Market Segmentation

Segment acc to the tastes of people – veg n non veg/religion
Acc to the price/income
People living alone
College students
Age
Lifestyle health conscious healthy snacks less fat
A frequently used distinction in this respect is between 'upmarket' and 'downmarket' customers e.g.
between customers such as students who want to buy the cheapest available coffee pot, and those that
want an expensive and stylish coffee pot as a 'life style symbol'.
Acc to the use such as hotels and homes
Tailoring the product as per specific preferences




























Market segmentation

1. Market segmentation is a marketing strategy that involves dividing a broad target market into
subsets of consumers who have common needs and priorities, and then designing and
implementing strategies to target them. Market segmentation strategies may be used to identify
the target customers, and provide supporting data for positioning to achieve a marketing plan
objective. Businesses may develop product differentiation strategies, or an undifferentiated
approach, involving specific products or product lines depending on the specific demand and
attributes of the target segment.
2. Segmentation means to divide the marketplace into parts, or segments, which are definable,
accessible, actionable, and profitable and have a growth potential. In other words, a company
would find it impossible to target the entire market, because of time, cost and effort restrictions.

Once such a mass is identified, it has to be checked that this mass can actually be targeted with the
resources at hand, or the segment should be accessible to the company. Beyond this, will the
segment respond to marketing actions by the company (ads, prices, schemes, promos) or, is it
actionable by the company? After this check, even though the product and the target are clear, is it
profitable to sell to them? Is the number and value of the segment going to grow, such that the
product also grows in sales and profits?
It needs to have a 'definable' segment - a mass of people who can be identified and targeted with
reasonable effort, cost and time.














Levels Of Marketing.
MASS MARKETING
In mass marketing, the seller engages in the mass production, mass distribution, and mass promotion of one
product for all buyers. A small business relies on a mass-marketing strategy to direct a single marketing
message to all potential customers in a target market regardless of the buyer's specific needs or preferences,
which might otherwise serve to segment the market.
Henry Ford epitomized this marketing strategy when he offered the Model-T Ford to all buyers; they could have
the car “in any color as long as it is black.” Coca-Cola also practiced mass marketing for many years when it
sold only one size Coke in a 6.5-ounce bottle.
The proliferation of advertising media and distribution channels is making it difficult to practice “one size fits all”
marketing. No wonder some have claimed that mass marketing is dying. Not surprisingly, many companies are
retreating from mass marketing and turning to micromarketing at one of four levels.























SEGMENT MARKETING
A company might also increase sales by first identifying market segments within a broader target market, each
of which consists of potential customers whose unique wants and needs can be satisfied by a particular product.
In addition, the company develops a product differentiation strategy for each segment, which illustrates a
product's unique features, to attract customers within a market segment.
The company then creates a marketing campaign to appeal to each individual segment.
Each segment and product differentiation strategy is unique in terms of customer needs or preferences.
A company that practices segment marketing recognizes that buyers differ in their wants, purchasing power,
geographical locations, buying attitudes, and buying habits. At the same time, though, the company is not willing
to customize its offer/communication bundle to each individual customer. The company instead tries to isolate
some broad segments that make up a market.
For example, an auto company may identify four broad segments: car buyers seeking basic transportation,
those seeking high performance, those seeking luxury, and those seeking safety.
Thus segmentation is a midpoint between mass marketing and individual marketing. The consumers belonging
to a segment are assumed to be quite similar in their wants and needs. Yet they are not identical. Some
segment members will want additional features and benefits not included in the offer, while others would gladly
give up something that they don’t want very much. Thus segment marketing is not as precise as individual
marketing but is much more precise than mass marketing.
Segment marketing offers several benefits over mass marketing. The company can create a more fine-tuned
product/service offer and price it appropriately for the target audience. The choice of distribution channels and
communications channels becomes much easier. And the company may face fewer competitors if fewer
competitors are focusing on this market segment.
For example, a company might produce one clothing line that satisfies the needs of female teens and another to
appeal to senior women.


















NICHE MARKETING
The needs and requirements of potential customers might not be completely met by the goods and services
currently delivered to a market segment. In this case, a company might create a niche market and develop
highly specialized products or services to meet the customers’ needs that aren't being met by other offerings.

For example, sports channels like STAR Sports, ESPN,STAR Cricket, and Fox Sports target a niche of sports
enthusiasts

Marketers usually identify niches by dividing a segment into subsegments or by defining a group with a
distinctive set of traits who may seek a special combination of benefits.

Hewlett-Packard has all-in-one machines for printing, scanning and faxing targeted for the home office niche
while at the same time having separate machines with one of these functions for big businesses.

Some larger companies have turned to niche marketing, which has required more decentralization and some
changes in the way they do business. For example, Johnson & Johnson consists of 170 affiliates (business
units), most of which pursue niche markets.
Niche marketers presumably understand their niches’ needs so well that their customers willingly pay a price
premium. For example, Ferrari gets a high price for its cars because its loyal buyers feel that no other
automobile comes close to offering the product-service-membership benefit bundle that Ferrari does.
An attractive niche is characterized as follows: The customers in the niche have a distinct and complete set of
needs; they will pay a premium to the firm best satisfying their needs; the “nicher” has the required skills to serve
the niche in a superior fashion; the nicher gains certain economies through specialization; the niche is not likely
to attract other competitor or the nicher can depend on itself; and the niche has sufficient size, profit, and growth
potential.

For example, a set of potential customers in a particular market segment may be unable to purchase highly
specialized mountain bikes from the companies that market bikes in a particular geographical area. In turn, a
company located in this geographical area may lack the resources to market all the mountain bikes, road and
triathlon bikes and hybrid bikes to this market segment that are offered by other companies that sell to the
market segment. However, the business might be very successful in creating a niche market by marketing only
highly specialized mountain bikes to potential customers within the existing market segment whose needs aren't
met by other companies.










LOCAL MARKETING
Target marketing is increasingly taking on the character of regional and local marketing, with marketing
programs being tailored to the needs and wants of local customer groups (trading areas, neighbourhoods, even
individual stores).
Promotional messages are directed to the local population, rather than the mass market.
Local marketing is used primarily by small businesses—stores and restaurants with a single location or outlet.
Owners of franchised businesses may also employ local marketing to promote their specific locations,
supplementing the larger franchise’s regional or national marketing campaigns (which promote the franchise’s
name and products, but not specific locations).

People like to shop and eat near their homes; it saves time and is more convenient. Residents create their own
“mental maps” of the surrounding area, with favorite restaurants and particular stores quickly and easily
remembered. They develop shopping and eating habits based upon these maps, engaging in a great deal of
repeat business.

Yet at the same time, new businesses are always moving in (and other businesses are closing), so these maps
are constantly updated. Therefore, any store or restaurant—and particularly new ones—has to work to advertise
its presence even in its own surrounding neighborhood, in order to get onto these mental maps.

Businesses in different neighborhoods will apply local marketing tactics to different consumer segments, as
identified by socio-economic standing, demographic composition, and purchasing values.

INDIVIDUAL MARKETING
The ultimate level of segmentation leads to “segments of one,” “customized marketing,” or “one-to-one
marketing.” The prevalence of mass marketing has obscured the fact that for centuries consumers were served
as individuals: The clothier tailor-made the suit, the cobbler designed shoes for the individual, and so on.

It is the new technologies—specifically computers, databases, robotic production, and instant communication
media such as e-mail and fax—that are permitting companies to consider a return to customized marketing, or
what is called “mass customization.” Mass customization is the ability to prepare on a mass basis individually
designed products and communications to meet each customer’s requirements.

Example: Dell has done very impressive work in individual marketing by offering the customers the freedom to
design and configure their product.









Criteria for segmenting
An ideal market segment meets all of the following criteria:
 It must be large enough to earn profit..
 It is possible to measure.
 It must be stable enough that it does not vanish after some time.
 It is possible to reach potential customers via the organization's promotion and distribution channel.
 It is internally homogeneous (potential customers in the same segment prefer the same product qualities).
 It is externally heterogeneous (potential customers from different segments have different quality
preferences).
 It responds consistently to a given market stimulus.
 It can be reached by market intervention in a cost-effective manner.
 It is useful in deciding on the marketing mix.
 It identifies the target customer(s) (surrogate(s))
 It provides supporting data for a market positioning or sales approach.




























Advantages and Benefits of Market Segmentation
Following are some of the benefits as cited in leading marketing books.
1. Customer needs
It is easier to understand the exact needs of the customer and target the marketing strategy at a
particular group. It is much easier and more successful to create and promote specific and customised
products and services.
2. Profit Potential
Mass marketing is a strategy of the past. Target marketing and positioning creates new potential
customers and new ideas for new products and services. Companies can create better products and
hence maximise their potential profit.
3. Growth
Segmenting the markets creates further opportunities for business growth. Specific groups require
specific products.
4. Retaining Customer
It is a great way to retain customers. Firms can establish a life-long relationship with their consumers
via formulating an effective market segmenting strategy.
5. Right Target Market
The company's resources are utilized for producing the right product for the right customer.
6. Market Share
Segmenting business and consumer markets is important to maintain existing market share and
expand it. A successful company needs to gain competitive advantage by looking closely at the
specific needs of customers and devising strategies to provide maximum benefit and value.






Pre cooked food
precooked food has been cooked or partly cooked so that it can beheated and eaten at a later time
to cook (food) partly or completely beforehand, so that it may becooked or warmed and
served quickly at a later time.
Mccain
Maggi
Knorr soup
Mtr south Indian
Oats
Frozen pizza
3 min idli












Frozen food target marketing
Our aim is to develop a range of products to cater for a diverse target audience.
Our Healthy Choice® range is predominantly targeted towards
women aged between 25-40 who are concerned with their saturated fat and cholesterol intake
Our potato specialties, such as Curly Fries and Smiles, are targeted towards kids snacking and
Our seasoned fries and wedges are ideal for adult snacking.

1.SuperFries (including Sweet Potato SuperFries)
2.Healthy Choice®
3.Beer Batter
4.Seasoned Fries (Crunchy Wedges & Fries)
5.Mini Roast
6.Potato Specialties (Hash Browns, Nuggets, Curly Fries)
7.Purely Potato

For example, microwaveable snacks take account of changing lifestyles, where people are looking
for food that does not take long to prepare. McCain has also been responsive to market needs for
healthier options and its products support the government”s Change4life campaign. This
encourages people to 'Eat Well, Move More, Live Longer'.

At one end there were brand resistors, at the other brand advocates. Resistors divided into two broad
camps: those that were resistant to the frozen potato products category in general, and those who
were consumers of the product but were resistant to the brand on the basis of price (or perceived
price) differences and were likely to opt for supermarket own-brand rather than branded products.
In fact, localisation is a cornerstone of McCain’s India strategy. We continuously work with our customers and keep track of the
evolving trends and based on the assessed requirements, we attempt to develop customised products and solutions. This is done
by our research and development arm which is continuously engaged in trials of new product offerings in the market.


Our priority is B2B segment which pushes the retail sale trend. Hence, we are critically looking at the
institutional segment which gives birth to food trends with eyes on hospitality and retail.” Since
hospitality also offers retail opportunities therefore, McCain Foods is continuously launching new
innovative potato based frozen products that immediately attracts the attention of this segment. He
said, “There are numerous limitations for hospitality sector in the kitchen. Hence, our products are apt
to address concerns of banquets, caterers, party organisers, canteens and QSRs. The frozen products
offer value addition for chefs whereby their efforts could be used in the front-end of kitchen rather
than wasting them in non creative work.” The company is aggressively marketing its frozen products to
hotels and restaurants like french fries, meal combo, aloo tikki, cheese bites, chilli garlic potato pops,
savoury wedges, sweet corn nuggets, tandoori veg nuggets, veg burger patty, and so on with multiple
serving options.












Knorr
Geographic segmentation
High end Product
Tier I and Tier II cities
Targeting Lower Income Group (Now)
Demographic Segmentation
Gender: Female/ chief wage earner(Buyer),
Teenagers (Consumer)
Age: 28-40 Years(Buyer), 8-17 Years(Consumer)
Family Size: Above 3 (Nuclear Family)
Occupation: Working Women & Housewives
Behavioural Segmentation
Occasion: 7 PM, Pre Dinner Meal
Lifestyle: Morden Lifestyle
Benefits Sought: Indian Mothers- Healthy, Ready to cook pre dinner snack
Children & Teenagers: Need tasty, trendy to eat