Marketing Success Through Segmentation
BY JAGDEEP KAPOOR
There are many products and services which are launched on a regular basis in India. Very few actually succeed. We have come to the conclusion that one of the common threats in the success of some of these brands is the practice of segmentation.
Segmentation is a process wherein the set of consumers who seek the same or similar offerings are clubbed together. Thus, instead of appealing to everyone in the population, a very focused approach is taken by sensible marketers who choose a set of consumers with specific needs and desires and clarify that as a market segment they would like to cater to. Those within the segment are more similar in their market wants than are those in the total population at large. While there will always remain differences in wants even amongst those within a segment still focusing on a set of consumers with some kind of homogeneity would ensure greater probability of success.
It is obviously understood that segments may change over a period of time. Smart marketers keep tracking these changes in terms of attitude and aspirations and usage habits so that they are able to cater to a specific segment and satisfy the consumer therein.
Segmentation is not similar to product differentiation. A product may be different for various reasons, whether it be the colour, the shape, the ingredients or the way to use it. In the case of segmentation, the concept is broader than just product differentiation.
The benefits arising from segmenting the market are not always apparent to marketers, since they prefer to serve the total population. Yet, in our opinion, separate offerings from separate segments are usually both desirable and necessary.
Hence, segmentation allows a company to exploit its thrust better by selecting like-minded market subsets. Thus, those who prefer going to an exclusive club with tremendous amount of privacy and the right profile of people would not be sensitive to price highs because their want categories are different.
Secondly, segmentation allows sharply-focussed strategies and hence, is more cost-effective. In the case of durables, Akai seems to have used a very aggressive promotional route towards one segment of customers who desire to upgrade their quality of life but who could not afford TV sets. By using affordability plan and throwing in free gifts as well as instalments plans, Akai has penetrated the market very quickly and deeply. Their focus strategy to bring about affordability to Indian consumers in the TV area has worked.
One of the positives was to develop systems and processes whether in the form of car parking processes, computerization or customer service systems.
Today, Shoppers’ Stop attracts store traffic from far and wide. It has broken the myth of MBAs not wanting to go into a retailing career. A number of young, smart MBAs manage the affairs very competently.
Thirdly, the segmentation helps to develop customer loyalty as similar desires cluster people together and branded offerings to these personalities are far more acceptable in a like-minded environment.
The greatest task of the marketers is to check up:
A. What precisely are being grouped to form segments?
B. What are the bases used for grouping in the segments?
C. How are the bases for grouping into segments selected and what is the process?
D. How should a firm select its segments?
It is important to understand usage, attitude, preference as well as their life-style to be able to go about the segmentation exercise. There could be various bases apart from demographic and psychographic segmentation.
We definitely recommend one specific form of segmentation which could be termed as benefit segmentation. Benefit segmentation is based on what people show or signal are the benefits they seek. It could be in the form of level of preferences while usage.
If you have a clear segmentation strategy, there is a good chance that you would be able to have a relevant and effective positioning strategy. This is because you would be able to facilitate positioning of the brand relevant to like-minded people related to that particular segment.
The author is Brand Guru Jagdeep Kapoor, Managing Director of the successful Samsika Marketing Consultancy Pvt. Ltd.
Tel: 022 28477700 / 7701
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