MM II

Dr. T. K. Chatterjee, MBA, PhD.

 Definition of Marketing

American Marketing Association ---- “Marketing is an

organizational function and a Set of processes for
creating, communicating, and delivering value to
customers And for managing customer relationships in
ways that benefit organization and its Stakeholders.”

Metamarket is a cluster of complementary products and

services that are closely related in the minds of consumers,
but spread across a diverse set of industries.
Mohan Sawhney, Northwestern University
Ambush marketing is a marketing
campaign that takes place around an event but
does not involve payment of a sponsorship fee to
the event.[1] For most events of any significance,
one brand will pay to become the exclusive and
official sponsor of the event in a particular category
or categories, and this exclusivity creates a
problem for one or more other brands. Those other
brands then find ways to promote themselves in
connection with the same event, without paying the
sponsorship fee and without breaking any laws
The concept of guerrilla marketing was
invented as an unconventional system of
promotions that relies on time, energy and
imagination rather than a big marketing budget.
Typically, guerrilla marketing campaigns are
unexpected and unconventional; potentially
interactive;[1] and consumers are targeted in
unexpected places.[2] The objective of guerrilla
marketing is to create a unique, engaging and
thought-provoking concept to generate buzz, and
consequently turn viral. The term was coined and
defined by Jay Conrad Levinson in his book
Guerrilla Marketing. The term has since entered the
popular vocabulary and marketing textbooks.
Marketing And Customer Value
Market Segmentation And
Targeting
 Definition Of Marketing
Management
“Marketing Management is the art and science of choosing
Target Markets and getting , keeping , and growing customers
Through creating , delivering and communicating superior
Customer value”.

Philip Kotler
 Jagdish Sheth : 4A Framework
The authors present a powerful and tested
approach that helps managers see a business’s
every action through the eyes of its customers. This
approach is organized around the values that matter
most to customers: Acceptability,
Affordability, Accessibility and
Awareness. Taken together, these attributes are
called the “4A’s.” The 4A framework derives from a
customer-value perspective based on the four
distinct roles that customers play in the market:
seekers, selectors, payers and users. For a
marketing campaign to succeed, it must achieve
high marks on all four A’s, using a blend of
marketing and non-marketing resources.
 Market Segment
A market segment is a group of people or organizations sharing
one or more characteristics that cause them to have similar
product and/or service needs. A true market segment meets
all of the following criteria: it is distinct from other segments
(different segments have different needs), it is homogeneous
within the segment (exhibits common needs); it responds
similarly to a market stimulus, and it can be reached by a
marketing intervention.
 Market Segmenting
Market segmenting is the process wherein a company divides
the market into distinct groups who have distinct needs,
wants, behaviour or who might want different products &
services.
Gillette Venus Razor : Targeted to Women
The VALS Segmentation System
Psychographic Segmentation
Levels Of Market Segmentation
The starting point for discussing SEGMENTATION is Mass
Marketing. In mass marketing , the seller engages in the
Mass production , mass distribution , and mass promotion
Of one offering for all buyers.

Henry Ford epitomized this phenomenon when he offered

The Model-T Ford in one color ----- BLACK !!

Coca-Cola also practiced mass marketing when it sold only

One kind of coke in a 6.5-ounce bottle.
 Levels Of Market Segmentation
Mass Marketing targets the largest potential market , which
Results in economies of scale in production.
Increasing splintering of the market due to proliferation of
Advertising and mass media , renders mass marketing a
Difficult proposition. It is increasingly expensive to reach a mass
Audience. Mass marketing is almost a “Dying Phenomenon” in
Current context.
Most companies are turning to “Micromarketing” at one of the
Four levels : : Segments / Niches / Local areas/ Individuals
 Segment Marketing
While segment marketing attempts to identify segments , one
Must be careful about differentiating a segment from a
Sector.
Young middle income car buyers constitute a sector and not
A segment since they might vary in their preferences.
Remember : A Marketer does not create the segments , he
Only identifies them and then decides which one(s) to target.
 Segment Marketing
Segment Marketing offers distinct benefits over mass
Marketing. The company can better design the marketing mix –
All Ps to satisfy the targeted segment(s). Even a segment is
Partly a myth , since in a segment also not everyone wants
Exactly the same thing. Anderson and Narus have suggested
That Marketers should offer a flexible offering to all members
In a segment.
A flexible market offering consists of two parts : : :
Naked solution that all segment members value
Discretionary options that some segment members value
Economy class

First class
 Niche Marketing
A niche is a more narrowly defined customer group seeking
A distinctive mix of benefits. While further dividing segments
Into subsegments marketers identify niches.
An attractive niche is characterized as follows : : :
Customers have a distinct set of needs
Will pay a premium if needs are fully satisfied
Not likely to attract other competitors
Offers economies through specialization
Has size , profit and growth potential.

Even some large companies have adopted niche marketing

Like Hallmark has identified niches in $7.8 billion global
Greetings card market and targets them with specifically
Designed cards for these niches.
 Local Marketing
Target Marketing is leading to marketing programs aimed at
Addressing needs and wants of local customer groups ----
Trading areas , neighborhoods even individual stores.
Citibank provides different mixes of banking services
Depending on local demography.
 Local Marketing
Local Marketing reflects a growing trend called “Grassroots
Marketing”. Marketing activities gravitating to getting as close
And personally relevant to individual customers as possible.
Much of Nike’s initial success is attributed to their focus on
Grassroots marketing through local events at school level etc.
 Grassroots Marketing
A major part of local , grassroots marketing is Experiential
Marketing ----- wherein the idea is not to sell something but
To demonstrate how a brand can enrich a customer’s life.
We are on the threshold of the “Experience Economy”, a new
Economic era , wherein all businesses have to orchestrate an
Experience for the customer to survive ----- remember brand
Differentiation is absolutely blurred today so only differentiator
Is the experience ----experience ----- and experience !!!

Mahindra orchestrates an experience at dealer point while

Delivering its vehicles to customers ------------ next slide.
Self delivering an experience to Mr. Vijay Mohanty , Oriya film star

Self as CEO of Utkal Automobiles

2005
 Experiential Marketing
•If you charge for stuff, you are in commodity business.

•If you charge for tangible things , you are in goods business.

•If you charge for the activities , you are in service business.

•If you charge for the time , customers spend with you , then
And only then , you are in the experience business !!

Pine & Gilmore

 Customerization : Ultimate Level Of
Segmentation
Beyond segments there lie niches

Beyond niches there lie local markets

Beyond local markets lie “segments of one” – one to one marketing

Customerization basically combines operationally driven mass

Customization with customized marketing in a way that
Empowers consumers to design the product and service of their
choice through a concept called Choiceboard.

Dell is a good example of customerization.

Segmenting Consumer markets
Geographic Segmentation

Demographic Segmentation : : Age and lifecycle stage

Gender
Income
Generation
Social Class
Psychographic Segmentation : : Innovators
Thinkers
Achievers
Experiencers
Behavioral Segmentation : : Occasions
Benefits
User Status
Loyalty Status etc.
 Segmenting Business Markets
Demographic : Industry – which one to serve ?
Company --- what size to serve ?
Location--- what geographical area ?

Operating Variables : Technology

User or Nonuser
Customer Capabilities

Purchasing Approaches

Situational Factors : Urgency

Specific Application
Size of Order

Personal Characteristics
 Market Targeting
Once market-segment opportunities have been identified , firm
Has to decide how many and which ones to target.

Roger Best proposed the seven step approach : :

Needs-Based Segmentation
Segment Identification
Segment Attractiveness
Segment Profitability
Segment Positioning
Segment “Acid Test”
Marketing Mix Strategy
 Market Targeting
For qualifying a segment as target market, following Criteria
should be examined : : :

Measurable

Substantial

Accessible

Differentiable

Actionable
 Targeting Segments
Porter’s Five Forces Model
Evaluating and Selecting the Market
Segments

• The Segment’s overall attractiveness

• The Company’s objectives and resources

Evaluating and Selecting The Target
Segments

• The Segment’s overall attractiveness

• Company’s objectives and resources

Patterns Of Target Market
Selection
M1 M2 M3

P1

P2

P3
Patterns Of Target Market
Selection
M1 M2 M3

P1

P2

P3
Patterns Of Target Market
Selection
M1 M2 M3

P1

P2

P3
Patterns Of Target Market
Selection
M1 M2 M3

P1

P2

P3
Patterns Of Target Market
Selection
M1 M2 M3

P1

P2

P3
 Segment – By – Segment Invasion
Plans
Customer Groups

Company C
Package AC

Product
Varieties Split AC

Window AC Company B

Company A
Airlines Railroads Truckers

Company C invades segment-by-segment

 CONCLUSION
Market Segmentation and Targeting Markets are very
Critical aspects of a Marketer’s plan.

Markets can be targeted at four levels : :

Segments
Niches
Local Areas
Individuals.

There are some patterns of targeting the markets.

Dr. T. K. Chatterjee