Q. Described different levels of market segmentation?
Ans.: The beginning point for segmentation is mass marketing. In mass marketing, the seller engages in mass production, and mass promotion and mass distribution of one product for all buyer. for example: Henry ford lunched the model T-ford in one color For instance: black.
The argument for mass marketing is that it makes the largest potential market, which leads to lower price and proliferation of advertising media and distribution channels making it hard. Therefore more companies are turning to micro marketing at 1 of 4 levels:, niches, segments ,local & individual.
Segment Marketing: A market segment consists of a group of customers who share a same set of requirement & wants .For example: We can distinguish among car buyers who are primarily seeking low price basic transportation, seeking a luxurious driving experience and those seeking driving thrills and performance, segment and sector should not be puzzled. A car company may say that it will target to young, middle income car buyers. Young middle car buyers are just a sector, not a segment.
The marketer does not make the segments, the marketers task is to recognize the segments & decide 1 which to target. Segment marketing offers key profit over mass marketing. The company may design better price and deliver the product or service to convince the target market.
Niche Marketing: A niche is a narrowly described customer group seeking a distinctive mix of profit. Marketers typically identify niches by dividing a segment into sub segments. Customers in the niche have distinctive sets of requirement, they will pay a premium to the firm that best satisfies their requirement, the niche is not likely to draw other competitors and the niche has size, profit and growth potential.
(i) Larger companies like IBM have lost cost of their market to nicher
(ii) Ezee, the liquid detergent from godrej is a fabric washing product for woolen clothes
(iii) Crack and ointment for pain is another product having niche focus. This product is chiefly targeted at women for prevention of cracked heels.
(iv) Itch guard is focuses on niche requirement of treating itching sensation
(v) Television channels specifically focusing on religion and spirituality.
(vi) Matrimonial websites like www.shadi.com. Niche Marketers are aware of their customer require so well that customer is willing to pay a premium and as marketing efficiency increases niches that were so small, becomes more profitable.
Local Marketing: Target marketing is leading to marketing programs tailored to the needs & desire of local customers groups. Various banks in India have specialized branches that cater to the requirement of corporate customer. The in city courier companies in various cities specialize in delivering packets on the similar day.
The marketing activities focus on getting as near to the individual customers.
For example Nike
Customization: The final level of segmentations leads to 1 to one marketing. Today's customers are taking more individual initiative in determining what and how to buy. They assess internet, look up information, evaluates the product or service and in several cases, design the product they desire. Companies see it more efficient as the marketers can gain more precision and effectiveness by addressing individual requirement.