S.No. - 2/3LECTURE TITLE – MARKET

SEGMENTATION

MODULE – 2 (HEALTHCARE MARKETING AND PATIENTS RELATIONS MANAGEMENT

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Market Segmentation ICRI, Mumbai

Steps in Market Segmentation, Targeting, and Positioning

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Market Segmentation (Research)1. Identify bases for segmenting the market2. Develop segment profiles

Market Targeting3. Develop measure of segment attractiveness4. Select target segments

Market positioning5. Develop positioning for target segments6. Develop a marketing mix for each segment

Step 1. Market SegmentationLevels of Market Segmentation

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Through Market Segmentation, Companies Divide Large, Heterogeneous Markets into Smaller Segments that Can be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs.

Mass MarketingSame product to all consumers (no segmentation, e.gn early nineties - Coca-Cola/ in eighties – Ford ; only black)

MicromarketingProducts to suit the tastes of individuals and locations (complete segmentation)

Levels of Market Segmentation

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Niche MarketingDifferent products to subgroups within segments(more segmentation, i.e. Standard or Luxury SUV’s)

Segment MarketingDifferent products to one or more segments(some segmentation, i.e. Marriott/ airlines)

Local MarketingTailoring brands/ promotions to local customer groups, i.e Sears

Individual MarketingTailoring products and programs to the needs of individual customers, i.e. Dell

SEGMENT MARKETING FLEXIBLE MARKET OFFERINGNAKED SOLUTION- value for all segment

membersDISCRETIONARY OPTIONS – some members

value; each option for additional chargeEXAMPLE- different models of car in the

same segment/ airlines (business v/s economy PREFERENCE SEGMENTS –

Homogenous preferenceDiffused preference Clustered preference

NICHE MARKETINGA more narrowly defined customer group

seeking a distinctive mix of benefitsSegments divided into subsegments

Distinctive set of needsPay a premium to firm satisfying these needsNiche segment is not likely to attract other

competitorsNicher gains economies through specialisationNiche has size, profit, growth potential

“Guerilla against Gorilla”IBM/ ezee/ Crack/ Genentech (cancer drugs)/

Spirulina/ German tech firms

Step 1. Market SegmentationGeographic Segmentation

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Density or Climate

City or Metro Size

World Region or Country

Step 1. Market SegmentationDemographic Segmentation

Dividing the market into groups based on variables such as:AgeGenderFamily size or life cycleIncomeOccupationEducationReligionRaceGenerationNationality

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Step 1. Market SegmentationPsychographic Segmentation

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Divides Buyers Into Different Groups Based on:

Step 1. Market SegmentationBehavioral Segmentation

Dividing the market into groups based on variables such as:OccasionsBenefitsUser statusUsage rateLoyalty statusReadiness stageAttitude toward product

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Segmenting Business Markets

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DemographicsDemographics

Operating VariablesOperating Variables

Purchasing ApproachesPurchasing Approaches

Situational FactorsSituational Factors

Personal CharacteristicsPersonal Characteristics

Business Marketers Use Many of the Same Consumer Variables, Plus:

Segmenting International Markets

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Factors Used to Segment International Markets

Geographic Location

EconomicFactors

Political and Legal Factors

Cultural Factors

Step 1. Market SegmentationRequirements for Effective Segmentation

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• Size, purchasing power, profiles of segments can be measured.

• Segments can be effectively reached and served.

• Segments are large or profitable enough to serve.

Measurable Measurable

AccessibleAccessible

SubstantialSubstantial

DifferentialDifferential

ActionableActionable

• Segments must respond differently to different marketing mix elements & programs.

• Effective programs can be designed to attract and serve the segments.

Step 2. Market TargetingEvaluating Market SegmentsSegment Size and Growth

Analyze current sales, growth rates and expected profitability for various segments.

Segment Structural AttractivenessConsider effects of: competitors, availability of

substitute products and, the power of buyers & suppliers.

Company Objectives and ResourcesCompany skills & resources needed to succeed in

that segment(s).Look for Competitive Advantages.

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Step 2. Market TargetingMarket Coverage Strategies

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Segment 1Segment 1

Segment 2Segment 2

Segment 3Segment 3

Segment 1Segment 1

Segment 2Segment 2

Segment 3Segment 3

CompanyMarketingMix

CompanyMarketingMix

CompanyMarketingMix

CompanyMarketingMix

CompanyMarketing Mix 1

CompanyMarketing Mix 1CompanyMarketing Mix 2

CompanyMarketing Mix 2CompanyMarketing Mix 3

CompanyMarketing Mix 3

MarketMarket

A. Undifferentiated Marketing

B. Differentiated Marketing

C. Concentrated Marketing

Step 2. Market TargetingChoosing a Market-Coverage Strategy

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Company ResourcesCompany Resources

Product VariabilityProduct Variability

Product’s Stage in the Life CycleProduct’s Stage in the Life Cycle

Market VariabilityMarket Variability

Competitor’s Marketing StrategiesCompetitor’s Marketing Strategies

Socially Responsible Target MarketingSmart targeting helps companies and

consumers alike.Target marketing sometimes generates

controversy and concern.Disadvantaged and vulnerable can be targeted.Cigarette, beer, and fast-food marketers have

received criticism in the past. Internet has come under attack because of the

loose boundaries and lack of control in marketing practices.

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Discussion ConnectionAt the last Discussion Connection, you

segmented the U.S. footwear market. Now, pick two companies that serve this market

and describe their segmentation and targeting strategies.

Can you come up with one that targets many different segments versus another that focuses on only one or a few segments?

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How does each company you choose differentiate its marketing offer and image?

How has each done a good job of establishing this differentiation in the minds of targeted consumers?

Step 3. Choosing a Positioning StrategyProduct’s Position - the way the product is

defined by consumers on important attributes - the place the product occupies in consumers’ minds relative to competing products.

Marketers must:Plan positions to give their products the greatest

advantage in selected target markets,Design marketing mixes to create these planned

positions.

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Step 3. Choosing a Positioning Strategy

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Step 1. Identifying Possible Competitive Advantages

Step 2. Selecting the Right Competitive Advantage

Step 3. Communicating and Delivering the Chosen Position

Identifying Possible Competitive AdvantagesKey to winning and keeping customers is to

understand their needs and buying processes better than competitors do and deliver more value.

Competitive advantage is an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits, that justify competitive advantage,

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Identifying Possible Competitive Advantages

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ServicesDifferentiationi.e. Delivery, Installation, Repair Services, Customer Training Services

Product Differentiationi.e. Features, Performance, Style & Design, or Attributes

ImageDifferentiationi.e. Symbols, Atmospheres, Events

Personnel Differentiationi.e. Hiring, Training Better People Than Competitors Do

Choosing the Right CompetitiveAdvantages

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CriteriaFor DeterminingWhich DifferencesTo Promote

AffordableAffordable SuperiorSuperior

ProfitableProfitable

PreemptivePreemptive

DistinctiveDistinctive

ImportantImportant

CommunicableCommunicable

Selecting an Overall Positioning Strategy (Fig. 7.4)

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MoreforMore

Morefor thesame

More forLess

The samefor less

Less formuchless

Price

More The same Less

More

The Same

Less

Ben

efit

s

Communicating and Delivering the Chosen PositionOnce position is chosen, company must take

strong steps to deliver and communicate the desired position to target consumers.

All the company’s marketing mix must support the positioning strategy.

Positioning strategy must be monitored and adapted over time to match changes in consumer needs and competitor’s strategies.

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Review of Concept ConnectionsDefine the three steps of target marketing:

market segmentation, market targeting, and market positioning.

List and discuss the major levels of market segmentation and bases for segmenting consumer and business markets.

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Explain how companies identify attractive market segments and choose a market-coverage strategy.

Discuss how companies can position their products for maximum competitive advantage in the marketplace.

Thank You