Factors Affecting Market Segmentation

1)Nature of demand
• A commodity having wide demand the extent and size of the market will be
large and contrary to it the size and extent of the market will be Limited.
For example, Silver, Gold, sugar, and food-grains have a wide market while the
demand for bangles, Gandhian cap, and Nehru jacket are limited to India only.
2)Durability
• Perishable goods like vegetables, eggs, milk, bread, and butter have a limited
market while durable goods namely T.V., radio, vehicles, gold, silver have a
wide market.
3)Banking and Financial System
• In a country where there is well developed organized money credit, banking
and financial system are in existence the market is widened because payments
are quickly finalized. On the other hand, if the banking and financial system is
not well developed and organized the markets Limited.
4)Recognizability
• A commodity is easily known on the basis of its quality by the consumers it will be
demanded more and the size of the market is widened while in the absence of
recognizability of a product buyers will not demand more and market will be Limited.

5)Sampling and Grading of Goods

• Those goods which are bought and sold on the basis of the samples and grading the
market will be wide while the goods not sold on the basis of samples and grading have
a limited market.
• Woollen clothes, food-grains, raw cotton etc. have a Wide market.

6)Adequate Supply
• The goods and services having a flexible supply market will be widened and the goods
having inadequate supply will have a limited market.

7)Substitutes
• A commodity having substitutes in the market will have a limited market while no
substitute commodity will be widely used and the size and extent of the market are
widened.
8)Availability of Means of Communication and Transport
• In a country where there are cheap, quick, and adequate means of
communication and transport available the goods are transferred from one
part of the country to another and the market is widened.
• Contrary to it the market is limited because goods cannot be transferred
from one place to another.
Bases of Market Segmentation
 Levels of Market Segmentation
• Three Levels of market Segmentation-
1)Niche Marketing- A niche is more narrowly defined group, seeking
a distinctive mix of benefits. Marketers usually identify niches by
dividing a segment into sub-segments
• For eg the segment of heavy smokers includes two niche that is
those who are trying to stop smoking.
• And those who do not care, that is those who are heavy smokers.
2)Local Marketing’-In this target marketing is leading to marketing
programmes tailored to the needs and wants of local customer
groups.
3)Individual customer marketing- The ultimate level of segmentation
leads to customized marketing or one to one marketing,as every
individual has unique set of wants and prefrences. For eg tailor,
shoe maker .
 Different strategies of Market Segmentation
1) Undifferentiated Marketing Strategies/ Mass Marketing
• Here the marketer or seller is providing or offering similar type of product to
the whole market with similar type of marketing mix.
• For eg5 market for sugar , food grains

2) Diffrentiated Marketing Strategy- Here the marketer or seller is dividing the

market into many segments and different products are offered to the different
segments, according to the needs and wants of the customers and marketing
mix are adopted accordingly. For eg shoe market ‘- shoes for executives,
shoes for sportsmen, shoes for students.
3)Concentrated Market Strategy- Here the marketer is concentrated on
some selected segments of the market and 4 p’s are adopted accordingly. For
eg Rolex watches concentrated on luxury segment.
 Market Targeting
• Market targeting is the process of formulating market coverage
policies. In this stage the firm has to evaluate the various
segments and their structural alternatives. And then decide how
much and which ones to target.Target Marketing process involves
the following steps.
1)Evaluating Market Segment’- Once the segments have been
framed , marketing manager has to evaluate th6e profit
contribution expected from each segment.For this the firm has to
involve in the following decisions.
• Forecasting segment Potential to know segment size and growth
• Analyzing competitors position to know segment structural
alternatives
• 2) Selecting Target market -After Segment have been
evaluated on the basis of Segment potential , competitors position
and potential goal and objectives achievement ,the marketer is
ready to select the segment that will be the target market.
Strategies of Market Targeting
• 1) Selective Specialization- In this a firm selects a number of
segments , each segment is attractive and appropriate . There may
be little or no synergy between segments but each segment
promises to be a money maker . This Strategy has the advantage
of diversifying the firms risk.
• 2)Product Specialization’- In this strategy the firm concentrates on
making a certain product that it sells to several segments for
eg.HCL sells computers to Govt Institutions , Educational
Institutions, Private small offices etc. Through this strategy the firm
builts up a strong reputation in the specific product area.
• 3)Market Specialization -
• In this strategy the firm concentrates on serving many needs of a
particular customer group .
• For eg some manufacturers market their product to same type of
customers as supply to govt departments only .
• Full Market Coverage- in this marketer tries to satisy the entire
market for eg to all group of customers like cocacola.
 Product Positioning
• Positioning is the process of distinguishing a brands from
its competitors so that it becomes the preferred brand
in defined segments of the market.
• Acc to Philip Kotler “ Positioning is the act of designing
the company’s offer and image so that it occupies a
distinct and valued place in the target customer’s mind.
• For eg Rexona Deodrant ( won’t let you down)
positioned itself as deodrant for body odour .
 Importance /objectives of Positioning
• Product Differentiation- Positioning helps to create
differentiation on certain basis between the two brands.
• To face competition-product positioning helps in to face
competition successfully in the market by making better position
in the mind of the customers in comparison to their competitors.
• To make favourable brand image- by targeting the minds of
customers successfully it is possible for the firm to make their
favourable brand image and hence increases brand loyalty.
• To increase in Sales –By making favourable image in the mind of
customers it is possible for the company to increase their sales.
• To increase in Goodwill- by making positive image in the minds of
the customers image of company will also increase.
 Types of Positioning
1.Benefit Positioning –here the marketer positioned its products and services
towards specific benefits that the user will get after using the product. For eg
Honda has positioned in terms of economy , reliability.
2.Attribute positioning- The positioning is done through listing various attributes
which the product / service posess. For eg mobile phones,
3.Use/Application Positioning- It is another way to communicate a specific image
or position for a brand . It positions the brand towards th6e specific use. For eg
Nestle Maggi 2 minutes noodles, positioned as a snack item,” Healthy bhi
taste bhi”.
4.User Positioning- Positioning a product by associating it with a particular user or
group of users is yet another approach utilised by marketers. For eg
photocopier manufacturers have started directing their machines to special
group of users like engineers and architects,
5. Comparitive positioning –In compararitive Positioning competitors may be as
important to the positioning strategy as a firm owns product or services for
eg. Competitive positioning is about defining how you'll “differentiate” your
offering and create value for your market. It's about carving out a spot in
the competitive landscape, putting your stake in the ground, and winning
mindshare in the marketplace – being known for a certain “something.”
Toyota vs. Tesla. Tesla entered the electric vehicle market with a luxury sports
model, rapidly sidestepping economy cars like the Toyota Prius. Tesla actually
targeted the high-end market with the Model S.
6. Product category class positioning’- This category calls for association of the
product to distinct product class. This is effective wh6en introducing a new
product .
For eg Maruti Omni positioned it as a family car rather than a commercial car.
7.Quality/ price positioning’-Marketers often use quality / Price characteristics to
position their brands one way .
For eg Nirma positioning
8. User and Lifestyle Positioning’-By positioning itself as a lifestyle brand, a
brand tries to sell an image and identity rather than the product. The main
focus is to associate the brand with a lifestyle and focus is more on the
aspirational value than the product value. Cigarette, Alcohol, and Tabacco
companies are often seen to use lifestyle positioning while marketing their
products.
9. Positioning by Reference Groups- the importance of reference group
even in purchase decision has been accepted as a tool for product positioning.
For eg indian market has been involved in extensive use of sports
personality and film stars in the advertisement of many products of personal
use
 Factors affecting Product Positioning
• Company Image’- A product comes from a company and every company has
its own history . The stronger the image and profile of the company the better
the image of its products for eg a consumer may percieve a better image of a
product , if it comes from a reputed company such as Tata, Reliance
• Product Related Features’- The product is one of the centre point of
positioning strategy. All the product features are to be communicated well to
diffrentiate the product. Vico Turmeric Positioned itself in the minds of the
customer as the cream having haldi, turmeric, chandan constituents.
• Consumer Related Factors’-Positioning is based on consumer perceptions
rather than factual evaluations.hence it becomes necessary to examine how
the consumers view the product. It includes their perception, attitude,
personality , behaviour etc.
• Competition Related Factors’-Product Positioning is done in relation to various
competitive offerings .in most of the cases consumers have got a tendency to
judge a product in comparision to the dominant brand
• BRAND
• According to American Marketing Association, “Brand is a name,
term, sign, symbol, or design, or a combination of them which is
intended to identify the goods or services of one seller or a group
of sellers and to differentiate them from those of competitors.”
Brands can be classified as follows:
• 1. According to Ownership:
Here, ownership determines the type of brand.
• Based on ownership there are two brands which are as follows:
i. Manufacturer’s Brand – When the name of the manufacturer of the
product is used for branding the product, it is called
manufacturer’s brand. For example, using name of Samsung for
branding its products like smartphones, TV, AC etc.
ii. Middlemen’s Brand – In this type of branding, instead of the
manufacturer it is the middlemen whose name is used as brand.
The middlemen may be wholesalers, retailers, etc. For example,
wholesale stores such as Wal-Mart, Best Price, Metro, Big Bazar ,
easy day etc.
According to the Market Area:
• Based on target market area there are 5 types of brands.
• i. Local Brand – In this, the brands are decided keeping the local markets in mind.
Thus, there are different local brands for different markets.
• ii. Provincial Brand – In this, the brand name is decided for a particular State or
province. Therefore, for a single product, different brand names exist in different
provinces.
• iii. Regional Brand – In this, the brand name is for a particular region. Different
regions will thus have different brand names. The entire country may be divided
into regions like North, South, East, West, Central, etc. for eg balaji and gopal in
snacks , nandini in milk
• iv. National Brand – When a particular product is available with the same brand
name throughout the country, it is referred as national brand. The product is only
being nationally distributed and marketed National brand also can differ from the
local brand or regional brand. For eg vadilal , dabur, parle G
• v. International/Global Brand – When a particular product is available with the
same brand name throughout the world, it is known as international brand.
Nowadays there are many of the global brands that are sold in international
markets. For example, Coca Cola, Starbucks, apple, McDonald’s, Sony etc. These
brands are selling the similar product in the international market (different
countries).
• 3. According to the Number of Products:
• On this basis brands can be of following three types
• Family Brand – When all the products of a company are marketed with the
same brand name in different market segments, it is called family brand. For
example, the Reliance Group uses its parent name to brand various product
lines like Reliance Petro­chemicals, Reliance Communications, Reliance Retail,
etc.( amul ‘- amul milk, amul butter, amul cream)
• ii. Product Line Brand – When a company decides to give different names to
different product lines then it follows product line branding. For example,
Hindustan Unilever uses this strategy to brand its various product lines like
soaps, beverages, detergents, etc.
• iii. Individual Brand – When the company uses different names for the products
in the same product line, it is called individual branding strategy. For example,
different individual brands of soaps are used by HUL like Lifebuoy, Rexona, and
Vivel etc
• Procter& Gamble’- Head &Shoulder, Pantene etc
• Main features of a good brand name:
• It must be Easy to Pronounce and Remember
• It should be Short and Sweet, Bombay Dyeing, Bata, Tata, etc.
• It should be Original
• It should Reflect Product Dimensions ,For instance EZEE of Godrej Company is
really easy to use for better results; another brand GOOD­NIGHT of a mosquito
repellant pad implies the user says ‘good­night’ to mosquitoes as he is going
have good and sound sleep at least eight-hours.
• Brands are made up of following elements
• Logo – is the visual trademark that identifies the brand. For eg Apple
• Name – name is the other element of the company. Every business must have a
name and two companies cannot have the same name
• Tagline or Catchphrase – all marketers try to keep a tagline that becomes a
symbol of recognition for the product, For example “thanda mane coca-cola”
• Sounds – A unique tune or set of notes can denote a brand. For example-IDEA
had kept the song and sound – “you are my pumpkin, pumpkin, you are my
honey bunny”, which became very popular tune.
• graphics
• What is Brand Equity?
• Brand equity is a marketing term that refers to the total value of
the brand as a distinct asset. It can be rendered as the aggregate
of assets and liabilities that are associated with the brand name
and symbol which brings about the relationship customers tend to
create with the brand. Brand equity is reflected in a way how
consumers think, feel, and act towards a particular brand.
• Components of Brand Equity
• Brand Awareness
• The first step of the brand building process is creating awareness of the
brand name in the mind of consumers. This means that customers are aware of
the brand and able to associate it with a particular category
• Brand Association
• Brand association is anything that a customer relates to their preferred brand.
Getting in interaction with brands allows such associations. Having a good
brand association is important as it leads to repetitive sales and provides the
business word of mouth marketing.
• Brand Experience
• This is the aggregation of customer experience with the overall brand. When
customers have the good brand experience they will consider the brand as
superior and will start preferring it over others.
• Perceived Quality
• Fulfilling brand promise is the key to strong brand equity. Customer tends to
assess brands with other similar brands on the basis of various quantitative
and qualitative parameters. Quality perception also impacts the pricing
decision of a company. If a company produce quality products, it can avail the
luxury of premium pricing.
• Brand Loyalty
• Brand loyalty is the preference of a brand by the customer over similar
products in the market. This results in repetitive sales and is the best way to
spread word of mouth. If a company has a higher brand loyalty, it can help to
reduce marketing cost.
• Brand Preference
• This is another component of brand equity and can charge additionally for the
same product. However, this requires organizations to assure that customers
have good experiences and associations with the brand.