Market Segmentation

S.No. - 2/3LECTURE TITLE MARKET SEGMENTATION

MODULE 2 (HEALTHCARE MARKETING AND PATIENTS RELATIONS MANAGEMENT

1Market Segmentation ICRI, Mumbai

Steps in Market Segmentation, Targeting, and Positioning3Market Segmentation (Research)1. Identify bases for segmenting the market2. Develop segment profilesMarket Targeting3. Develop measure of segment attractiveness4. Select target segmentsMarket positioning5. Develop positioning for target segments6. Develop a marketing mix for each segment3Step 1. Market SegmentationLevels of Market Segmentation4Through 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)4Levels of Market Segmentation5Niche MarketingDifferent products to subgroups within segments(more segmentation, i.e. Standard or Luxury SUVs)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. Dell5SEGMENT 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 subsegmentsDistinctive 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 potentialGuerilla against GorillaIBM/ ezee/ Crack/ Genentech (cancer drugs)/ Spirulina/ German tech firmsStep 1. Market SegmentationGeographic Segmentation8 Density or ClimateCity or Metro SizeWorld Region or Country

8Step 1. Market SegmentationDemographic Segmentation

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

9Most Popular Bases & Easiest to Measure

9Step 1. Market SegmentationPsychographic Segmentation10Social ClassLifestylePersonalityDivides Buyers Into Different Groups Based on:10Step 1. Market SegmentationBehavioral SegmentationDividing the market into groups based on variables such as:OccasionsBenefitsUser statusUsage rateLoyalty statusReadiness stageAttitude toward product

1111Segmenting Business Markets12DemographicsOperating VariablesPurchasing ApproachesSituational FactorsPersonal CharacteristicsBusiness Marketers Use Many of the Same Consumer Variables, Plus:

12Segmenting International Markets13Factors Used to Segment International Markets

Geographic Location

EconomicFactorsPolitical and Legal Factors

Cultural Factors13Step 1. Market SegmentationRequirements for Effective Segmentation14 Size, purchasing power, profiles of segments can be measured. Segments can be effectivelyreached and served. Segments are large or profitable enough to serve. MeasurableAccessibleSubstantialDifferentialActionable Segments must respond differently to different marketing mix elements & programs. Effective programs can be designed to attract and serve the segments.14Step 2. Market TargetingEvaluating Market SegmentsSegment Size and GrowthAnalyze 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.15

15Step 2. Market TargetingMarket Coverage Strategies16Segment 1Segment 2Segment 3Segment 1Segment 2Segment 3CompanyMarketingMixCompanyMarketingMixCompanyMarketing Mix 1CompanyMarketing Mix 2CompanyMarketing Mix 3MarketA. Undifferentiated MarketingB. Differentiated MarketingC. Concentrated Marketing16Step 2. Market TargetingChoosing a Market-Coverage Strategy17Company ResourcesProduct VariabilityProducts Stage in the Life CycleMarket VariabilityCompetitors Marketing Strategies17Socially 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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18Discussion 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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19How 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 StrategyProducts 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.21

21Step 3. Choosing a Positioning Strategy 22Step 1. Identifying Possible Competitive AdvantagesStep 2. Selecting the Right Competitive AdvantageStep 3. Communicating and Delivering the Chosen Position22Identifying 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,23

23Identifying Possible Competitive Advantages24ServicesDifferentiationi.e. Delivery, Installation, Repair Services, Customer Training ServicesProduct Differentiationi.e. Features, Performance, Style & Design, or AttributesImageDifferentiationi.e. Symbols, Atmospheres, EventsPersonnel Differentiationi.e. Hiring, Training Better People Than Competitors Do24Choosing the Right CompetitiveAdvantages25CriteriaFor DeterminingWhich DifferencesTo Promote

AffordableSuperiorProfitablePreemptiveDistinctiveImportantCommunicableUnique Selling Proposition25Selecting an Overall Positioning Strategy (Fig. 7.4)

26MoreforMoreMorefor thesameMore forLessThe samefor lessLess formuchlessPriceMore The same LessMore

The Same

LessBenefits26Communicating 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 companys marketing mix must support the positioning strategy.Positioning strategy must be monitored and adapted over time to match changes in consumer needs and competitors strategies.27

27Review 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.28

28Explain 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