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MARKETING MANAGEMENT 13 th edition 8 Identifying Market Segments and Targets Kotler Keller
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MARKETING MANAGEMENT13th edition
8 Identifying Market
Segments and Targets
Kotler Keller
CHP: 8&10-2
Effective Targeting Requires…
• Identify and profile distinct groups of buyers who differ in their needs and preferences.
• Select one or more market segments to enter.
• Establish and communicate the distinctive benefits of the market offering.
CHP: 8&10-4
Steps in Market Segmentation, Targeting, and Positioning
Market Segmentation
1. Identify bases for segmenting the market2. Develop segment profiles
Market Segmentation
1. Identify bases for segmenting the market2. Develop segment profiles
Market Targeting3. Develop measure of segment attractiveness4. Select target segments
Market Targeting3. Develop measure of segment attractiveness4. Select target segments
Market positioning5. Develop positioning for target segments6. Develop a marketing mix for each segment
Market positioning5. Develop positioning for target segments6. Develop a marketing mix for each segment
CHP: 8&10-5
Four levels of Micromarketing
Segments
Local areas Individuals
Niches
CHP: 8&10-6
Niches
• A niche is a more narrowly defined customer group seeking a distinctive mix of benefits.
• Godrej ezee
• Vicco vajradanti
• Qtv, star sports, asta
• The customer have a distinctive set of needs ; they will pay a premium to the firm that best satisfies them; the niche is fairly
CHP: 8&10-7
• Small but has size ,profit and growth potential and is unlikely to attract many other competitors ;and the nicher gain certain economies through specialization.
CHP: 8&10-8
Local marketing
• Target marketing is leading to marketing programs tailored to the needs and wants of local customers groups in trading areas , neighborhoods , even individual stores.
• Many banks in India have specialized branches that exclusively caters to the corporate customers. Many banks have NRI branches
• Spiderman 3• Bharat matrimony • This reflect the growing trend of grass root
marketing.
CHP: 8&10-9
Individual marketing/customerization• Galleria visa card
• Nerolac , asian paints etc
• Customerization can raise the price of the good by more than the customer is willing to pay and it is not possible for complex product like automobile.
CHP: 8&10-10
Segment Marketing
Targeting a group of customerswho share a similar set of
needs and wants.
CHP: 8&10-11
Basic Market Preference Patterns
CHP: 8&10-12
Customerization
Combines operationally drivenmass customization with customizedmarketing in a way that empowers
consumers to design theproduct and service offering
of their choice.
CHP: 8&10-13
Segmenting Consumer Markets
GeographicGeographic
DemographicDemographic
PsychographicPsychographic
BehavioralBehavioral
CHP: 8&10-14
Geographic segments
• Region , city ,rural and urban. • Coolers• Tea• Coffee• In India 80% literate• 5,000 towns• 638,000 villages• Number of consumers, their consumpti behavior,
awareness level , availability of market support infrastructure.
CHP: 8&10-15
Demographic Segmentation
Age and Life CycleAge and Life Cycle
Life StageLife Stage
GenderGender
IncomeIncome
GenerationGeneration
Social ClassSocial Class
CHP: 8&10-16
Age and life cycle stages
• Consumers wants and abilities change with age.
• Johnson & Johnson baby soap for children
• MTV, VTV –youngsters
• Discovery channel-for nature ,science and history loving person
• Clearsil cream-adolescent
CHP: 8&10-17
Life stage
• Persons in the same part of the life cycle may differ in their life stage.
• Life stages defines the major concern like ,getting married, deciding to buy a to the home, sending the child to the school ,taking care of older family members .
• Insurance
CHP: 8&10-18
Gender
• Man and women have different attitude and behave differently ,based partly on generic makeup and partly on socialization.
• Women tend to be communal minded and men tend to be more self expressive and goal directed ;women tend to take in more of the data in their immediate environment ,men tend to focus on the part of the environment that helps them achieve a goal.
CHP: 8&10-19
• Men often need to be invited to touch a product while women are likely to pick it up without prompting.
• Products for men and women
• Women buy product mainly for family , 51% hair wash product, 52% freshening , 55 % personal wash product .
CHP: 8&10-20
income
• Income determines the ability of a customer to participate in the market exchange and hence this is a basic segmentation variable.
• Nirma detergent powder for middle class family “valu for money proposition”
• Different products are available in sachet –with low unit price meant for one time consumption
• “phone ladies”• Innovative ways to cater to the requirements of
the poorer consumers not only serves a social cause but also generates income.
CHP: 8&10-21
Generation
• Each generation is profoundly influenced by the time in which it grows up-the music, movies , politics ,and defining events of the period.
• 4-14 plays a major role in the buying decision of families in urban areas.
• Most of the children obtain required information from the television(93%), followed by print media
CHP: 8&10-22
Social class
• Social class has a strong influence on preferences in cars ,clothing , home furnishing, , leisure activities, reading habits etc. This is very unique system in India
CHP: 8&10-24
• MC Donald
• Titan
• Those who are primarily motivated by ideals are guided by knowledge and principles.
• Those motivated by achievement look for products and services that demonstrate success to their peers
• Consumers whose motivation is
CHP: 8&10-25
• Self expression desire social and physical activities ,variety and risk.
• The four groups with higher resources are: innovators, thinkers ,achievers and experiencers
• And four group with lower resources
• Believers, strivers ,makers, survivors
CHP: 8&10-26
Behavioral Segmentation
Decision Roles
• Initiator
• Influencer
• Decider
• Buyer
• User
Behavioral Variables
• Occasions
• Benefits
• User Status
• Usage Rate
• Buyer-Readiness
• Loyalty Status
• Attitude
CHP: 8&10-27
Behavioral Segmentation Breakdown
CHP: 8&10-28
Segmenting for Business Markets
DemographicDemographic
Operating VariableOperating Variable
Purchasing ApproachesPurchasing Approaches
Situational FactorsSituational Factors
PersonalCharacteristics
PersonalCharacteristics
CHP: 8&10-29
Segmenting for Business Markets
• Demographic segmentation– Industry, company size, location
• Operating variables– Technology, usage status,
customer capabilities• Purchasing approaches• Situational factors
– Urgency, specific application, size of order
• Personal characteristics– Buyer-seller similarity, attitudes
toward risk, loyalty
CHP: 8&10-30
• Size, purchasing power, profiles of segments can be measured.
• Segments can be effectively reached and served.
• Segments are large or profitable enough to serve.
Measurable Measurable
AccessibleAccessible
SubstantialSubstantial
DifferentialDifferential
ActionableActionable
• Segments must respond differently to different marketing mix elements & programs.• Effective programs can be designed to attract and serve the segments.
Effective Segmentation Criteria
CHP: 8&10-31
Market TargetingEvaluating Market Segments
• Segment Size and Growth– Analyze current sales, growth rates and expected
profitability for various segments.• Segment Structural Attractiveness
– Consider effects of: competitors, availability of substitute products and, the power of buyers & suppliers.
• Company Objectives and Resources– Company skills & resources needed to succeed in
that segment(s).– Look for Competitive Advantages.
CHP: 8&10-32
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing Mix 1
CompanyMarketing Mix 1
CompanyMarketing Mix 2
CompanyMarketing Mix 2
CompanyMarketing Mix 3
CompanyMarketing Mix 3
MarketMarket
A. Undifferentiated Marketing
B. Differentiated Marketing
C. Concentrated Marketing
Market TargetingMarket Coverage Strategies
CHP: 8&10-33
Patterns of Target Market Selection
CHP: 8&10-34
Patterns of Target Market Selection
CHP: 8&10-35
Patterns of Target Market Selection
MARKETING MANAGEMENT13th edition
10 Crafting the Brand
Positioning
Kotler Keller
CHP: 8&10-37
Marketing Strategy
SegmentationSegmentation
TargetingTargeting
PositioningPositioning
CHP: 8&10-38
Positioning
Act of designing the company’soffering and image to occupy
a distinctive place in the mind ofthe target market.
CHP: 8&10-39
Choosing a Positioning Strategy
Step 1. Identifying Possible
Competitive Advantages
Step 2. Selecting the Right
Competitive Advantage
Step 3. Communicating and
Delivering the Chosen Position
CHP: 8&10-40
Defining Associations
Points-of-difference (PODs)
• Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand
Points-of-parity
(POPs)• Associations that are
not necessarily unique to the brand but may be shared with other brands
CHP: 8&10-41
Consumer Desirability Criteria for PODs
RelevanceRelevance
DistinctivenessDistinctiveness
BelievabilityBelievability
CHP: 8&10-42
Deliverability Criteria for PODs
FeasibilityFeasibility
CommunicabilityCommunicability
SustainabilitySustainability
CHP: 8&10-43
Examples of Negatively Correlated Attributes and Benefits
• Low-price vs. High quality
• Taste vs. Low calories
• Nutritious vs. Good tasting
• Efficacious vs. Mild
• Powerful vs. Safe
• Strong vs. Refined
• Ubiquitous vs. Exclusive
• Varied vs. Simple
CHP: 8&10-44
• Positioning: How many ideas to promote?
• Unique selling proposition
– Four major positioning errors1. Underpositioning
2. Overpositioning
3. Confused positioning
4. Doubtful positioning
Developing and Communicating a Positioning Strategy
CHP: 8&10-45
Differentiation Strategies
Product
Channel Image
Personnel
CHP: 8&10-46
Product Differentiation
• Product form• Features• Performance• Conformance• Durability• Reliability• Reparability
• Style• Design• Ordering ease• Delivery• Installation• Customer training• Customer consulting• Maintenance
CHP: 8&10-47
Identity and Image
Identity:
The way a
company aims to
identify or
position itself
Image:
The way the
public perceives
the company or its
products
