STP-Mktg Mgt

8/3/2019 STP-Mktg Mgt

1/19

9.1

Segmenting and Targeting

the Market


2/19

9.2

Number of Product Categories with

Relative Penetration of Top Three Brands

Ratio of

Penetration

Income Category Urban Rural

High Ratio Low

Low Middle

Middle High

5

5

8

4

3

7

Medium Ratio Low

Low Middle

Middle High

1

3

-

2

4

-

Low Ratio LowLow Middle

Middle High

43

-

42

3

Note : The top three brands are concentrated in the high ratio. It shows that in relation to the

other brands in the category the tope three are dominant. This is more so among the middle

and high levels of incomeSource: NCAER: Consumer Market Demographics in India (Revised Ed), Ed: S.L. Rao, Jan 1994, p.18


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9.3

Below

SSC

66%

SSC

Grad

26%

Grad

8%

SSC

Grad

33%

Below

SSC

58%

Grad

9%

TV

Viewers

46%

Non-

Viewers

54%

TV

Viewers

62%

Non-

Viewers

38%

Ilterate

42%Literate

58%

Ilterate

42%Literate

58%Non

Work

80%

Work

13%

Student

7%

Non

Work

76%

Work

15%

Student

9%

1983 1990

A: Literacy Profile

1983 1990

C: Education Profile

1983 1990

B: Occupational Profile

1983 1990

D: TV Viewership


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9.4

Rural Customers

Brand

Price

Size

Feature

Rural Customers

Brand

Price

Size

Feature

Rural Customers

Brand

Price

Size

Feature

Rural Customers

Brand

Price

Size

Feature

Lower Income H.H.Middle Income H.H.

Upper Middle Income H.H. Rich H.H.


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9.5

Very

Rich: 1.2

Consuming

Class: 32.5

Climbers: 32.5

Aspirants: 44.0

Destitute: 33.0

Segmenting the Indian Market: The Income Route


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9.6

C(19.5%) Skilled Workers,clerks, salespersons etc

D(22.4%) Same as above, occupation profile with SSC

E1&E2 (13.2%) Primarily unskilled labour

Socio-Economic Pyramid of Indian Population


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9.7

Segmentation

Market segmentation is the process of dividing a heterogeneous

market into homogenous sub units.

Need for segmentation

To be able to compete in a highly competitive market.

To position itself as segment leader.

To gain competitive edge.


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9.8

BASES FOR SEGMENTING THE MARKET

(a) Customer based segmentation(b) Product related segmentation

(c) Competition related segmentation

Customer Based Segmentation

Geographic location of customers:

RURAL vs. URBAN METRO vs. NON METRO


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9.9

Demographic Characteristic

Age

Sex Child Pester Power

Youth Market

Income

Occupation Gender

Education

Marital Status

Family Size & Structure Psychographic Variables

Life Style

Personality

Buyer Readiness


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9.10

Where Kids Reign Supreme Role in FMCG purchase

71

5952 49 47

4237 36

32 31

0

10

20

30

40

50

6070

80

1

FMCG

%o

fkidswhoaffluence

what

FMCGbrandtheirfamilybuys

Biscuits

Burgers & PizzasFruit Juice

Shoes

Hot milk additives

Cheese

Tomato ketchup

Tooth pas te

Soap

Shoepolish

Where kids reign supreme in FMCG purchase-Case of

food products


11/19

9.11

Product Related Segmentation

Product Use situations Different customers may use the

same product in different situations.

Benefits Segmentation Marketers identifies benefits that a

customer looks for when buying a product.

Quantity consumed- one of the basis of segmentationbeverages tea ,coffee,soft drinks,liquor and cigarette

markets.Following segments are visible

a) Heavy users

b) Moderate users

c) Light users


12/19

9.12

Product Related Segmentation

Decision Criteria Used by customer to evaluate and buy a brand

or the product. Following four parameters are considered inconsumer decision making today

Price

Perceived quality of the product/ service

Service offered by the firm Technology


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9.13

ReligiousPrefers to work hard themselves

Anxious and worriedabout change

Seeking equality

Quality conscious

Disturbed by vulgarity and Western

influences

Seeking luxury

Outgoing

Fashion conscious

Bolder and liberatedSeeking economy

Self- sacrificing

Social conservatism

Self Denial Pleasure

Sec D

Sec C

Sec B

Sec A

Sec A1+

Contemporary Indian womenBy Sec Group


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9.14

Bolder

Outgoing

Consumerist

Anxious , worried about

change

Nostalgic

Self- indulgent

Discontented

Fashion conscious

Seeking freedom Seeking pleasure away from home

Impulsive

Disturbed by vulgarity and Western

influences

Discomfort with luxury Discomfort with vulgarity

Guilt about spending on self

Self sacrificing

20-29years30-39 years

40-49 years

15-19 years

50+years

Modern/Individualistic Traditional/conservative

By Age


15/19

9.15

Competition Based Segmentation

Hard Core Loyal

Soft Core Loyals

Switchers


16/19

9.16

Segmenting Industrial Markets

Based on Size & purchase of the customer,there are

a) Category customers large buyers

b) Category customers medium sized buyers

c) Small buyers

Geographical Location Firms located in a particular region

form a part of segmentation

End Use

by differentiating end users of firms products Within end use segment further market can be segmented on

basis of purchase criteria.

Combining purchase criteria, size and geography Matrix

form of market segmentation .


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9.17

Segment 1 Segment 2 Segment 3 Segment 4

Buyer characteristics

and buying motives

Marketing mix

(a)Large

(b)Average order

size Rs.2,00,000

(c)Standard

product

(d)Quality

conscious

(e)Competitive

price-price

important(f)Delivery

crucial

(g) Western India

(a)Large

(b)Average

order size Rs.2,00,000

(c)Standard

product

(d)Not much

'concerned

about

quality

(e)Extendedcredit

If)Highly

price sensitive

(g) North

India

(a)Medium sized

(b)Average order size

Rs. 2,00,000(c)Tailor-made product

(d)Moderate on price

sensivity

(e)Value for money

(f)Vendor reliability

(g) Extended credit

(h) Returns Policy

(i) South based

(a)Small

(b)Avemge order

size Rs. 2,00,000(c)Tailor-made

product

(d)After sales

service

(e)Price sensitivity low

Spread all over India

Product quality

product features

Warranties

After sales service

Financmg plans

Price

Credit terms

Delivery

Prompt availability

Personal selling

Direct mail

Yes

No

No

No

No

Yes

No

Yes.

Yes

Maybe

May be

No

No

No

No

No

Yes

'Yes

May be

May be

May be

May be

Yes

Yes

Yes

Yes

Maybe

Yes

Yes

Yes

Yes

Yes

Mav he

Yes

Yes

Yes

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

Buying Behaviour/Motivation or Purchase Criteria

Market Segmentation in Industrial products --The matrix Approach


18/19

9.18

Three Stages of Market Segmentation

Survey Stage- Divided into two parts-

1) Focus group discussions & in depth interviews with a view to getting an

insight into consumer motivation,attitudes and behavior.

2) Based on this insight, developing a questionnaire for a sample group of

customers.

Analysis Stageusing factor analysis. Identifying factors that differentiate

customer groups. Profiling Stage- Each cluster is profiled in terms of demographics,

psychographics, media habits,attitudes,behavior and consumption habits.

Requirements for Effective Segmentation-

a) Accessibility

b) Measurable

c) Viable

d) Intensity in Competition.


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9.19

Targeting Strategies

StandardizationFirm offers the same product to different market segments.

It uses the same communication,pricing and distribution strategies.

Differentiation

Focus - Focus is a combination of standardization & differentiation, where

the core strategy remains the same,but differentiation is made to take into

account specific customer group requirements.

Positioning- the differentiation could be along following lines-a) Product

b) Service

c) Channel

d) Price

e) People

f) image

Documents

STP-Mktg Mgt