Service market segmentation and targeting

Service market segmentation and targeting

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  SERVICE MARKET SEGMENTATION AND TARGETING
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  INTRODUCTION Segmenting , targetingand positioning are strategic fundamentals of marketing used to generate competitive advantage, which can be translated into business opportunities that form the success story of organization. Defining a market is the basis of segmentation. Service firms vary widely in their abilities of serving. It would then , not be wise to compete in an entire market. Instead, organisations should focus on the set of customers they can serve best.
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  For a serviceorganisation, the company’s focus can be described on two dimensions- the service focus and the market focus. Taking the two variables of service offered and the market served, organisation can be grouped into four types:- I. Unfocused II. Service focused III. Market focused IV. Fully focused
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  Breadth of serviceoffering NARROW WIDE MANY Number of Markets Served FEW 2. Service focused 1. Unfocused 4. Fully focused 3. Market focused
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  SEGMENTATION Market segmentation isdefined as the process of dividing the market into distinct groups that share common characterstics, needs ,purchasing behaviour, or consumption patterns. Market segmentation is a strategy that recognises the need of ‘specialisation’ to suit the needs of a segment of the market rather then trying to be ‘all things to all people’.
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  Why market segmentationis important ? It leads to efficient and effective utilization of resources. Improves manageability of the market by dividing the markets into smaller parts. Helps to improve the company’s ability to satisfy customers.
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  OBJECTIVES OF SEGMENTATION Identify the similiarity of needs of potential buyers within a segment and persue them with taliored products.  Identify the difference between needs of buyers among segments and try to cater to these different needs.  Once the specific segment has been chosen for the marketing efforts ,the organization is more focused in its efforts and there is a potential for increased return on investment.  It is cost effective for the marketers to assign the buyers to different segment on the basis of a number of parameters.
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  MARKET SEGMENTATION SEGMENTATION Consumer based Buying-situation based GeographicDemographic psychographic region city Density Climate Age and life cyle stage Gender Income Social class lifestyle personality Special occasion Benefits sought Usage rate Loyalty status Buyer readiness stage
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  TARGETING Targeting is thechoice of a single segment or group of segments that the organisation wishes to select. Companies can evaluate and select market segment on the basis of:- • Segment size and growth • Segment structural attractiveness • Company objective and resources
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  Selecting market segments Oncethe segments have been evaluated the market to be targeted can be selected on the basis of- • Undifferentiated marketing • Differentiated marketing • Concentrated marketing • Customised or micro marketing
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  Market coverage Strategy Thetarget market selection involves the dynamic process of matching the changing variety of products and services with the changing variety of customer wants. Companies need to consider several factors while choosing a market coverage strategy. Some of them are as follows:- • Company’s resources • Degree of product homogeneity • Product life cycle stages • Market homogeneity • Competitor’s marketing strategies