A Study on Positioning of Tata Ace Zip in Captive and Semi Captive Segment
4.segment target positioning
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Transcript of 4.segment target positioning
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Market Segmentation
Dividing a market into distinct groups of buyers on the basis of
NeedsCharacteristics or Behavior
who might require separate products or marketing mixes
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Reasons for Market Segmentation
Cannot appeal to all buyers Large scattered buyers Varying needs & buying practices Companies have differing abilities to
serve different segments…Therefore companies must identify parts of the
market that they can serve best & most profitably
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5 Important Segmentation Topics
1. Market segmentation levels 2. Segmenting Consumer markets 3. Segmenting Business markets4. Segmenting International markets..5. Effective Segmentation Requirements
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Levels of Marketing
Niche marketing MicromarketingMass marketing Segment marketing
Complete Segmentation
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Levels of Marketing
1.Mass MarketingAdvantages
One product company to start with - GM, Coke
Creates large potential Low cost… Low prices /high margins
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Levels of Marketing
Mass MarketingDifficulties Overtime they splinter into smaller
segments… Proliferation of distribution channels / ad
media leading to segmented marketing
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Levels of Marketing
2.Segment Marketing Isolating broad segments that make up
the market and adapting the marketing to match the needs of one or more segments
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Levels of Marketing Segment marketing
Advantages More focused - efficient Eg. Marriott
Business travelers Families Customized packages
Effective communication programs… Less intensity of competition- fewer focused
competitors
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Levels of Marketing
3.Niche Marketing Focusing on sub segments or niches
with distinctive traits that may seek a special combination of benefits
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Levels of Marketing
Niche marketingAdvantages
Serve Niches unimportant to big players…
Sometimes big companies like Nike serve niches as well
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Levels of Marketing
4.Micromarketing The practice of tailoring products and
marketing programs to suit the tastes of specific individuals and locations – includes local marketing & individual marketing
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Levels of Marketing 4.Micromarketing
Local marketingTailoring brands and promotions to the
needs and wants of local customer groups – cities neighborhoods or even stores.
Eg Citibank : different services in different branches depending on differing demographics
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Levels of Marketing4.MicromarketingLocal MarketingBenefits
Closer to customer Closer to retailers…
Problems Drives up manufacturing / marketing costs Brand’s overall image can get diluted
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Levels of Marketing4.MicromarketingIndividual Marketing Tailoring products and marketing programs to
the needs & preferences of individual customers.
This is also labeled as One to one marketing Customized marketing Eg. Dell computers
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Segmenting Consumer markets A marketer has to try different segmentation
variables , alone or in combination - to find the best way to view the market
Different market variables used for segmenting the consumer markets are:- Geographic Demographic Psychographic Behavioral Occasion Benefit
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Segmenting Consumer markets
Six different market variables1.Geographic segmentation Dividing a market into different
geographical units such as Nations States Regions… Cities etc
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Segmenting Consumer marketsSix Segmentation variables2.Demographic segmentation Dividing the market into groups based on demographic
variables such as Age & life cycle Gender Family size Family life cycle Income Occupation Education Religion Race Nationality
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Segmenting Consumer marketsSix Segmentation variables2.Demographic segmentationAge & l ife cycleExample McDonald’s targets children , teens, adults, &
seniors thru different ads & media Ads to teens feature dance – beat music,
adventure… Ads for seniors feature softer & sentimental.
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Segmenting Consumer markets2.Demographic segmentationGender segmentationExample Automobile industry :uses gender segmentation.
More than 50% of car buying decisions are taken by women in the US.
Women have less upper body strength, long finger nails and more safety concerns.
In all new Cadillac cars-they take care by providing Easy opening hoods & trunks, Seat belts that fit women easier and An increased emphasis on safety
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Segmenting Consumer markets
Six Segmentation variables2.Demographic segmentationIncome segmentation Dividing the market into different
income groupsExamples.. Automobiles, clothing, cosmetics,
financial services & travel etc.
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Segmenting Consumer marketsSix Segmentation variables3.Psychographic segmentation Dividing the market into different groups
based on Social class Lifestyle or Personality characteristics
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Segmenting Consumer marketsSix Segmentation variables4.Behavioral segmentation Dividing the market into different groups
based on Consumer knowledge, Eg. Vsnl broad band
packages –time based, & usage based Attitude, Eg. Atttude towards movie /entertainment
– differential pricing for different timings Use or response to a product-mobile phones
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Segmenting Consumer marketsSix Segmentation variables5.Occasion segmentation Dividing the market into different groups
according to occasions when buyers get the idea to buy-in trade fairs/exhibitions actually make the purchase or use the purchased item Example :seasonal products like refrigerators ,
ACs, or geysers
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Segmenting Consumer marketsSix Segmentation variables6.Benefit segmentation Dividing the market into different groups
according to the different benefits that consumers seek from the product
(a) Benefits sought Example :Travel
With family- relax Adventure / education Gambling / Fun
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Segmenting Consumer markets
Benefit segmentation (b) User status Non users Ex users Potential users First time users… Regular users
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Segmenting Consumer markets
Benefit segmentation (c) Usage rate Light Medium Heavy : small % of market but high % of total
consumption
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Segmenting Business markets
Five Major segmentation variables1.Demographics Industry: Which buyer industry to focus
on ? Co.size : What size of co. to focus on? Location: Which geographical area to
focus on?
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Segmenting Business marketsFive Major segmentation variables2.Operating variables Technology: What customer technologies to
focus on ? User-nonuser status : Should we focus on
high , medium, heavy or non users ? Customer capabilities
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Segmenting Business marketsFive Major segmentation variables3.Purchasing approaches Purchasing function organization : Focus on
companies with centralized or decentralized purchasing function ?
Power Structure :Focus on engineering, financing or marketing dominated cos. ?...
Purchase criteria :Focus on cos seeking quality, price or service ?
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Segmenting Business marketsFive Major segmentation variables4.Situational factors Urgency :Should we focus on cos which need
quick delivery or service? Specific application: Should we focus on a
few applications of our product rather than all ?...
Size of order :Should we focus on large or small orders ?
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Segmenting Business marketsFive Major segmentation variables5.Personal characteristics Buyer seller similarity :Should we focus on
cos whose people and values are similar to ours ?
Attitude towards risk :Should we focus on risk taking or risk avoiding customers ?...
Loyalty :Should we focus on cos. that show high loyalty to their suppliers ?
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Segmenting international markets
Five Segmentation variables 1.Geographic location: Grouping cos by
regions- US, Western Europe, Asia Pacific, Middle East, or Africa. Nations close to each other may have common traits
& behaviors.
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Segmenting international markets
Five Segmentation variables 2.Economic factors : Grouping developed
countries and developing countries separately
3.Political legal factors : Type & stability of governments, Receptivity to foreign firms, Monetary regulations, Amount of bureaucracy etc.
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Segmenting international markets
Five Segmentation variables 4.Cultural factors :
Common language, Religion , Values & attitudes , Customs and behavioral patterns.
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Segmenting international markets
Five Segmentation variables5.Intermarket segmentation Forming segments of consumers who
have similar needs and buying behavior even though they are located in different countries
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Requirements of Segmentation
To be useful market segmentation must be: Measurable Accessible Substantial Differentiable… Actionable
___________
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Market targetingEvaluating market segmentsLong term segment attractiveness can get impacted due
to the following factors :- Aggressive competitors Substitute products :
l imits prices, impacts profits…
Power of buyers ; can force prices down, demand more services, set competitors one against the other
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Market targetingSelecting Market SegmentsThree alternative market coverage strategies
1.Undifferentiated marketing Firm goes after the whole market with one offer
Company marketing mix Market
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Market targeting2.Differentiated marketing
Firm decides to target several market segments and designs separate offers for each
Company Mktg Mix 1 Segment 1Company Mktg Mix 2 Segment 2Company Mktg Mix 3 Segment 3
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Market targeting
3.Concentrated marketing: Firm goes after a large share of one or
a few submarkets
Company marketing mix
Segment 1
Segment 2
Segment 3
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Market targeting
Choosing a Market coverage strategy Company resources
Eg. Limited resources- concentrated marketing becomes more relevant…
Product variability Eg. Undifferentiated marketing more suited
for uniform products like grapefruit, or steel
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Market targetingChoosing a Market coverage strategy Product’s life cycle stage
New product introduction stage-practical to launch only one version and use undifferentiated or concentrated marketing
Market variability If most buyers have same taste, react the same way to
marketing efforts- undifferentiated marketing becomes appropriate …
Competitor’s marketing strategy When competitors use differentiated or concentrated
marketing – undifferentiated marketing can be suicidal
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Positioning for competitive advantage Product positionThe way the product is defined by consumers on
important attributes – the place the product occupies in consumers’ minds relative to competing products…
Competitive advantageAn advantage over competition gained by offering
consumers greater value , either thru lower prices or by providing more benefits that justify higher prices
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Positioning
Identifying possible competitive advantages
1.Product differentiation: Consistency, Durability, Reliability… Reparability
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Positioning
Identifying possible competitive advantages
2.Services differentiation: Speedy delivery, Convenient… Careful
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Positioning Identifying possible competitive advantages3.Channel differentiation:
coverage, expertise, performance
4.People differentiation : hiring & training better people
5.Brand image differentiation : McDonald’s golden arch, Prudential , Pillsbury doughboy provide strong co. or brand recognition
& image differentiation
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PositioningWhich differences to Promote ?A difference is worth establishing to the extent that it
satisfies the following criteria Important Distinctive Superior Communicable Preemptive Affordable… Profitable
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Selecting an overall Positioning Strategy
Value proposition Consumers choose products & services that give
them the greatest value Marketers therefore position their key benefits that
they offer relative to competing brands The full positioning of a brand is called “Brand’s
Value Proposition”… Volvo’s value proposition hinges on safety but also
includes reliability, roominess, and styling – all for a price that is higher than average but seems fair for this mix of benefits
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Positioning
Possible value propositionsBenefit for Price More for More More for the Same The Same for Less Less for Much Less… More for Less
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Possible value propositions
More The same Less
More More for more More for the same
More for less
The same The same for less
Less Less for much less
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