Market Segmentation: Definitions:1)Breaking the whole market into smaller groups, each of which is targeted separately.2)Grouping people according to their similarity related to a particular product category” 3)Market segmentation is the study of the marketplace in order to discover already existing viable groups of consumers who are similar or homogeneous in their approaches to choosing and/or consuming goods and services.It is a process of identifying niche markets.4)Process of dividing the total market for a good or service into several smaller, internally homogeneous groups.

Members of each group are similar with respect to the factors that influence demand.Characteristics1)age2)gender3)geographic location4)income5)spending patterns6)cultural background7)demographics8)marital status9)education10)language11)mobility

Levels of Market Segmentation We have four levels of segments1. Segments2. Niches3. Local areas4. Individuals.

Segment Marketing A market segment consists of a large identifiable group within a market, with similar wants, purchasing power, geographical location, buying attitudes, or buying habits. For example, an automaker may identify four broad segments in the car market: buyers who are primarily seeking (1) basic transportation, (2) high performance, (3) luxury, or (4) safety.

Because the needs, preferences, and behavior of segment members are similar but not identical For example, Delta Airlines offers all economy passengers a seat, food, and soft drinks, but it charges extra for alcoholic beverages and earphones.

Segment marketing allows a firm to create a more fine-tuned product or service offering and price it appropriately for the target audience. The choice of distribution channels and communications channels becomes much easier, and the firm may find it faces fewer competitors in certain segments.

Niche Marketing A niche is a more narrowly defined group, (typically a small market whose needs are not being well served). Marketers usually identify niches by dividing a segment into subsegments or by defining a group seeking a distinctive mix of benefits. For example, a tobacco company might identify two subsegments of heavy smokers: those who are trying to stop smoking, and those who don’t care.

Local Marketing Target marketing is leading to some marketing programs that are tailored to the needs and wants of local customer groups (trading areas, neighborhoods, even individual stores). Citibank, for instance, adjusts its banking services in each branch depending on neighborhood demographics; Kraft helps supermarket chains identify the cheese assortment and shelf positioning that will optimize cheese sales in low-, middle-, and high-income stores and in different ethnic neighborhoods.

Individual Marketing The ultimate level of segmentation leads to “segments of one,” “customized marketing,” or “one-to-one marketing.”For centuries, consumers were served as individuals: The tailor made the suit and the cobbler designed shoes for the individual. Much businessto-business marketing today is customized, in that a manufacturer will customize the offer, logistics, communications, and financial terms for each major account.

Patterns of Market SegmentationMarket segments can be built up in many ways. One common method 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:

A.Homogeneous preferences: Market in which all of the consumers have roughly the same preference, so there are no natural segments. We predict that existing brands would be similar and cluster around the middle of the scale in both sweetness and creaminess. . B.Diffused preferences: At the other extreme, consumer preferences may be scattered throughout the space indicating great variance in consumer preferences. One brand might position in the center to appeal to the most people; if several brands are in the market, they are likely to position throughout the space and show real differences to reflect consumer-preference differences. . C.Clustered preferences: The market might reveal distinct preference clusters, called natural market segments . The first firm in this market might position in the center to appeal to all groups, choose the largest market segment (concentrated marketing), or develop several brands for different segments. If the first firm has only one brand, competitors would enter and introduce brands in the other segments. Market-Segmentation Procedure

Marketers use a three-step procedure for identifying market segments:

1.Survey stage. The researcher conducts exploratory interviews and focus groups to gain insight into customer motivations, attitudes, and behavior. Then the researcher prepares a questionnaire and collects data on attributes and their importance ratings, brand awareness and brand ratings, product-usage patterns, attitudes toward the product category, and respondents’ demographics, geographics, psychographics, and mediagraphics. 2. Analysis stage. The researcher applies factor analysis to the data to remove highly correlated variables, then applies cluster analysis to create a specified number of maximally different segments. 3. Profiling stage. Each cluster is profiled in terms of its distinguishing attitudes, behavior, demographics, psychographics, and media patterns, then each segment is given a name based on its dominant characteristic. In a study of the leisure market, Andreasen and Belk found six segments:10 passive homebody, active sports enthusiast, inner-directed self-sufficient, culture patron, active homebody, and socially active. They found that performing arts

organizations could sell the most tickets by targeting culture patrons as well as socially active people. EX: Companies can uncover new segments by researching the hierarchy of attributes that customers consider when choosing a brand. For instance, car buyers who first decide on price are price dominant; those who first decide on car type (e.g., passenger, sport-utility) are type dominant; those who first decide on brand are brand dominant. With these segments, customers may have distinct demographics, psychographics, and mediagraphics to be analyzed and addressed through marketing programs.

SEGMENTING CONSUMER AND BUSINESS MARKETS Because of the inherent differences between consumer and business markets, marketers cannot use exactly the same variables to segment both. Instead, they use one broad group of variables as the basis for consumer segmentation and another broad group for business segmentation.customer profile:The Biggest Challenge for a Firm – UnderstandCustomer preferences• Ask customers what they want• Interpret the answers• Figure out what to do to satisfy theseWants

Drivers of buyers behaviour B• Exogenous Factors?• Endogenous Factors?Drivers of Buyer • Endogenous - Who the Consumer is:– Family Influence– Culture– Values

• Endogenous - The Situation a Consumer findsones self in:– Needs– BenefitsBuyer ModelSimplified buyer behaviour model:Who X When = Choice + Satisfaction

4 commonly used bases for customer Segmentation1)Descriptivegeographic location demographic

2)Behavioural psychographicbenefits

Bases for Segmenting Consumer Markets In segmenting consumer markets, marketers can apply geographic, demographic, psychographic and behavioural variables related to consumer characteristics as well as behavioral variables related to consumer responses (see Table 3.5). Once the segments are formed, the marketer sees whether different characteristics are associated with each consumer-response segment.

A: Geographic Segmentation (region, climate, population density)Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions, counties, cities, or neighborhoods. The company can operate in one or a few geographic areas or operate in all but pay attention to local variations. Some marketers even segment down to a specific zip code. Consider a big retail house having large no of retail outlets divide on the Geographic segmentation basis and keep their stock as per different regions according to their regional preferences and believes.

EX: A automobile company having good business in India, wile serving in India it only has to take care of the local norms of different conditions, when it goes international means serving to another market segment Geographically apart from the other then the co. has to take care of …

B: Demographic Segmentation (age, sex, education, occupation, religion, race, nationality, family size, family lifestyle)In demographic segmentation, the market is divided into groups on the basis of age and the other variables. One reason this is the most popular consumer segmentation method is that consumer wants, preferences, and usage rates are often associated with demographic variables. Another reason is that demographic variables are easier to measure. Even when the target market is described in nondemographic terms (say, a personality type), the link back to demographic characteristics is needed in order to estimate the size of the target market and the media that should be used to reach it efficiently.

Here is how certain demographic variables have been used to segment consumer markets:

Age and life-cycle stage. Consumer wants and abilities change with age, as Horlicks introduced many health drinks for different age group starting from 3 yrs to old age ones. Gender. Gender segmentation has long been applied in clothing, hairstyling, cosmetics, and magazines..Income Generation. Social class. Social class strongly influences preference in cars, clothing, home ,design products for specific social classes. However, the tastes of social classes can change over time. furnishings, leisure activities, reading habits, and retailers, which is why many firms

Psychographic Segmentation Lifestyle. People exhibit many more lifestyles than are suggested by the seven social classes, and the goods they consume express their lifestyles. Meat seems an unlikely product for lifestyle segmentation,

C: Behavioral Segmentation (attitude, knowledge, benefits, user status, usage rate, loyalty status, readiness to buy, occasions)

In behavioral segmentation, buyers are divided into groups on the basis of their knowledge of, attitude toward, use of, or response to a product. Many marketers believe that behavioral variables—occasions, benefits, user status, usage rate, loyalty status, buyer-readiness stage, and attitude—are the best starting points for constructing market segments.

Occasions. Buyers can be distinguished according to the occasions on which they develop a need, purchase a product, or use a product. For example, air travel is triggered by occasions related to business, vacation, or family, so an airline can specialize in one of these occasions. . Benefits. Buyers can be classified according to the benefits they seek. One study of travelers uncovered three benefit segments: those who travel to be with family, those who travel for adventure or education, and those who enjoy the “gambling” and “fun” aspects of travel.21 . User status. Markets can be segmented into nonusers, ex-users, potential users, first- Usage rate. Markets can be segmented into light, medium, and heavy

Attitude. Five attitude groups can be found in a market: (1) enthusiastic, (2) positive, (3) indifferent, (4) negative, and (5) hostile. So, for example, workers in a political

D.Psychographic Segmentation: Here buyers are divided into different groups on the basis of lifestyle or personality or value. The term Psychographics describes a wide variety of psychological and behavioural patterns of an individual / market. Values are a reflection of our needs adjusted for the realities of the world in which we live. There are nine basic values (according to a research at the University of Michigan):

Self RespectSelf FulfillmentSecuritySense of belongingExcitementSense of AccomplishmentFun & Enjoyment in LifeBeing well respectedHaving warm relationships.

Multi-Attribute Segmentation (Geo clustering) Marketers are increasingly combining several variables in an effort to identify smaller, better defined target groups. Thus, a bank may not only identify a group of wealthy retired adults, but within that group may distinguish several segments depending on current income, assets, savings, and risk preferences.

Bases for Segmenting Business Markets

Business markets can be segmented with some variables that are employed in consumer market segmentation, such as geography, benefits sought, and usage rate. Yet business marketers can also use several other variables. Bonoma and Shapiro proposed segmenting the business market with the variables shown in Table 3.6. The demographic variables are the most important, followed by the operating variables down to the personal characteristics of the buyer.

Major Segmentation Variables for Business Markets Demographic

1. Industry: Which industries should we serve? 2. Company size: What size companies should we serve? 3. Location: What geographical areas should we serve?

Segmentation for Industrial Markets

Geographic Segmentationuseful for the automotive industry

Product Segmentationie. Special parts and components

Segmentation by End-Use Applicationie. Paint mfg. Paint for waterproof applications, paint for rust

prevention, paint which sticks to glass

Effective Segmentation Even after applying segmentation variables to a consumer or business market, marketers must realize that not all segmentations are useful. For example, table salt buyers could be divided into blond and brunette customers, but hair color is not relevant to the purchase of salt. Furthermore, if all salt buyers buy the same amount of salt each month, believe all salt is the same, and would pay only one price for salt, this market would be minimally segmentable from a marketing perspective.

To be useful, market segments must be: Measurable: The size, purchasing power, and characteristics of the segments can be measured. Substantial: The segments are large and profitable enough to serve. A segment should be the largest possible homogeneous group worth going after with a tailored marketing program. Accessible: The segments can be effectively reached and served.

Differentiable: The segments are conceptually distinguishable and respond differently to different marketing mixes. If two segments respond identically to a particular offer, they do not constitute separate segments.

To sum up Segmentation:----

Process of Market SegmentationIdentify wants within a market => Identify characteristics => Determine size and satisfaction Market Segmentation ConditionsMeasurable and Obtainable DataSegment is AccessibleLarge enough to be ProfitableMICROMARKETING Treat each single customer as a separate segmentMarket Segmentation - First CutCustomer’s reason for buyingCONSUMER: Purchase for personal useBUSINESS: Purchase to use in organizations, to resell, or to make other products

Segmentation of Detergent market in India

1.PremiumAriel- Ultramatic & Spring clean Surf -Automatic & Quick wash,2.Mid – pricedSurf Excel Blue, Tide, Stain Champion3.Mass MarketWheel , Fena, Nirma,Ghadi etc. Segment bounding is a means by which marketers differentiate among consumers and among market segmentsDetermine the “descriptors” of the consumers/units in the segment (e.g., demographics, psychographics, benefits sought, product usage rate, type of retail outlet, etc.)Determine specific “geographic location” of segment Bound segments in “time” to ensure that all data is relevant and up to date for the time of use. Segment ViabilityFour factors are used to assess segment viability. Viable segments are:Of sufficient size

MeasurableDifferentiatedReachable

Segmentation StrategiesMass marketing (undifferentiated marketing): offering the same product to the entire consumer populationConcentrated marketing (focused or niche marketing): selecting one market segment, even though the product may also appeal to othersDifferentiated marketing: selecting two or more different segments

Segmentation in the Global MarketplaceThere are two approaches to market segmentationLocalization: treating each country as a separate market and seeking consumer segments accordinglyIntermarket segmentation (also called “standardization”): selecting groups of consumers who exhibit similar consumption behavior across different countriesMarketers emphasize similarities rather than differences across country markets Consumer Benefits and Product PositioningProduct positioning is the placement of a product, service, outlet, etc. in the mind of the consumerThere are five ways used to position products, services, outlets, etc.On perceived benefitsOn imageOn attributesAgainst competitorsCombination of two or more of the aboveRepositioning: shifting position in the consumer’s mind through changes in important product, price, distribution, and promotional and/or personal selling benefits.

GOOD SEGMENTATION APPROACHES– Clearly identify targets– Discriminates on behavior– Are logical, makes senseProvide insights for marketing initiatives

– Provide reachable targets – media deliveryAre stable

APPROACH TO ATTITUDE BASE MARKET STRUCTURE• Consumer/Customer Segmentation – Identifygroupings of consumers with similar attitudes out of adiverse population.• Need States – Identify product usage situations withsimilar set of consumer needs.• Affinity Segmentation – Identify groups ofconsumers with similar degrees of commitment to abrand.

Consumer/Customer Segmentation MethodologyTypical approach:• Collected by a “survey.”– Questionnaire constructed to covercomprehensive set of attitude statements– Also collects other measures to relate to theattitudes.

MARKET TARGETING STRATEGIES

Once the firm has identified its market-segment opportunities, it is ready to initiate market targeting. Here, marketers evaluate each segment to determine how many and which ones to target and enter.

Evaluating Market Segments

In evaluating different market segments, the firm must look at two factors:the segment’s overall attractiveness, the company’s objectives and resources. First, the firm must ask whether a potential segment has the characteristics that make it generally attractive, such as size, growth, profitability, scale economies, and low risk.

Second, the firm must consider whether investing in the segment makes sense given the firm’s objectives and resources. Some attractive segments could be dismissed because they do not mesh with the company’s long-run objectives; some should be dismissed if the company lacks one or more of the competences needed to offer superior value.

Selecting and Entering Market Segments Having evaluated different segments, the company can consider five patterns of target market selection.

Single-Segment Concentration Many companies concentrate on a single segment: Mercedeze , for example, concentrates on the high end car market, while Porsche concentrates on the sports car market. Through concentrated marketing, the firm gains a thorough understanding of the segment’s needs and achieves a strong market presence. Furthermore, the firm enjoys operating economies by specializing its production, distribution, and promotion; if it attains segment leadership, it can earn a high return on its investment.

However, concentrated marketing involves higher than normal risks if the segment turns sour because of changes in buying patterns or new competition. For these reasons, many companies prefer to operate in more than one segment.

Selective Specialization Here the firm selects a number of segments, each objectively attractive and appropriate. There may be little or no synergy among the segments, but each segment promises to be a moneymaker. This multisegment coverage strategy has the advantage of diversifying the firm’s risk.

Consider a radio broadcaster that wants to appeal to both younger and older listeners using selective specialization. Emmis Communications owns New York’s WRKSRM, which describes itself as “smooth R&B [rhythm and blues] and classic soul” and appeals to older listeners, as well as WQHT-FM, which plays hip-hop (urban street music) for under-25 listeners.

Product Specialization Another approach is to specialize in making a certain product for several segments. An example would be a microscope manufacturer that sells microscopes to university laboratories, government laboratories, and commercial laboratories. The firm makes different microscopes for different customer groups but does not manufacture other instruments that laboratories might use. Through a product specialization strategy, the firm builds a strong reputation in the specific product area. The downside risk is that the product may be supplanted by an entirely new technology.

Market Specialization With market specialization, the firm concentrates on serving many needs of a particular customer group. An example would be a firm that sells an assortment of products only to university laboratories, including microscopes, oscilloscopes, and chemical flasks. The firm gains a strong reputation in serving this customer group and becomes a channel for further products that the customer group could use. However, the downside risk is that the customer group may have its budgets cut.

Full Market Coverage Here a firm attempts to serve all customer groups with all of the products they might need. Only very large firms can undertake a full market coverage strategy. Examples include IBM (computer market), General Motors (vehicle market), and Coca-Cola (drink market). Large firms can cover a whole market in two broad ways: through undifferentiated marketing or differentiated marketing.

In undifferentiated marketing, the firm ignores market-segment differences and goes after the whole market with one market offer. Focusing on a basic buyer need, it designs a product and a marketing program that will appeal to the broadest number of buyers.

In differentiated marketing, the firm operates in several market segments and designs different programs for each segment. MARUTI SUZUKI does this with its various vehicle brands and models; Intel does this with chips and programs for consumer, business, small business, networking, digital imaging, and video markets.

MARKET TARGETINGOnce the organisation has identified the opportunities existing in different market segments, it has to decide and select on how many and on which a particular segment(s) to focus on, and offer their market offering.

Target market is a business term meaning the market segment to which a particular good or service is marketed. It is mainlydefined by age, gender, geography, socio-economic grouping, or any other combination of demographics. It is generally studied and mapped by an organization through lists and reports containing demographic information that may have an effect on the marketing of key products or services.

Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments.

Target marketing can be the key to a small business’s success. The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing provides a focus to all of your marketing activities.

Market targeting simply means choosing one’s target market. It needs to be clarified at the onset that marketing targeting is not synonymous with market segmentation. Segmentation is actually the prelude to target market selection. One has to carry out several tasks beside segmentation before choosing the target market. Through segmentation, a firm divides the market into many segments. But all these segments need not form its target market. Target market signifies only those segments that it wants to adopt as its market. A selection is thus involved in it. In choosing target market, a firm basically carries out an evaluation of the various segments and selects those segments that are most appropriate to it. As we know that the segments must be relevant, accessible, sizable and profitable. The evaluation of the different segments has to be actually based on these criteria and only on the basis of such an evaluation should the target segments be selected.

PROCESS OF CHOOSING THE TARGET MARKET

The process of choosing the target Market are:-Choosing the target market is related to, but not synonymous with, market segmentation.Segmentation is the means of the tool; choosing the target market is the purpose.Segmentation can also be viewed as the prelude to target market selection.Choosing the target market usually follows multi-level segmentation using different bases.Choosing the target market involves several other tasks in addition to segmentation.Looking at each segment as a distinct marketing opportunity.Evaluating the worth of each segment (sales/profit potential).Evaluating whether the segment is :Distinguishable.Measurable.Sizable.Accessible.Growing.Profitable.

Compatible with the firm’s resources.Examining whether it is better to choose the whole market, or the only a few segment, and deciding which ones should be chosen.Looking for segments, which are relatively less satisfied by the current offer in the market from competing brands.Checking out if the firm has the differential advantages / distinctive capability for serving the selected segments.Evaluating the firm’s resources and checking whether it is possible to put in the marketing programmes required for capturing the spotted segments with those resources.Final selecting those segments that are most appropriate for the firm.

TARGET MARKET STRATEGIESThere are several different target-market strategies that may be followed. Targeting strategies usually can be categorized as one of the following:

· Single-segment strategy - Also known as a concentrated strategy. One market segment (not the entire market) is served with one marketing mix. A single-segment approach often is the strategy of choice for smaller companies with limited resources.

· Selective specialization- This is a multiple-segment strategy, also known as a differentiated strategy. Different marketing mixes are offered to different segments. The product itself may or may not be different – in many cases only the promotional message or distribution channels vary. · Product specialization- The firm specializes in a particular product and tailors it to different market segments. · Market specialization- The firm specializes in serving a particular market segment and offers that segment an array of different products.· Full market coverage - The firm attempts to serve the entire market. This coverage can be achieved by means of either a mass market strategy in which a single undifferentiated marketing mix is offered to the entire market, or by a differentiated strategy in which a separate marketing mix is offered to each segment· DECISIONS INVOLVED IN TARGETING STRATEGY INCLUDE:- which segments to targeting. how many products to offer. which products to offer in which segments.

POSITIONINGINTRODUCTION: -

Positioning is what you do to mind of the prospect. They iterate that any brand is valued by the perception it carries in the prospect or customer's mind. Each brand has thus to be 'Positioned' in a particular class or segment. Example: Mercedes is positioned for luxury segment, Volvo is positioned for safety. Although there are different definitions of Positioning, probably the most common is: "A product's position is how potential buyers see the product", and is expressed relative to the position of competitors. Positioning is a platform for the brand. It facilitates the brand to get through to the mind of the target consumer. The position of the brand has thus to be carefully maintained and managed. Example. It is based on the concept that communication can only take place at the right time and under the right circumstances."• Fundamental Elements:– Target– Benefit– Frame of Reference– Support

POSITIONING CONCEPTS:- Generally, there are three types of positioning concepts: · Functional positions-Solve problems.- Provide benefits to customers.- Get favorable perception by investors (stock profile) and lenders.· Symbolic positions-Self-image enhancement.- Ego identification.- Belongingness and social meaningfulness.- Affective fulfillment.· Experiential positions- Provide sensory stimulation.- Provide cognitive stimulation.· APPROACHES OF POSITIONING :-The main positioning strategy is to either developing or reinforcing a particular image for the brand in the mind of the customer. The main approaches to positioning strategy are:-· Customer benefits approach.· The price-quality approach.· The use or application approach.· The product user approach.· The product class approach.· The cultural symbol approach.· The competitor approach.1. CUSTOMER BENEFIT APPROACH: -

This is an important positioning strategy. It involves putting the brand above competitors, based on specific brand attributes and customer benefit. In the automobiles sector we can see many car manufacturer give emphasis on different technical aspects such as fuel efficiency, safety, engine performance, power windows etc. Generally marketers identify positioning in respect of product characteristics that have been ignored by the competitor. Often we can see that firms attempts to position their brands along with two or more characteristic simultaneously, this is done to give anextra edge to the product from its rival and also helps increase the product’s life cycle. Thus a single product can solve many problem is the main theme behind the product. Example: Procter &Gamble’s Head & shoulder shampoo functions as anti dandruff and anti hairfall shampoo. Head & Shoulder positioned as both anti-dandruff & anti-hairfall shampoo .2. PRICE QUALITY APPROACH: -Sometimes brands attempts to offer more in term of service, feature, quality, or performance. Manufacturer of such brands charge higher prices partly to cover the cost and partly to communicate the fact that they are of high quality. In fact in the same product category there are brands, through comparable in qualities, which appeal on the basis of price. For example brands like Rado and Timex use quality and price positioning technique respectively. Rado competes for quality and Timex competes for price. It is difficult to use both quality and price positioning together because there is a risk that high quality-low price positioning technique may infer the image of the product in the mind of the consumer. 3. THE USE AND APPLICATION APPROACH: - In this strategy the product is positioned with a use or application approach. For example: - Largest Mobile manufacturer in the world Nokia positioned its few variant of N-series mobiles as music phones with enhanced memory and multimedia capabilities. Nokia N-70 Music edition Nokia N-73 Music editionWith 1GB memory with 1GB memory 4. THE PRODUCT USER APPROACH:- In this approach, the brand identifies and determines the target segement for which the product will be positioned. Many brand uses a model or a celebrity to position their product. The expectation are that a model or a celebrity is likely to influence the product’s image by reflecting their own image to it. For example:- Dabur Chyvanprash is positioned for all age groups.5. THE PRODUCT CLASS APPROACH:- This approach is use so that the brand is associated with a particular product category. This is generally used when a category is too crowded. For example:- HLL has

positioned Dove toilet soap as a cleansing cream product for young womwn with dry skin and its is positioned as a premium segment toilet soap.6. THE CULTURAL SYMBOL APPROACH:- The positioning strategy is based on deeply entrenched cultural symbol. The use of cultural symbol can help to differentiate the brand from competitors brands. For example:- The positioning technique of Marlboro cigarettes use the image of typical American cowboy . Marlboro gives its cigarette brand a American cowboy imageExample of cultural symbol approach 7. THE COMPETITOR APPROACH:- Many brands use competitor as a dominant plank in their campaign. These brands are positioned following its competitor. This is an offensive strategy.· DIFFERENT POSITIONING PLANKS / BASES:- Different types of positioning planks /bases are used by the marketers are:- 1. Economy:- Product positioned toward a particular segment keeping in mind it economy.Example-Maruti 800, Tata Nano, Nirma detergent powder etc are positioned for the economy segment2. Benefit:- Product positioned with some beneficial features. Example- Colgate total, Clinic plus etc.3. Gender:- Product positioned for a particular segment. Example- Scooty Pep, Titan Raga.4. Luxury and exclusiveness:- Product or services positioned toward luxury segment. Example-Taj group of hotel, Mercedes Benz E-class etc. Mercedes Car - symbol of luxury and exclusiveness5. Fashion for elite class:- Product positioned for fashionable elite class or member of the society, who always want to stay ahead in term of fashion and demands exclusive products only. Example Peter England, Van Heusen, Raymond etc.6. Technology and value added features:- Positioning of a product according to its technological advancement and value added features. Example:- Microsoft’s positioning of its recent operating system Windows Vista as the advanced operating system, Sony with various elecronic goods, LG etcPreview of Microsoft’s window Vista operating system· POSITIONING PLANNINGPositions are described by variables and within parameters that are important to the customers. Common examples are price, supporting services, quality, reliability, and value for money. Often, customers position a product in relation to a brand or product that is especially visible to them. This could be the market leader or any other offer with a high media exposure and an above average

marketing budget. Therefore, it is advisable to use in-depth market research to determine relevant parameters in order to understand how customers rate different products and marketing variables.The number of relevant parameters is normally low. Most often, they can be described with a two- or three-dimensional matrix. This tool to visually depict customers’ perceptions of a product and its position is called perceptual mapping.

Segmentation Survey

• Need to define scope– Who is the universe of relevant consumers?• Current users• Potential users/prospects– What is the subject?• Products, categories, usage occasions• Best to cover ways to expand business• Can be administered a number of ways – all have relative tradeoffs– Mail– In-Person– Telephone– Internet• Must be project-able to the marketplace– Balanced samples– Weighted data (if necessary)• Questionnaire must be– Comprehensive of the subject matter – cover all topics that are relevant to therespondent.– Questions are communicated clearly and uniformlySegmentation Analytics• Cluster Analysis – means of identifying and groupingrespondents by their answers. (Exercise)• Several statistical approaches:– K-Means cluster analysis is most typical– Multiple-regression– Latent class– Canonical factor analysis• Best done by Marketing Research firm with experience insegmentation.• Really a combination of art and science.

Market Segmentation:Case study:Following the identification of the gaps in the market, Musgravedecided to segment the market of the independent retailer into twogroups:◗ The "Trolley Shopper" who bought most of their groceries inone weekly shopping trip to the supermarket.◗ The "Basket Shopper" who made smaller purchases on amore regular basis.In 1979, Musgrave created twonew brands, SuperValu andCentra to meet the needs ofboth segments. SuperValu wasaimed at the "trolley shopper"while Centra was expected tocater for the "basket shopper". Both were offered as franchiseopportunities to independent retailers. The franchise Musgraveoffered was quite unique – it was purely voluntary and theindependent retailers did not have to pay a franchise fee, or relinquishownership. Instead, they would be provided with an extensive rangeof services aimed at improving their performance. In return,Musgrave would benefit from the increased sales of these retailers.

Benefit segmentation• “Unconcerned” (25%)– Basically buy on price• “Ingredient Apathic” (17%)– Concerned with reducing signs of aging; but not so concerned aboutgentleness or specific ingredients• “Price conscious socializers” (17%)– Worried about looking better but price/value is a concern• “stressed out” (22%)– Not concerned about price; want effective product that reinvigoratesskin and reduces signs of aging• “Age focused” (18%)– Similar to “stressed out” group but with more attention to price andnatural ingredients.Last two groups: 62% of Alpha-hydrox users, 54% of Plenitude, and36% of Olay users

It is based on the Attributes (characteristics) of products, as seen by the customers”

example, people buy something because it causes a benefitie. Diet coke - less sugar, lose weightie. Extra white toothpaste, whiter teeth, better smile “Many marketers now consider benefit segmentation one of the most useful methods of classifying markets”ie. Watches- the benefits customers looked for where durability and product quality- older research was based on dividing the watch market according to a different segment - once they used the new segment, they changed the marketing plan- modern example would be price of PCs for home use - biggest use is entertainment NOT schoolwork or home based businesses