Pres MK MN

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    Philip KOTLER TRADITIONAL viewon Market Segmentation

    To satisfy effectively customer needs, companiesneed to identify the market segments they canserve, they cannot connect with all customers

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    BASES OF MARKETSEGMENTATION

    1. Geographic Segmentation: divide market intogeographic units like nation, regions, cities and payattention to local variation

    2. Demographic characteristics: age, occupation,gender, income

    3. Psychographic: personality, values, lifestyle

    4. Behavioural: consumer knowledge and attitudetowards a product

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    Behavioral Segmentation

    Aware

    Ever tried

    Recent trial

    Occasional user

    Regular user

    Most often used

    Brand variation Brand loyalty

    Switchers

    Shifting loyals

    Split loyals

    Hard-core

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    EFFECTIVE SEGMENTATIONCRITERIA

    Size, purc

    hasing power, profilesof segments can be measured.

    Segments must be effectively

    reached and served. Segments must be large orprofitable enough to serve.

    Mea

    Ac

    ce

    ss

    i

    Su

    bst

    ant

    Dif

    fer

    en

    Ac

    tiona

    Segments must responddifferently to different marketing mixelements & actions. Must be able to attract and serve thesegments.

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    LIMITATIONS

    Targeting multiplesegments canincrease marketingcost

    Limits generalpopularity for aproduct

    Increased costs todevelop variations ofthe product

    Benefits

    Products offered fit morewith customer specificneeds

    Company can offer betterdesign, price, disclose and

    deliver the product orservice

    Company can use moreefficient marketingresources

    Company can betterunderstand thecompetitive environment

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    Rachel Kennedy and Andrew Ehrenberg (2001): There is BrandSegmentation!

    Different brands appeal to different people: => Countlesssegmentation studies=> Research and marketing expenses=> Marketers encouraged ?=> Company limited to small niche

    ButSimilar brands to appeal to similar people !

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    Competitive brands : are bought by very similar client basesbrand level segmentation is slight or non-

    existent

    Rachel Kennedy andAndrew Ehrenberg

    Research :

    Based on BMRB InternationalsTGI

    For 42 varied Industries in UK TGI continuous self completion

    survey, TGI-based on 25000 adults

    annually

    Respondents

    state :

    Buy /use /serve thecategory?

    How often? Which specific brands?

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    Theresults :

    Individual brands percentagedeviation = 2-3%

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    Theresults :

    The average MAD for all demographicmedia :

    Pinpoints the lack of deviation between

    brands !

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    Advantages:

    No restriction to a specific market No limitation to a small niche

    Sales increase No market segmentation research

    expensesDisadvantages :

    Large mass market => more direct

    competitors Competitive products are usuallysubstitutable

    More important Logistics than productitself

    NOSegmentation

    Whats next? Marketers still need to publicise and sell

    their brand Marketers can help a brand to stand out

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