Unit II

•Market segmentation-
geographic, demographic, psychographic,behavioural
• Targeting; niche marketing; B2B, B2C
• Positioning and repositioning
Market segmentation
• Market segmentation is the process of dividing a potential market
into distinct sub –markets of consumers with common needs and
characteristics.
• Niche is a narrowly defined group of customers that have a distinct
and complex set of needs
Benefits of market segmentation
• Helps know company capabilities: by looking at a
particular segment company can carry SWOT analysis
• Provide opportunities to expand market: by
segmenting the market, a marketer is able to create
new markets for their product .
• Helps create innovation: marketer get benefits in
focusing the relevant segment more closely and look
for changes in the market requirement.
• Create gains to customers: segmentation result into
wars and the consumers gain in terms of added
quantity and variety.
Requisites of effective segmentation
• Measurable and obtainable: the size ,profile and other
relevant characteristics of the segment must be
measurable and obtainable in terms of data.
• Substantial :the segment should be large enough to
be profitable .for consumer markets ,the small
segment might disproportionally increase the cost
and hence product might be priced too high.
• Accessible: the segment must be accessible through
existing network of people at a cost that is affordable.
• Differentiable: the basis of segmentation should be
such that it leads to different segment .
• Actionable: the segments which a company wishes to
pursue must be actionable in the sense that there
should be sufficient finance, personnel and capability
to take them all.
• General consideration: must have growth
potential,profitable,carries no unusual risk and has
competitors who do not fight directly with the
product.
Philosophies of market segmentation
• Mass marketing :before the onset of the marketing
age ,there was wide-spread adoption of mass
marketing, mass production,distribution,and
promotion.
• Product-variety marketing: once it is learnt that the
consumer would not accept standard products, the
marketer might try to provide different
sizes,colour,shapes,features and qualities to attract
them. The product variety approach satisfies a
customer more than standardized one model product.
• Target marketing: target marketing helps the marketer
to correctly identify the markets -the group of
customers for whom the product is designed.
• Micro-marketing: it occurs when target market in
further bifurcated and the needs of the smaller
customer group are addressed on a local basis.
• Customized marketing: the focus of the target
marketing is further shifting from local basis to
individual customer basis.
• Personalized marketing: mass production with
product varieties ,and target marketing for segments,
which are further divided into customers on a local
basis or on individual customer needs, the focus of
the company is shifting more minutely.
Mass • Total market as one segment
mark
eting

Prod
uct-
varie • Mass marketing with product variety
ty
mae
ketin
g
Targ • Total market different segment
et
mark
eting

Micr
o • Serves one segment on local basis
mark
eting

Cust
omiz • Serves individual customer needs
ed
mark
eting

Pers
onali • Serve the person customer needs
zed
mark
eting
Bases of market segmentation
• Geographic segmentation
• Demographic segmentation
• Psychographic segmentation
• Behavioral segmentation
 • North
Geographic • East
segmentation region • West
• south
• central

• Metropolitan cities
City size • Small cities
• Town

• Urban
Density • Semi urban
of area • rural

Climate •Hot
•Humid
•Cold
•Rainy
Demographic segmentation

 age
Sex
Marital status
Income
Family size
Occupation
Family life style and cycle
Religion
Nationality
Psychographic
segmentation

Life style • Conservative,Liberal,Health and fitness

conscious, adventuresome, status seekers

• Lower class, lower middle class, middle class,

Social class rich class

• Continental,mughai,chienese,indian,north
Cultural indian,south Indian

personality • Extrovert,introvert,aggressive,complainants
 Behavioural segmentation

Needs- Perception Learning

motivation involvement Readiness
• Low risk Benefits
• Shelter • Moderate risk • Low involvement stage
• High risk Convenience
• Safety • High involvement Unaware
• Security Attitude Prestige
• affection Aware
Positive Occasions Economy
• Sense of self Informed
worth Negative Regular Value for
Interested
neutral special money
Desirous
Quality
Intending to
services
buy
enthusiastic
Steps in market segmentation
1. Identify the target market: The first and foremost step is to
identify the target market. The marketers must be very clear
about who all should be included in a common segment.
Make sure the individuals have something in common. A
male and a female can’t be included in one segment as they
have different needs and expectations.
• Maruti Suzuki has adopted a focused approach and wisely
created segments within a large market to promote their cars.
• Lower Income Group - Maruti 800, Alto
Middle Income Group - Wagon R, Swift, Swift Dzire, Ritz
High Income Group - Maruti Suzuki Kizashi, Suzuki Grand
VitaraSuzuki Grand Vitara would obviously have no takers
amongst the lower income group.
2. Identify expectations of Target Audience
• Once the target market is decided, it is essential to find
out the needs of the target audience. The product must
meet the expectations of the individuals. The marketer
must interact with the target audience to know more
about their interests and demands.
• Kellogg’s K special was launched specifically for the
individuals who wanted to cut down on their calorie
intake.
• Marketing professionals or individuals exposed to sun
rays for a long duration need something which would
protect their skin from the harmful effects of sun rays.
Keeping this in mind, many organizations came with the
concept of sunscreen lotions and creams with a sun
protection factor especially for men.
3. Create Subgroups
• The organizations should ensure their target market is
well defined. Create subgroups within groups for
effective results.
• Cosmetics for females now come in various
categories.
• Creams and Lotions for girls between 20-25 years would
focus more on fairness.
• Creams and lotions for girls between 25 to 35 years
promise to reduce the signs of ageing.
4. Review the needs of the target audience
• It is essential for the marketer to review the needs
and preferences of individuals belonging to each
segment and sub-segment. The consumers of a
particular segment must respond to similar
fluctuations in the market and similar marketing
strategies.
5. Name your market Segment
• Give an appropriate name to each segment. It makes
implementation of strategies easier.
• A kids section can have various segments namely new
born, infants, toddlers and so on.
6. Marketing Strategies
• Devise relevant strategies to promote brands amongst each
segment. Advertisements promoting female toiletries can’t afford
to have a male model.
• A model promoting a sunscreen lotion has to be shown roaming or
working in sun for the desired impact.
7. Review the behavior
• Review the behavior of the target audience frequently. It is not
necessary individuals would have the same requirement (demand)
all through the year. Demands vary, perceptions change and
interests differ. A detailed study of the target audience is essential.
8. Size of the Target Market
• It is essential to know the target market size. Collect necessary data
for the same. It helps in sales planning and forecasting.
Market segment selection
• Once the marketer has evaluated the different
segments for their size,growth,and attractiveness ,and
found that they are compatible with the company
objective and resources, the obvious step is to go far
selecting the market segment .kotler has suggested
five patterns of target market selection
Contd…
• Single segment concentration: the company may
select single segment eg sport car manufacturing
company. Through concentrated marketing the firm
gains a strong knowledge of segment needs and
achieve a strong market presence.
• Selective specialization: the firm selects a number of
segment each objectively attractive and appropriate
eg television channels
• Product specialization: here the firm specializes in
making a certain product that it sells to several
segments.eg microscopes universities, lab,
commercial labs etc.through such kind of
specialization the firm builds a strong reputation in
specific product area.
• Market specialization: here the firm concentrates on
serving many needs of the particular customer
group.eg the firm sells product only to university lab
includes microscope,burners,chemical flasks etc.
• Full market coverage: here the firm attempts to serve
all customer group with all the product they might
need ,only a very large firm can undertake a full
market coverage.
Positioning
• It is the act of designing the company’s offering and
image to occupy a distinctive place in the target
market’s mind.
• Many marketers advocate promoting only one central
benefit referred to as Unique Selling Proposition
(USP).which includes “best quality", "best services",
"lowest price"," best value"," safest” etc.
• Positioning of product or service is nothing but
creating a image in consumer’s mind .consumer
generally tend to use images while making a purchase
;they buy brand image rather than actual product.
Consumer associate brand name with life style, social
position, professional roles and these association
combine to form an image or position.
Qualities of a successful position
• Relevance
• Distinctiveness
• Durability
• Clarity
• Courage
Positioning approaches
• Positioning by product attributes
• Positioning by price-quality
• Positioning by product-user
• Positioning by use of application
Product repositioning
• Wahaha - Taking the fizz out of the giant cola brands!

When Zong Qinghou, a Chinese farm worker, started a company of beverages and ice creams with two retired
teachers in 1987, hardly anyone could have imagined that this company could give sleepless nights to global
giants such as Coca-Cola and Pepsi Co. But the new company, Wahaha, the pride of many contemporary
Chinese consumers, has managed to do just that.Wahaha, one of the leading homegrown Chinese beverage
brands, had revenues of US$1.37 billion (11.4 billion yuan) and profits of US$162.7 million (1.34 billion
yuan) in 2004.Wahaha, which is meant to mimic the sound of a baby laughing, demonstrates clearly what
great brand stories are made of. The company started small, and in 1991, it merged with the state-owned
Hangzhou Canning Factory. The 1996 joint venture with the Danone Group gave the company foreign
investment to the extent of US$45 million. After dabbling in many product categories, it launched its
trademark brand the "Future Cola" in 1998 to compete against the global cola giants.Today, Wahaha's product
portfolio includes milk and yogurt drink, purified and mineral water, carbonated soft drink, fruit and vegetable
juice, sports drink, and iced tea including cognee (rice porridge), canned food and health products.
• Wahaha has been careful in its strategy to compete against the global cola and food giants. As the fashion
conscious Chinese consumers seem to prefer the global colas in the larger costal Chinese cites, Wahaha has till
now focused on rural and semi-urban Chinese areas. Further, the Wahaha brand has generously used home
grown celebrities for all its products. This is in line with its overall strategy to position Wahaha as a patriotic
company and to tap into the patriotic farvor of the Chinese consumers. By projecting Wahaha's products as
China's own, the Wahaha brand has carved out a clear positioning in the market against the global brands. But
whether this strategy will work in the long run is a million dollar question and will require constant efforts to
balance the brand promise and its careful delivery in a hostile and increasingly competitive Chinese market
place
questions
• What aspects of consumer behaviour have been
discussed in this case
• Discuss the positioning strategy of wahaha