|
|
Strategic
Issues
___________________________________________
Segmentation
In Dynamic Markets
Dr. S
Ramesh Kumar
Professor of Marketing, Institute of Management, Bangalore
Usefulness
of analysing timestyles
Another advantage of an in-depth analysis of discretionary
time with a database is to target segments based on the intensity
of interest in a specific activity/service/product. Most of
the marketing communication today on products/services aiming
at the discretionary time of consumers is broadly projected
in newspapers or television commercials. Hence they are likely
to reach people who may have a low level of interest in the
product/service advertised or they are likely to be noticed
by consumers who are interested in leisure category (in general)
and hence are likely to compete with different categories,
which belong to the leisure market. Research on the intensity
of interest can enable marketers to reach out to a focused
target segment through specific media. This would result in
higher percentage of consumers buying the product or service.
A premium hill resort package for example could be advertised
on a niche channel like Discovery or National Geographic,
as it is likely to make an impact on the target segment, which
is interested in Nature.
A ‘response-generating’ direct marketing advertisement in
a popular newspaper among a target segment could follow this
up. A brand of mobile phone could have different price slabs
for discretionary time to encourage users to connect with
friends or relatives (the operational aspects could be worked
out based on the offer).
|
Another
advantage of an in-depth analysis of discretionary
time with a database, is to target segments based
on the intensity of interest in a specific activity/service/product
|
Strengths of the company
While reaching out to different segments a company has to
also take into consideration its own strengths. In the moulded-luggage
market, around fifty per cent of the market is in the unorganised
sector and VIP has a very strong distribution network of around
12,000 outlets. A company like Samsonite (a global brand)
has to build up a distribution network in India though it
could draw from a range of about 2000 items of its international
product range. Hence Samsonite is currently operating at the
higher end of the moulded- luggage market.
Tiger from Britannia has been a major success at the lower
end of the biscuit market as a large percentage of the market
lies at the lower end and the company has a very strong distribution
network, which would back up the positioning of the brand.
Leading pen brands like Reynolds, Parker and Luxor are launching
offerings at the higher end of the market taking into consideration
profitability aspects and the intense price competition at
the lower end of the market (below Rs l0 a pen). Even a company
like Hindustan Lever was able to counter the lower-end brand
Nirma only after a few years (after the launch of Nirma).
It launched Wheel as a brand for the lower end of the detergent
market.
E-segments
Digital economy has brought in another topical segment. The
‘E-segment’ is one aspect that most companies consider in
today’s context. As a distribution alternative, it is likely
to complement the channel structure of a company in an environment
that is undergoing radical changes. Avon, the global brand
in cosmetics, which operates in around 135 countries, has
been using direct personal selling for several decades (calling
on the lady of the house). In several markets, because of
environmental changes (double income households and concern
of safety), it is today using the Internet to reach out to
one cross-section of its segment. Brands could use e-commerce
to reach consumers if the transaction involves a high degree
of interaction between the company and the consumer. Cosmetics,
travel and hotel services are certain categories where e-commerce
is likely to be useful to reach one cross-section of the target
segment. Another aspect, which may be of interest to brands,
is that any e-commerce should be targeted with the long-term
orientation— the brand should plan to cultivate the loyalty
of the e-segment over a period of time. A small niche base
of consumers may become loyal consumers in the category of
jewellery if the e-store is able to provide designs and services
that would win the interest and trust of the consumers.
‘Value’ orientation and meaningful positioning
Good product ideas can create segments and help the pioneering
firm to develop ‘top- of-the-mind’ awareness in the respective
product category. Good product ideas could include ‘value’
in terms of customer perception and features, which could
lead to convenience and ease of usage. A brand of detergent
suggesting a complex way of usage may not appeal to consumers
in spite of product improvements. Shampoos in sachets (apart
from enlarging the market significantly) have opened up a
new segment (travelers) because of convenience. In today’s
context of convergence of technologies, there is a distinctive
need to analyse the benefits/needs of target segments. The
three-in-ones of yesteryear (which offered radio, tape recorder
and record player in one device) and the ‘watch-TV’ combination
have been non-starters.
The communication refrigerator (by which one could use the
refrigerator to access the Web) and applications of blue-tooth
technologies (by which several devices at home could be operated
through mobile devices) sound interesting but marketers have
to be clear about drawing a segmentation plan for novelty
seekers (who could be innovators), and consumers look for
benefits from such ‘convergence’ products. In non-durables,
there may be specific positioning slots, which may perhaps
be vacant in the consumer’s mind, but these slots may not
be meaningful in terms of providing a differentiation in dynamic
markets (which is going through several variants and behavioural
changes in the buying behavior). In the category of soaps,
there are a number of brands with variants and it is also
a category where consumer loyalty is known to be fickle. The
positioning slot of ‘family soap’ has to be clearly explained
to the consumer if a brand chooses it for its proposition.
Protex (from Colgate) launched a few years back does not seem
to have made an impact on consumers and currently Godrej has
launched a brand All Care, based on the proposition. Crowning
Glory (which has been re-launched recently) was positioned
as a soap for body and hair.
As there are a number of shampoo brands, which are already
creating a clutter of propositions, there has to be a highly
differentiated proposition for a consumer to buy soap for
both body and hair especially at a price that is not in the
economy range. Perhaps the brand could focus on specific markets
with a proposition of strong foam when used with hard water.
But the brand name has to be a new one for such a strategy
(in this case) so that past association of the brand is not
counter-productive.
Segmentation, targeting and positioning (STP) are dynamic
concepts, which could provide valuable insights for marketers
if used with planned research.
|
|
Magazines