segmentsTends to raise costsFirms may be forced to practice differentiatedmarketing to remain competitiveDifferentiatedMarketing
when a firm commits all of its marketing resources toserve a single market segmentAttractive to small firms with limited resources and tofirms offering highly specialized goods and servicesConcentratedMarketing
Step 2. Market TargetingChoosing a Market-Coverage StrategyCompanyResourcesProductVariabilityProduct’s Life-CycleStageMarketVariabilityCompetitors’Marketing Strategies
Most attractive target marketsA firm must evaluate the various segments ,decide howmany &which ones to target:Single segment concentration.Selective specialization.Product specialization.Market specialization.Full market coverage.
POSITIONING Positioning is the development of a service and amarketing mix to occupy a specific place in the minds ofcustomers within target markets.Positioning is what the customer believes about yourproduct’s value, features, and benefits; it is a comparisonto the other available alternatives offered by thecompetition. These beliefs tend to based on customerexperiences and evidence , rather than awareness createdby advertising or promotion.Marketers manage product positioning by focusing theirmarketing activities on a positioning strategy. Pricing,promotion, channels of distribution, and advertising allare geared to maximize the chosen positioning strategy.
1. Positioning by products attributes andbenefits: Associating a product with an attributes, aproduct feature or a consumer feature.Sometimes a product can be positioned interms of two or more attributes simultaneously.The price and quality dimension is commonlyused for positioning the products.Like, Colgate offers benefit of preventing cavityand fresh breath.Ariel offers a specific benefit of cleaning even thedirtiest of clothes because of the micro cleaning
2.Positioning by price/ quality:One way they do it is with ads that reflect theimage of a high_ quality brand where cost, while nnot irrelevant, is considered secondary to thequality benefits derived from using the brand.The Wheel detergent or Rin soap which alwaysfocuses on the value addition and price.3.Positioning by use or application:Another way is to communicate a specificimage or position for a brand is to associate it witha specific use or application.Surf Excel is positioned as stain remover ‘Surf
4. Positioning by product class:Often the competition for a particular productcomes from outside the product class. The productis positioned against others that, while not exactlythe same, provide the same class of benefits.Dove is positioned as a moisturizer, not a soap.5. Positioning by product user:Positioning a product by associating it with aparticular user or group of users is yet anotherapproachMotorola Mobile Ad , Facebook.
6. Positioning by competitor:Competitors may be as important topositioning strategy as a firm’s own productor services. This approach is similar topositioning by product class, although in thiscase the competition is within the sameproduct category.Moov compares itself with Iodex.7.Positioning by cultural symbols:An additional positioning strategy where Ithe cultural symbols are used to differentiatethe brands.Humara Bajaj, Tata Tea symbols hassuccessfully differentiated the product
Steps to Choosing andImplementinga Positioning StrategyStep 1. Identifying a set of possible competitiveadvantages: Competitive Differentiation.Step 2. Selecting the right competitiveadvantage.Step 3. Effectively communicating anddelivering the chosen position to the market.