Transcript Identifying Market Segments

By Agung Utama
A
company cannot serve all customers in a
broad market
 The customers are too numerous and diverse
in their buying requirements
 A company need to identify the market
segments it can serve effectively
 Mass
marketing
The starting point for
discussing segmentation is
mass marketing
 Mass production, mass
distribution and mass
promotions of one product for
all buyers
 Pro : creates the largest
potential market, which leads
to lowest cost, lower price or
higher margins.
 Contra : The proliferations of
advertising media and


Micro marketing
1)
Segment marketing
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Segment market : consists of a group of
customers who share a similar set of wants.
Segment differ from sector
The marketer’s task : Identify the segment and
decide which one (s) to target.
The benefits :
 Can create a more fine tuned product or
service
 Can price it appropriately fot the target
segment
 Can more easily select the best
distribution and communication channels
 Have a clear picture of its competitors
2.
Niche marketing
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A more narrowly defined group seeking a distinctive
mix of benefits.
Identified by dividing segments into sub segments
Example : heavy smokers includes two niches : trying
to stop and who do not care.
Characterization of attractive niche
1) Have a distinctive of needs
2) Pay a premium
3) Has size, profit and growth potential
4) Gains certain economies through specialization.
3.
Local Marketing
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Target marketing is leading
to marketing programs
tailored to the needs and
wants of local customer
groups.
Citibank provide different
mixes of banking services in
its branches, depending on
neighborhood or
demographics.
Pro: see national advertising
as wasteful because it fails to
local needs
Contra : It drives up
manufacturing and marketing
cost by reducing economics
of scale.
4.
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Individual customer marketing
Ultimately every individual has a unique set of wants
and needs.
I the past centuries, producers customized their
offering to each customer .
The tailor fitted a suit and a cobbler made shoes for
each individual.
Mass customization : ability of a company to prepare
a mass basis individually designed products, services,
program, and communications to meet each
customers requirements.
1.
Homogenous preferences
•
•
2.
A market where all
consumers have roughly the
same preferences.
The market shows no natural
segments. The existing
brands would be similar and
cluster around the middle of
the market
Diffused preferences
•
•
A market where consumer
preferences may be
scattered throughout the
space, indicating that
customers vary greatly in
their preferences
The first brand to enter the
market is likely to position in
the centre to appeal to the
most people. A second
2.
Diffused preferences
•
•
A market where
consumer preferences
may be scattered
throughout the space,
indicating that
customers vary greatly
in their preferences
The first brand to enter
the market is likely to
position in the centre
to appeal to the most
people. A second
competitor could
locate next to the first
brand and fight for
market share or it
could locate in a corner
to attract a customer
group that was not
satisfied with the
centre brand
3.
Clustered preference
The market might reveal
distinct preferences clusters,
called natural market
segments. The first firm in this
market has three options. It
might position in the centre,
hoping to appeal to all groups.
It might position in the largest
market segment, or it might
develop several brands, each
positioned in a different
segment.
1.
2.
Needs Based Segmentation
group customers in to segments based
on similar needs and benefits sought by
customer.
Segment Identification
For each needs based segment,
determine which demographics,
lifestyles, and usage behaviors make
the segment distinct and identifiable.
3.
4.
5.
6.
7.
Segment Attractiveness
Determine the overall attractiveness of each
segment using criteria such as: market
growth, competitive intensity and market
access.
Segment Profitability
Segment Potitioning
for each segment, create a value proposition
and product price positioning strategy based
on that segment’s unique customer needs and
characteristics.
Segment Acid Test
Create a test attractiveness of each segment’s
positioning strategy
Marketing Mix strategy
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Measurable
The size, purchasing power and characterisric of
the segments can be measured.
Substantial
The segments are large and profitable enough.
Accesible
The segments can be effectively reached and
served.
Differentiable
conceptually distiguishable and respon diffrently
to different marketing mix elements and
programs.
Actionable
Effective programs can be formulated for
attracting and serving the segments
 Basis
for segmenting
consumer markets
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
geographic segmentation
Dividing the market into different
geographical unit such as nations,
state, regions, counties, cities, or
neighborhood
Demographic segmentation
The market is divided into groups
on the basis of variable such as :
age, famili size, famili life cycle,
gender, income, occupation,
education, religion, generation,
nationality, social class, etc.

Pcycographic Segmentation
Buyers divided into different groups on the basis of
lifestyle, or personality or values.

Behavioral Segmentation
Buyers are divided into groups on the basis of their
knowledge, attitude toward use of or response to a
product.
Other behahioral variables : ocasions, user status,
usage rate, loyalty status, buyer readiness, and
attitude.
 Once
the firm has identified its market
segment opportunities, it has to decide how
many and which ones to target.
 Market targeting related to select one or
more market segments to enter.
 Five patterns of target market selection:
1. Single-segment concentration
/concentrated marketing.
The firms make a single product that it sells to
a single segment. The company gains a strong
knowledge of the segment’s needs and strong
market pressence.
Example: Volks Wagen concentrates on the
small car market and Porsche on the sport car
 Single
segment concentration
M1
P1
P1
P1
M2
M3
2.
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Selective Specialization/Multi Segment
Strategy
The firm selects a number of segments,
each objectively attractive and
appropriate.
This strategy has the advantage of
diversifying the firm’s risk
There may be little or no synergy among
the segments, but each promises to be a
money maker
 Selective
M1
P1
P1
P1
Specialization
M2
M3
3.
Product Specialization
The firms make a certain product that it
sells to several segments.
The advantages of the strategy is a strong
reputation in the specific product area.
 Product
Specialization
M1
M2
P1
P1
P1
M3
4.

Market Specialization
The firm concentrates on serving many
needs of particular customer group.
The advantage of this strategy is gaining a
strong reputation in serving this customer
group and became a channel for additional
products the customer groups can use.
 Market
M1
P1
P1
P1
Specialization
M2
M3
5.
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Full Market Coverage
The firms attempts to serve all customer
groups with all the products they might
need. Only very large firms such IBM, Coca
Cola, General Motors, Toyota can undertake
a full market coverage strategy.
Large firm can cover a whole market in two
broad ways: undifferentiated marketing
and differentiated marketing.
In undifferentiated marketing, the firms
ignores segment differences and goes after
the whole market with one offer.
In differentiated marketing, the firms
operates in several market segments and
design different products for each segment.
 Full
Market Coverage
M1
P1
P1
P1
M2
M3