Marketing and Business Elements

Archive for the ‘Marketing Segmentation’ Category

Market segmenting is dividing the market into groups of individual markets with similar wants or needs that a company divides into distinct groups which have distinct needs, wants, behavior or which might want different products & services. Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private. Although industrial market segmentation is quite different from consumer market segmentation, both have similar objectives. All of these methods of segmentation are merely proxies for true segments, which don’t always fit into convenient demographic boundaries.

Consumer-based market segmentation can be performed on a product specific basis, to provide a close match between specific products and individuals. However, a number of generic market segment systems also exist, e.g. the system provides a broad segmentation of the population of the United States based on the statistical analysis of household and demographics data.

The process of segmentation is distinct from positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers; to prioritize the groups to address; to understand their behavior; and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment. Revenues are thus improved.

Improved segmentation can lead to significantly improved marketing effectiveness. Distinct segments can have different industry structures and thus have higher or lower attractiveness

Once a market segment has been identified (via segmentation), and targeted (in which the viability of servicing the market intended), the segment is then subject to positioning. Positioning involves ascertaining how a product or a company is perceived in the minds of consumers.

This part of the segmentation process consists of drawing up a perceptual map, which highlights rival goods within one’s industry according to perceived quality and price. After the perceptual map has been devised, a firm would consider the marketing communications mix best suited to the product in question.

Bases for Segmentation in Consumer Markets

Consumer markets can be segmented on the following customer characteristics.

Geographic
Demographic
Psychographic
Behavioralistic

Geographic Segmentation

The following are some examples of geographic variables often used in segmentation.

Region: by continent, country, state, or even neighborhood

Size of metropolitan area: segmented according to size of population

Population density: often classified as urban, suburban, or rural

Climate: according to weather patterns common to certain geographic regions

Demographic Segmentation

Some demographic segmentation variables include:

Age
Gender
Family size
Family lifecycle
Generation: baby-boomers, Generation X, etc.
Income
Occupation
Education
Ethnicity
Nationality
Religion
Social class

Many of these variables have standard categories for their values. For example, family lifecycle often is expressed as bachelor, married with no children (DINKS: Double Income, No Kids), full-nest, empty-nest, or solitary survivor. Some of these categories have several stages, for example, full-nest I, II, or III depending on the age of the children.

Market Segmentation

Market segmentation is the identification of portions of the market that are different from one another. Segmentation allows the firm to better satisfy the needs of its potential customers.
The Need for Market Segmentation

The marketing concept calls for understanding customers and satisfying their needs better than the competition. But different customers have different needs, and it rarely is possible to satisfy all customers by treating them alike.

Mass marketing refers to treatment of the market as a homogenous group and offering the same marketing mix to all customers. Mass marketing allows economies of scale to be realized through mass production, mass distribution, and mass communication. The drawback of mass marketing is that customer needs and preferences differ and the same offering is unlikely to be viewed as optimal by all customers. If firms ignored the differing customer needs, another firm likely would enter the market with a product that serves a specific group, and the incumbent firms would lose those customers.

Target marketing on the other hand recognizes the diversity of customers and does not try to please all of them with the same offering. The first step in target marketing is to identify different market segments and their needs.
Requirements of Market Segments

In addition to having different needs, for segments to be practical they should be evaluated against the following criteria:

Identifiable: the differentiating attributes of the segments must be measurable so that they can be identified.

Accessible: the segments must be reachable through communication and distribution channels.

Substantial: the segments should be sufficiently large to justify the resources required to target them.

Unique needs: to justify separate offerings, the segments must respond differently to the different marketing mixes.

Durable: the segments should be relatively stable to minimize the cost of frequent changes.

Market segmentation

Basically, market segmentation is the process of overall market share of a product or service that is heterogeneous in several segments, where each segment tends to be homogeneous in all its aspects.

The division of market segments:
1. Consumer market segmentation
Market segment that is formed by using the characteristics of consumers (consumer characteristic), then the company will examine whether consumer segments indicate the need or the responses of different products.

2. Business market segmentation
Market segment that is formed by observing the responses of consumers (consumer responses) to the benefits sought, usage time, brand differences.

3. Effective market segmentation

* Can be measured (measurable), the size, purchasing power, the segment profiles;
* Large segments (subtantial): large and profitable enough to be served;
* Can be reachable (accessible): can be reached and served effectively;
* Can be distinguished (differentiable): conceptually separable and respond differently to the elements and program mix;
* Can be taken actions (actionable): an effective program can be formulated to attract and serve the segment.

Which offered an explanation of a series of vectors to attack the authentication systems on-line banking.
The report showed how even the most robust, such as token-based systems could be compromised due to flaws in web applications, code injection, etc .- at certain points “strategic” the bank portal. Changing the user authentication mechanism in a system as complex as the site of a bank is no easy task, and therefore a switch to safer place will go gradually, and always seeking a balance between functionality and security. It is very difficult to implement a really effective and low impact on a population that is accustomed to the use of static passwords from the source of computers, or rather, from the origin of the access control systems in the public domain.

The time advance and banks in a major effort to catch up and offer the best services security systems suited to the “new times.”

Since almost no one doubt that static passwords are not secure. Everyone is aware that anyone who knows the password, you have full access to the system it protects. In order to mitigate some of the unpleasant effect of insecurity, many institutions have begun using them, some take years, some authentication systems base their security on cards known as “Cards coordinates.”

A code card is a table-usually the size of a credit card, with a set of keys. Systems that use this method of protection, requiring users to enter one of these keys for each transaction they desire. The safety of this procedure is that even if an intruder is able to “see” one of those keys, it is unlikely that you can use for an unauthorized operation. Why? A quick reasoning leads to the following conclusion: because the card contains many clues, usually about 60.

Have you ever heard the term segmentation (segmentation) in marketing lecture / a meeting in your company? Some who have followed the marketing management course would have to know and understand deeply about this, but some others may not.

Kotler et al (2004: 316) classifies the level of market segmentation as a marketing mass (mass marketing) and marketing micro-(micro marketing). Mass marketing efforts the company is now producing only one type of products (goods / services), so that all consumers are treated equally to obtain the product.

Mean that consumers are treated in the same statement is that there is only one product for everyone. Kotler presented real examples of this is when the Ford car company from the United States produced the Ford Model T, when COCA COLA sell in bulk to drink 185 ml bottle size, etc..

MASS MARKETING (mass marketing)
What about mass marketing in Indonesia? Well, marketing activities referred to as mass marketing when the mother is buying Ajinomoto MSG products, we buy bottled tea SOSRO (when SOSRO not have Estee, Tebs and Fruit Tea), we bought Pepsodent toothpaste (Pepsodent at that time there was only a color box red and white only), etc.. The focus that we see is the company only produces one type of product to all consumers without categorized in certain characteristics.

From the results of this audit will be determined whether continued as planned, repaired, modified or even abolished sekali.Jika a brand has become a burden and should be abolition, it was realized that the process of removal of a brand in multiple brand strategy conducted in order to better focus on brand-a profitable brand. This process will take no small impact, against the company itself and the customer. It is worth considering in this case including the capture re-users of this brand and led the other brands in a single umbrella and prevent migration to competitors’ products.

With a very good knowledge about market segments can be obtained the right decisions for each brand can actually serve a segment that is selected as the target market of each brand as part of corporate strategy. Segment is a unit of the same customers have a certain desire, therefore are characteristic of market segmentation. Based on the characteristics of the market captured by this company, the company responded by selecting the desired target, determine the differentiation and establish its brand position. Right or not the operation of these multiple brand strategy must be evaluated through the audit process. Structurally, the audit carried out by looking at the construction of a brand architecture to evaluate the relationship between brands and the relative importance of a brand against other brands. This audit is a health diagnosis for each brand in the mix of brands that assessed by naked eye through the level of sales, market share and contribution to the company’s brand. One method that can be used is by mapping them on the basis of its contribution to the mission and contribute financially. As an intangible asset (intangible), in the audit process is also assessed on the basis of brand equity. An audit also includes awareness of the extent of the cycle of the brand, whether it’s been reached or not following the era of establishment of each consequence.

A good understanding of consumers is key for multiple brand strategy success. Necessary support in form of market analysis that aims to recognize and understand the customers who will set a target audience of each brand so as to create the optimization of resources that enhance the company’s competitive advantage. A brand has the potential to gain competitive advantage if the target audience can understand and meet their needs well. This requirement also includes the needs that are emotional, so a brand that is designed to serve this target audience should be able to generate consumer preference against him. Market segmentation is a technique that is essential to successful branding. Said of market segmentation and differentiation rather than product differentiation. Segmentation will support the brand positioning for more efficient and effective. Through the understanding of specific market segments as well, such information as data on lifestyle can increase the effectiveness of advertising and promotion, which also means avoiding waste of funds and other resources. This understanding, for example, will help to present the right impression, to the right audience and through the right medium pula.Segmentasi can provide valuable data for strategic decision making and resource allocation brand. Based on the segmentation is also the company can make decisions related to multiple brand strategy.

Thus the core of multiple brand strategy is to allocate resources appropriately brand based on the needs of each target market segment, as outlined in the portfolio of brands. Segmentation is essentially an effort grouping customers according to their preferences, which will help the brand portfolio as a guide for brands targeting the right target. Market segments will determine the pattern of brand portfolio by considering the strategic role of each brand that are complementary in synergy. Companies must be careful in defining the role of each brand so there is no cannibalization, and a battle between their own brands. If this happens a lot of company resources spent in vain. Dana and company efforts are only used to move the customer base of gengaman right hand moves to his left hand. Diverse brand portfolio does not mean anything if in the long run each brand does not have its own territory. One goal is for multiple brand strategy of each brand has its own plots, and each parcel of land is not expected to coincide with each other. Except if there are strategic or tactical reasons in order to protect the main brand or brands demolish competitors.