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DISCLAIMER These notes are for the sole purpose of understanding the concepts of marketing and
DISCLAIMER
These notes are for the sole purpose of
understanding the concepts of marketing and are to
be used for class room purposes only. The logos of
certain manufactures used are owned by their
respective owners and unauthorized use of them may
lead to legal persecution.
This presentation also may contain copyrighted
material which on no account should be reproduced /
reprinted in any form without permission.
ProcterProcter && GambleGamble Sells multiple brands within the same product category for a variety of
ProcterProcter && GambleGamble
Sells multiple brands within the same product
category for a variety of products
Brands feature a different mix of benefits and
appeal to different segments
Has also identified different niches within
certain segments
Tide offers seven different product
formulations to serve different niches’ needs
Definition Market Segmentation: Dividing a market into distinct groups with distinct needs, characteristics, or
Definition
Market Segmentation:
Dividing a market into distinct groups with
distinct needs, characteristics, or behavior
who might require separate products or
marketing mixes.
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets

Identifying Market Segments and Targets

Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Identifying Market Segments and Targets
Bounce® Sheets can breathe a fresh scent into almost anything, Era® is a powerful laundry
Bounce® Sheets can breathe a
fresh scent into almost anything,
Era® is a powerful laundry
detergent that is tough on
from your favorite sweatshirt to
Dad's old recliner. Bounce Sheets
come in four great scents, and an
unscented variety.
stains.
Cheer® helps protect against
fading, color transfer and fabric
wear in powder or liquid, with or
without bleach.
Gain® laundry detergent and
fabric softener provide
excellent cleaning power and a
smell that says clean.
Mild cleansing benefits for a
gentle, pure and simple clean.
Downy® offers a line of
advanced fabric care
conditioning products that keep
clothes feeling soft and smelling
fresh.
Fabric cleaning and care at its
best
Dreft® is a specially formulated
detergent that rinses out thoroughly,
leaving clothes soft next to a baby's
skin. Dreft has been the No. 1
choice of pediatricians for years.
Febreze® Air Fresheners
utilize a unique odor-
eliminating technology to
clean away odors from the air.
Four levels of Micromarketing Segments Niches Local areas Individuals
Four levels of Micromarketing
Segments
Niches
Local areas
Individuals
Flexible Marketing Offerings Naked solution: Discretionary options: Product and service elements that all segment
Flexible Marketing Offerings
Naked solution:
Discretionary options:
Product and service
elements that all
segment members
value
Some segment
members value options
but not all
The company ignores market segment differences & Targets the whole market with one offer Focuses
The company ignores market segment
differences & Targets the whole market with
one offer
Focuses on what is ‘common’ rather than
‘different’
Generally it is difficult to develop a product or
brand that will satisfy all customers.
Preference Segments Homogeneous preferences exist when consumers want the same things Diffused preferences exist when
Preference Segments
Homogeneous preferences exist when
consumers want the same things
Diffused preferences exist when consumers
want very different things
Clustered preferences reveal natural
segments from groups with shared
preferences
Segmentation Strategies
Segmentation Strategies
Several market segments with separate offers for each Companies hope for higher sales and stronger
Several market segments with separate offers
for each
Companies hope for higher sales and stronger
position within each segment
Stronger positions within several segments
creates more total sales
Combined brands give much higher market
share
A strategy for a large share of one or few segments Through concentration, the firm
A strategy for a large share of one or few
segments
Through concentration, the firm achieves
stronger market position because of its
greater knowledge of the customers,
Tailoring products & marketing programs to the needs of specific individuals & local customer groups
Tailoring products & marketing programs to
the needs of specific individuals & local
customer groups
Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral
Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral
Demographic Segmentation Age and Life Cycle Life Stage Gender Income Generation Social Class
Demographic Segmentation
Age and Life Cycle
Life Stage
Gender
Income
Generation
Social Class
What is Customerization? Customerization combines operationally driven mass customization with customized marketing in a
What is Customerization?
Customerization combines operationally driven
mass customization with customized marketing in a
way that empowers consumers to design the product
and service offering of their choice.
GeographicGeographic SegmentationSegmentation VariablesVariables World Region or Country Indian Region State City
GeographicGeographic SegmentationSegmentation VariablesVariables
World Region or
Country
Indian Region
State
City
City or
Metro Size
Neighborhood
Density
Climate
Age & Lifecycle Stages
Age & Lifecycle Stages
Bank Al Habib targets senior citizens
Bank Al Habib
targets
senior citizens
Income Segmentation
Income Segmentation
The VALS Segmentation System
The VALS Segmentation System
Gender Segmentation Women make 90% of home improvement decisions. Women influence 80% of all household
Gender Segmentation
Women make 90% of home
improvement decisions.
Women influence 80% of all
household consumer purchases.
Market Segmentation Psychographic segmentation Lifestyle, social class, and personality-based segmentation
Market Segmentation
Psychographic segmentation
Lifestyle, social class, and personality-based
segmentation
Psychographic Segmentation When Honda markets its Reflex and Elite scooters, it appeals to the rebellious,
Psychographic Segmentation
When Honda markets its Reflex and Elite
scooters, it appeals to the rebellious,
independent kid in all of us.
Behavioral Segmentation Dividing a market into groups based on consumer knowledge, attitude, use or response
Behavioral Segmentation
Dividing a market into groups based on
consumer knowledge, attitude, use or
response to a product
Market Segmentation User Status: Usage Rate: Nonusers, ex-users Potential users First-time users Regular users
Market Segmentation
User Status:
Usage Rate:
Nonusers, ex-users
Potential users
First-time users
Regular users
Light
Medium
Heavy
Occasion Segmentation Occasion – Valentine’s Day, Father’s Day Special products for special occasions. (e.g.,
Occasion Segmentation
Occasion – Valentine’s Day, Father’s Day
Special products for special occasions.
(e.g., Kodak disposable cameras)
BehavioralBehavioral SegmentationSegmentation VariablesVariables Occasions Benefits User Status User Rates
BehavioralBehavioral SegmentationSegmentation VariablesVariables
Occasions
Benefits
User Status
User Rates
Loyalty Status
Readiness Stage
Attitude Toward the
Product
Loyalty Status Loyalty Status: Brands Stores Hard-core Companies Split loyals Shifting loyals Switchers
Loyalty Status
Loyalty Status:
Brands
Stores
Hard-core
Companies
Split loyals
Shifting loyals
Switchers
Geodemographic Segmentation Claritas, Inc. Potential Rating Index for Zip Markets (PRIZM) Based on U.S. Census
Geodemographic Segmentation
Claritas, Inc.
Potential Rating Index for Zip Markets (PRIZM)
Based on U.S. Census data
Profiles on 260,000 U.S. neighborhoods
62 clusters or types
Variations in the Buyer-Readiness Stage Aware Ever tried Recent trial Occasional user Regular user Most
Variations in the
Buyer-Readiness Stage
Aware
Ever tried
Recent trial
Occasional user
Regular user
Most often used
The Conversion Model Convertible Shallow Average Entrenched Users Nonusers Strongly Weakly Ambivalent Available
The Conversion Model
Convertible
Shallow
Average
Entrenched
Users
Nonusers
Strongly
Weakly
Ambivalent
Available
unavailable
unavailable
Segmenting for Business Markets Demographic Operating Variable Purchasing Approaches Situational Factors Personal
Segmenting for Business Markets
Demographic
Operating Variable
Purchasing Approaches
Situational Factors
Personal
Characteristics
Behavioral Segmentation Breakdown
Behavioral Segmentation Breakdown
Cross Classification Age Above 5 - 15 15 - 25 25 - 35 35 Occupation
Cross Classification
Age
Above
5 - 15
15 - 25
25 - 35
35
Occupation
Segment Variables
Age
Working Men
Qualification
Income
Students
Lifestyle
Location
Others
Occasion
Location
Income
Above
East
West
North
South
10k –
15k –
25k –
35k
Occasion
Delhi
Delhi
Delhi
Delhi
Lifestyle
15k
25k
35k
Formal
Progressive
Party
Modern
Casual
Conservative
Segmenting Business Markets Demographic segmentation Industry, company size, location Operating variables
Segmenting 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
Political & Legal Factors Geographical – Pacific Rim, Latin America, Middle East, Far East Political
Political & Legal Factors
Geographical – Pacific Rim, Latin America, Middle
East, Far East
Political – NAFTA (North American Free Trade
Association), ASEAN (Association of South East
Asian Nations)
Steps in Segmentation Process Needs-based segmentation Segment identification Marketing-Mix Strategy Segment
Steps in Segmentation Process
Needs-based segmentation
Segment identification
Marketing-Mix
Strategy
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Effective Segmentation Criteria Measurable Substantial Accessible Differentiable Actionable
Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable
Inter-market Segmentation Forming segments of consumers who have similar needs and buying behavior even though
Inter-market Segmentation
Forming segments of consumers who have
similar needs and buying behavior even
though they are located in different countries
Target Marketing Evaluating Market Segments Segment size and growth Analyze current segment sales, growth rates,
Target Marketing
Evaluating Market Segments
Segment size and growth
Analyze current segment sales, growth rates, and
expected profitability.
Segment structural attractiveness
Level of competition
Substitute products
Power of buyers
Powerful suppliers
Company objectives and resources
Examine company skills & resources needed to
succeed in that segment.
Offer superior value and gain advantages over
competitors.
Patterns of Target Market Selection
Patterns of Target Market Selection
Patterns of Target Market Selection
Patterns of Target Market Selection
Patterns of Target Market Selection Positioning Positioning: The place the product occupies in consumers’ minds
Positioning Positioning: The place the product occupies in consumers’ minds relative to competing products.
Positioning
Positioning:
The place the product occupies in
consumers’ minds relative to competing
products.
Typically defined by consumers on the
basis of important attributes.
Patterns of Target Market Selection
Patterns of Target Market Selection
Segment-by-Segment Invasion Plan
Segment-by-Segment Invasion Plan
What is Positioning? Positioning is the act of designing the company’s offering and image to
What is Positioning?
Positioning is the act of designing the
company’s offering and image to occupy a
distinctive place in the mind of the target
market.
Positioning of Café Coffee Day A “hangout place” for youngsters where “a lot can happen
Positioning
of Café
Coffee Day
A “hangout place” for
youngsters where “a lot
can happen over
coffee”.
Competitive Frame of Reference Category Membership: The products or sets of products with which a
Competitive Frame of Reference
Category Membership: The products or
sets of products with which a brand competes
and which function as close substitutes.
Defining Associations Points-of-difference (PODs) Attributes or benefits consumers strongly associate with a brand,
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
Positioning of Barista Positioned in the lines of traditional European cafes Targeted executive class of
Positioning of Barista
Positioned in
the lines of
traditional
European cafes
Targeted
executive class
of coffee-loving
customers
Value Propositions Scorpio, Mahindra and Mahindra A vehicle that provides the luxury and comfort of
Value Propositions
Scorpio, Mahindra and Mahindra
A
vehicle that provides the luxury and comfort
of
a car, and the adventure and thrills of an
SUV
Domino’s
A good hot pizza, delivered to your door
within 30 minutes of ordering, at a moderate
price
Establishing Category Membership This “four-in-one entertainment solution” from Konica failed to establish
Establishing Category Membership
This “four-in-one
entertainment solution”
from Konica failed to
establish category
membership
Competitive advantage Extent to which a company can position itself as providing superior value.
Competitive advantage
Extent to which a company can position itself
as providing superior value.
Identifying Possible Competitive Advantages Product Services Differentiation Differentiation (e.g., consistency,
Identifying Possible Competitive Advantages
Product
Services
Differentiation
Differentiation
(e.g., consistency,
durability, reliability,
(e.g., speed, convenience,
careful delivery)
repairability)
Channel
Differentiation
Image
People
Differentiation
Differentiation
(e.g., convey benefits and
positioning)
(e.g., hiring, training
better people than
competitors)
Positioning Map Positioning map for large luxury SUVs
Positioning Map
Positioning
map for large
luxury SUVs
Choosing a Positioning Strategy #1 Identify a set of possible competitive advantages on which to
Choosing a Positioning Strategy
#1 Identify a
set of possible
competitive advantages on
which to build a position
#2 Choose the right
competitive advantages
#3 Select an overall
positioning strategy
Perceptual Mapping EXPENSIVE Bacon and eggs Cold Cereals SLOW QUICK Pancakes Hot Cereal Instant Breakfast
Perceptual Mapping
EXPENSIVE
Bacon and eggs
Cold
Cereals
SLOW
QUICK
Pancakes
Hot Cereal
Instant Breakfast
INEXPENSIVE
Positioning Errors Underpositioning: Failing to really position the company at all. Overpositioning: Giving buyers
Positioning Errors
Underpositioning:
Failing to really position the company at all.
Overpositioning:
Giving buyers too narrow a picture of the company.
Confused Positioning:
Leaving buyers with a confused image of a company.
Possible Value Propositions
Possible Value Propositions
Examples of Negatively Correlated Attributes and Benefits Low-price vs. High quality Taste vs. Low calories
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
Differentiation Strategies Product Personnel Channel Image
Differentiation Strategies
Product
Personnel
Channel
Image
Possible Value Propositions MORE FOR MORE: The most upscale product MORE FOR SAME: Brands offering
Possible Value Propositions
MORE FOR MORE: The most upscale product
MORE FOR SAME: Brands offering (more) comparable quality
at a lower price
SAME FOR LESS: Equivalent quality at a lower price
LESS FOR MUCH LESS: Offers less, therefore costs less.
MORE FOR LESS: Better products and lower prices for a given
level of performance
Addressing negatively correlated PODs and POPs Present separately Leverage equity of another entity Redefine the
Addressing negatively correlated
PODs and POPs
Present separately
Leverage equity of another entity
Redefine the relationship
Product Differentiation Product form Features Performance Conformance Durability Reliability Reparability
Product Differentiation
Product form
Features
Performance
Conformance
Durability
Reliability
Reparability
Style
Design
Ordering ease
Delivery
Installation
Customer training
Customer consulting
Maintenance
Claims of Product Life Cycles Products have a limited life Product sales pass through distinct
Claims of Product Life Cycles
Products have a limited life
Product sales pass through distinct stages
each with different challenges and
opportunities
Profits rise and fall at different stages
Products require different strategies in each
life cycle stage
Introduction The need for immediate profit is not a pressure. The product is promoted to
Introduction
The need for immediate profit is not a pressure.
The product is promoted to create awareness.
If the product has no or few competitors, a
skimming price strategy is employed.
Limited numbers of product are available in few
channels of distribution
Strategies for Sustaining Rapid Market Growth Improve product quality, add new features, and improve styling
Strategies for Sustaining
Rapid Market Growth
Improve product quality, add new features, and
improve styling
Add new models and flanker products
Enter new market segments
Increase distribution coverage
Shift from product-awareness advertising to product-
preference advertising
Lower prices to attract the next layer of price-
sensitive buyers
Product Life Cycle
Product Life Cycle
Growth Competitors are attracted into the market with very similar offerings. Products become more profitable
Growth
Competitors are attracted into the market with
very similar offerings.
Products become more profitable and
companies form alliances, joint ventures and
take each other over.
Advertising spend is high and focuses upon
building brand.
Market share tends to stabilize
Maturity Those products that survive the earlier stages tend to spend longest in this phase.
Maturity
Those products that survive the earlier stages
tend to spend longest in this phase.
Sales grow at a decreasing rate and then
stabilize.
Producers attempt to differentiate products and
brands are key to this.
Price wars and intense competition occur.
At this point the market reaches saturation.
Producers begin to leave the market due to poor
margins.
Promotion becomes more widespread and use a
greater variety of media.
Marketing Program Modifications Prices Distribution Advertising Sales promotion Services
Marketing Program Modifications
Prices
Distribution
Advertising
Sales promotion
Services
Decline At this point there is a downturn in the market. Innovative products are introduced
Decline
At this point there is a downturn in the
market.
Innovative products are introduced or
consumer tastes have changed.
Intense price-cutting and many more
products are withdrawn from the market.
Profits can be improved by reducing
marketing spend and cost cutting.
PLC
PLC
Ways to Increase Sales Volume Convert nonusers Enter new market segments Attract competitors’ customers Have
Ways to Increase Sales Volume
Convert nonusers
Enter new market segments
Attract competitors’ customers
Have consumers use the product on more
occasions
Have consumers use more of the product on
each occasion
Have consumers use the product in new
ways
Characteristics & Responses Stage Characteristics Market growth rate Moderate High Insignificant Negative
Characteristics & Responses
Stage Characteristics
Market growth rate
Moderate
High
Insignificant
Negative
Changes in product design
Hight
Moderate
Limited
Limited
Segments
Few
Few to many
Few to many
Few
Competitors
Few
Many
Limited
Few
Profitability
Negative
High
High for mkt
share leaders
Low
Cash flow
Highly negative
Negative
Low to moderate
Moderate
Firm's Responses
Stimulate primary
Strategic mktg objectives
demand
Build share
Hold share
Harvest
Quality
Concentrate on
Product
Quality
improvements
features
No change
Product line
Narrow
Broad
Rationalize
Reduce length of
line
Skimming or
Price
penetration
Reduce
Hold
Reduce
Distribution
Selective
Intensive
Intensive
Selective
Communications
High
High
High
Reduce
Adapted from Walker and Boyd, Marketing Strategy, M cgraw-Hill, 4th edition.
PLC & Adoption Curve
PLC & Adoption Curve
Common Product Life-Cycle Patterns
Common Product Life-Cycle
Patterns
Market Evolution Stages Emergence Growth Maturity Decline
Market Evolution Stages
Emergence
Growth
Maturity
Decline
References Marketing Management – A South Asian Perspective 13the By Kotler, Keller, Koshy, Jha Principles
References
Marketing Management – A South Asian Perspective
13the By Kotler, Keller, Koshy, Jha
Principles of Marketing 11the – Kotler & Armstrong
SRI Consulting
Economic Times
Mint
Times of India
Multiple Resources on the internet
Rediffussion DYR
Style, Fashion, and Fad Life Cycles
Style, Fashion, and Fad Life Cycles
Emerging Markets Latent Single-niche Multiple-niche Mass-market
Emerging Markets
Latent
Single-niche
Multiple-niche
Mass-market