Target Market

Market: people or institutions with sufficient

purchasing power, authority, and willingness to buy

A target market is a group of people toward whom

a firm markets its goods, services, or ideas with a strategy designed to satisfy their specific needs and preferences.

Types of Markets:
Consumer Markets:
Goods or services purchased by an ultimate consumer for personal use. They sell the products to mass. Eg. Soft drinks, Cosmetics etc.

Business Markets:
Goods or services purchased for use either directly or

indirectly in the production of other goods and services for resale.

E.g.. Heavy equipments,

building etc.

 Global markets: When the company expand their

business and placed their products to international market.

Non-profit and Governmental market: eg. NGO

The Role of Market Segmentation

Market Segmentation: division of the total market

into smaller, relatively homogeneous groups No single marketing mix can satisfy everyone. Therefore, separate marketing mixes should be used for different market segments.

Step 1. Market Segmentation

Bases for Segmenting Consumer Markets
Geographic
Nations, states, regions or cities

Demographic
Age, gender, family size and life cycle, or income

Psychographic
Social class, lifestyle, or personality

Behavioural
Occasions, benefits sought, user status, usage rate, loyalty

The Market Segmentation Process

Stage I: Identify Segmentation Process

Stage II: Develop Relevant Profile

Stage III: Forecast Market Potential Stage IV: Forecast Market Share Stage V: Select Specific Segment

Advantages of Segmentation:
Increase in competitiveness

Market expansion
Customer retention Have better communication

Requirements of effective market segmentation:

Measurable
Size, purchasing power, profiles of segments can be measured. Segments can be effectively reached and served.

Accessible

Substantial

Segments are large or profitable enough to serve.

Differential

Segments must respond differently to different marketing mix elements & programs.

Actionable

Effective programs can be designed to attract and serve the segments.

Steps in Segmentation, Targeting, and Positioning :

6. Develop Marketing Mix for Each Target Segment 5. Develop Positioning for Each Target Segment 4. Select Target Segment(s) 3. Develop Selection Criteria 2. Develop Profiles of Resulting Segments 1. Identify Bases for Segmenting the Market

Market Positioning

Market Targeting

Market Segmentation

Levels of Market Segmentation:

Mass Marketing
Same product to all consumers (no segmentation)

Segment Marketing
Different products to one or more segments (some segmentation)

Niche Marketing
Different products to subgroups within segments (more segmentation)

Micromarketing
Products to suit the tastes of individuals and locations (complete segmentation)
Local Marketing
Tailoring brands/ promotions to local customer groups

Individual Marketing
Tailoring products/ programs to individual customers

Step 1. Market Segmentation

Bases for Segmenting Business Markets
Personal Characteristics Demographics

Situational Factors

Bases for Segmenting Business Markets

Operating Characteristics

Purchasing Approaches

Segmenting Business Markets

Segmentation by customer size or geographic location Four segments of business customers
Programmed buyers

Relationship buyers
Transaction buyers

Bargain hunters

Market Targeting
Focusing marketing decisions on a very specific group of people an organization wants to reach. Identifying and developing products/ services for a specific market.

Evaluating Market Segments (developing selection criteria)

Segment Size and Growth Analyze sales, growth rates
and expected profitability for various segments.

Segment Structural Attractiveness effects of:

Competitors, Availability of Substitute Products and,

Company Objectives and Resources

Company skills & resources relative to the segment(s). Look for Competitive Advantages.

Strategies for Reaching Target Markets

Company Marketing Mix

A. Undifferentiated Marketing

Market

Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3

B. Differentiated Marketing

Segment 1

Segment 2
Segment 3

Company Marketing Mix

Segment 1 Segment 2

Segment 3
C. Concentrated Marketing

Undifferentiated Marketing
when a firm produces only one product or product line and promotes it to all customers with a single marketing mix
Sometimes called mass marketing

Much more common in the past

Differentiated Marketing
when a firm produces numerous products and promotes them with a different marketing mix designed to satisfy smaller segments
Tends to raise costs Firms may be forced to practice differentiated

marketing to remain competitive

Concentrated Marketing
when a firm commits all of its marketing resources to serve a single market segment
Attractive to small firms with limited resources and to

firms offering highly specialized goods and services

Step 2. Market Targeting

Choosing a Market-Coverage Strategy
Company Resources Product Variability Products Life-Cycle Stage Market Variability Competitors Marketing Strategies

Most attractive target markets

A firm must evaluate the various segments ,decide how many &which ones to target: Single segment concentration. Selective specialization. Product specialization. Market specialization. Full market coverage.

 Positioning is the development of a service and a

POSITIONING

marketing mix to occupy a specific place in the minds of customers within target markets. Positioning is what the customer believes about your products value, features, and benefits; it is a comparison to the other available alternatives offered by the competition. These beliefs tend to based on customer experiences and evidence , rather than awareness created by advertising or promotion. Marketers manage product positioning by focusing their marketing activities on a positioning strategy. Pricing, promotion, channels of distribution, and advertising all are geared to maximize the chosen positioning strategy.

7 POSITIONING STRATEGIES

1. Positioning by products attributes and benefits: Associating a product with an attributes, a product feature or a

consumer feature. Sometimes a product can be positioned in terms of two or more attributes simultaneously. The price and quality dimension is commonly used for positioning the products. Like, Colgate offers benefit of preventing cavity and fresh breath. Ariel offers a specific benefit of cleaning even the dirtiest of clothes because of the micro cleaning system in the product.

2.Positioning by price/ quality: One way they do it is with ads that reflect the image of a high_ quality brand where cost, while n not irrelevant, is considered secondary to the quality benefits derived from using the brand. The Wheel detergent or Rin soap which always focuses on the value addition and price. 3.Positioning by use or application: Another way is to communicate a specific image or position for a brand is to associate it with a specific use or application. Surf Excel is positioned as stain remover Surf Excel hai na!

4. Positioning by product class: Often the competition for a particular product comes from outside the product class. The product is positioned against others that, while not exactly the same, provide the same class of benefits. Dove is positioned as a moisturizer, not a soap. 5. Positioning by product user: Positioning a product by associating it with a particular user or group of users is yet another approach Motorola Mobile Ad , Facebook.

6. Positioning by competitor: Competitors may be as important to positioning strategy as a firms own product or services. This approach is similar to positioning by product class, although in this case the competition is within the same product category. Moov compares itself with Iodex. 7.Positioning by cultural symbols: An additional positioning strategy where I the cultural symbols are used to differentiate the brands. Humara Bajaj, Tata Tea symbols has successfully differentiated the product it represents from competitors.

Steps to Choosing and Implementing a Positioning Strategy

Step 1. Identifying a set of possible competitive advantages:

Competitive Differentiation.
Step 2. Selecting the right competitive advantage. Step 3. Effectively communicating and delivering the chosen

position to the market.

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