Identifying Market

Segments and Targets

8-2
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.
8-3
Four Levels of Micromarketing
Segments
Niches
Local areas
Individuals
8-4
Segment Marketing
Targeting a group of customers
who share a similar set of
needs and wants.
8-5
Flexible Marketing Offerings

Naked solution
Product and
service elements
that all segment
members value

Discretionary options
Some segment
members value
Options may carry
additional charges
8-6
The Experience Economy
Experience
Services
Goods
Commodity
8-7
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.
8-8
Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral
8-9
Market Segmentation
Occupation
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Geographic Segmentation
Climate
Density of area
City Size
Region Karnataka, Punjab, Haryana, Rajasthan
Major metropolitan areas, small cities, towns
Urban, suburban, exurban, rural
Temperate, hot, humid, rainy
Demographic Segmentation
Income
Marital status
Sex
Age Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+
Male, female
Single, married, divorced, living together, widowed
Under $25,000, $25,000-$34,999, $35,000-$49,999,
$50,000-$74,999, $75,000-$99,999, $100,000 and over
Education Some high school, high school graduate, some college,
college graduate, postgraduate
Professional, blue-collar, white-collar, agricultural,
military
8-10

SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Psychological Segmentation
Learning-involvement
Perception
Personality
Needs-motivation Shelter, safety, security, affection, sense of self-worth
Extroverts, novelty seeker, aggressive
Low-risk, moderate-risk, high-risk
Low-involvement, high-involvement
Psychographic
Subcultures (Race/ethnic)
Religion
Cultures
(Lifestyle) Segmentation Economy-minded, couch potatoes, outdoors enthusiasts,
status seekers
American, Italian,Indian, Chinese, Mexican, French,
Pakistani
Catholic, Protestant, Jewish,Hindu, Muslim, other
African-American, Caucasian, Asian, Hispanic
Family life cycle
Social class Lower, middle, upper
Bachelors, young married, full nesters, empty nesters
Attitudes Positive attitude, negative attitude
Sociocultural Segmentation
8-11
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Use-Related Segmentation
Brand loyalty
Awareness status
Usage rate Heavy users, medium users, light users, non users
Unaware, aware, interested, enthusiastic
None, some, strong
Use-Situation Segmentation
Location
Objective
Time Leisure, work, rush, morning, night
Personal, gift, snack, fun, achievement
Home, work, friends home, in-store
Person Self, family members, friends, boss, peers
Benefit Segmentation Convenience, social acceptance, long lasting, economy,
value-for-the-money
Geodemographics Based on geography and demography
Demographic/
Psychographics
Combination of demographic and psychographic profiles
of consumer segments profiles
SRI VALS
TM
Actualizer, fulfilled, believer, achiever, striver,
experiencer, maker, struggler
Hybrid Segmentation
8-12
Psychographic Segmentation
VALS
Four groups with higher resources
Innovators- Successful, sophisticated, active, take
charge people with high self esteem.
Thinkers-Mature, satisfied and reflective people who
are motivated by ideals and value order, knowledge,
and responsibility.
Achievers-Successful goal-oriented people who focus
on career and family.
Experiencers- Young, enthusiastic, impulsive people
who seek variety and excitement.
8-13
Four groups with lower resources
Believers Conservative, Conventional, and
traditional people with concrete beliefs.
Strivers -Trendy and fun loving people who are
resource constrained.
Makers Practical, down-to-earth, self sufficient
people who like to work with their hands.
Survivors Elderly passive people who are
concerned about change.

(www.sric-bi.com)

Psychographic Segmentation
8-14
Behavioral Segmentation
Decision Roles
Initiator
Influencer
Decider
Buyer
User
Behavioral Variables
Occasions
Benefits
User Status
Usage Rate
Buyer-Readiness
Loyalty Status
Attitude
8-15
Steps in Segmentation Process
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Marketing mix strategy

8-16
Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable
8-17
DISCUSSION
Is Mass Marketing dead?
8-18
DISCUSSION
Think of various product categories. How would
you classify yourself in terms of the various
segmentation schemes? How would marketing
be more or less effective for you depending on
the segment involved? How would you contrast
demographic versus behavioral segment
schemes? Which ones do you think would be
most effective for marketers trying to sell to you?
8-19
HSBC
HSBC is known as worlds local bank.
Established in 1865 to finance the trade
between China and the United Kingdom.
Second largest bank in the world.
Serves 100 million customers through
9,500 branches in 79 countries.
8-20
HSBC
The company is organised by business
line:
Personal financial services
Consumer finance
Commercial banking
Corporate investment banking and markets
Private banking
8-21
HSBC
HSBC is organized by the geographic
segment:
Asia-Pacific
UK/Eurozone
North America/NAFTA
South America
Middle East

8-22
HSBC
Sir John Bond in November 2003:
Our position as the worlds local bank enables
us to approach each country uniquely,
blending local knowledge with a world wide
operating platform.
8-23
HSBC in New York
HSBC held a New York Citys most
knowledgeable Cabbie contest. The
winning cabbie gets paid to drive full time
for HSBC for the year and HSBCs
customers win too. And they get a free
ride in the HSBC branded Bankcab.
8-24
HSBC in Hong Kong
During the Severe Acute Respiratory
Syndrome(SARS) outbreak, HSBC
launched a program to revitalise the local
economy.
8-25
HSBCs niche marketing venture
Proides Pet Insurance which in 2003 was
growing at the rate of 125% per year.

Dealing with Competition
8-27
Five Forces Determining Segment Structural
Attractiveness
Potential entrants
Suppliers
Buyers
Industry competitors
Substitutes
8-28
Industry Concept of Competition
Number of sellers and degree of
differentiation
Entry, mobility, and exit barriers
Cost structure
Degree of vertical integration
Degree of globalization
8-29
Industry Concept of Competition
Pure monopoly
Oligopoly
Monopolistic competition
Pure competition
8-30
Analyzing Competitors
Share of market
Share of mind
Share of heart
8-31
Expanding the Total Market
New customers
More usage
8-32
Six Types of
Defense Strategies
Defender
Flank
Preemptive
Counteroffensive
Mobile
Contraction

8-33
Other Competitive Strategies
Market challengers
Market followers
Market nichers
8-34
Market Challenger Strategies
Define the strategic objective and
opponents
Choose a general attack strategy
Choose a specific attack strategy
8-35
General Attack Strategies
Frontal attack
Flank attack
Encirclement attack
Bypass attack
Guerrilla warfare
8-36
Specific Attack Strategies
Price discounts
Lower-priced goods
Value-priced goods
Prestige goods
Product proliferation
Product innovation
Improved services
Distribution innovation
Manufacturing-cost
reduction
Intensive advertising
promotion
8-37
Market Follower Strategies
Counterfeiter
Cloner
Imitator
Adaptor
8-38
EXERCISE
Pick an industry. Classify firms according
to the four different roles they might play:
leader, challenger, follower and nicher.
How would you characterize the nature of
competition? Do the firms follow the
principles described above?
8-39
ACCENTURE
Stareted as the consulting arm of the
accounting firm Arthur Andersen.
They were called Administrative
Accouting Group and then became
Management Information Consulting
Division.
8-40
ACCENTURE
In 1989, Andersen Consulting separated
from Arthur Andersen in order to position
itself against its IT services competitors. At
the time Andersen Consulting already
doing a $1 billion a year in business, but it
was mistakenly associated with
accounting.
8-41
ACCENTURE
The IT consulting marketplace was
crowded with competitors ranging from
nuts-and-bolts hardware/software
providers like IBM to leading strategy firms
like Mckinsey and Boston Consulting
Group.
Came out with an advertising campaign.
8-42
ACCENTURE
In 2000, following arbitration against its
former parent, Andersen Consulting was
granted full independence. It had three
months to find, implement, and introduce
the world to a new corporate name. This
effort went on to become one of the
largest and most successful re-branding
campaigns in corporate history.
8-43
ACCENTURE
A consultant from the Oslo office coined
the Accenture name because it rhymed
with adventure and connoted an accent
on the future. The name emerged as the
winner because it was catchy and
distinctive and embodied bold growth and
innovation.
8-44
ACCENTURE
In 2002, Accenture launched the Innovation
Delivered campaign to distinguish itself from the
commpetition. Competitors in the IT arena, such
as IBM lacked broader business consulting
expertise and werent seen as knowledgeable in
business strategies and processes. They tended
the firms from the IT level. Competitors like
McKinsey had brand strength associated with
strategic thinking.
8-45
ACCENTURE
Accenture saw its differentiator as the
ability to provide both innovative ideas and
execute them too.
Unless you can provide both
transformational consulting and
outsourcing capability, you are not going
to win
8-46
ACCENTURE
Innovation Delivered campaign. from
innovation to execution, Accenture helps
accelerate your vision.
8-47
ACCENTURE
In 2002, the climate changed, after the
dot-com crash and the economic
downturn, innovation was no longer
enough. High performance Delivered
campaign with Tiger Woods as the
spokesperson.