MICRO SEGMENTATION AND MASS CUSTOMIZATION

Micromarketing:

Segment and niche marketers tailor their offers and marketing programs to meet the needs of various market segments. At the same time, however, they do not customize their offers to each, individual customer. Thus segment marketing and niche marketing fall between extremes of mass marketing and micromarketing. Micromarketing is the practice of tailoring products and marketing propraliis to suit the tastes of specific individuals and locations. Micro marketing includes local marketing and individual inarketing or mass customization. Let us learn them.

a) Local Marketing:

This involves tailoring brands and promotions to the needs and wants of local customer groups-cities, neighborhoods, and even specific stores. Many big retailers routinely customize each store's merchandise and promotions to match its specific clientele. Local marketing has some drawbacks, It can drive up manufacturing and marketing costs by reducing economies of scale. It call also create logistics problems as companies try to meet the varied requirements of different regional and local markets. Despite some of these drawbacks, local marketing helps a company to market more effectively in the face of pronounced regional and local differences in community demographics and lifestyles. It also meets the needs of the company's first line customers[1]retailers-who prefer more fine-tuned product assortments for their neighborhoods.

b) Individual Customer Marketing or Mass Customization:

In its extreme form, micro marketing becomes individual customer marketing or mass customization-tailoring products and marketing programs to the needs and preferences of individual customers. This has also been labeled one-to-one marketing, customized marketing, and markets-of-one marketing. Mass customization is the ability of a company to prepare on a mass basis individually designed products, services, programs, and communication, to meet each customer's requirements.

Market Targeting

 A target market is defined as a set of buyers sharing common needs or characteristics that the company decides to serve. It is very important to select the target market to which the company decides to serve because knowledge about how the consumers decide, what are the criteria of buying products, the characteristics and life style of the targeted customers can help the marketers to develop a suitable marketing strategy. Every marketing strategy involves marketing expenditure and the return of a market program can only be identified if we are able to know the target market for which the marketing program is targeted.

The target market selection process

As can be seen in the following model of the full STP (segmentation, targeting and positioning) process, the selection of target markets occurs after a number of important steps.

Firstly, the organization defines the product/market that they are interested in, they then group consumers into different market segments using a variety of segmentation bases/variables.

After the segments have been validated, segment profiles are developed.

Then, using the information in the segment profile the target potential target markets are evaluated and selected, most likely by using an established model or other set of minimum requirements.

Market Targeting Strategies

Concentrated Marketing :

When company resources are limited and the competition is intense enough that the marketing manager has to stretch the market budget for market coverage, the companies follow a concentrated marketing strategy. The company decides to cover a large niche than fighting for a small share in a large market.

Differentiated Marketing:

 In differentiated marketing strategy, marketers target several market segments and design separate offers for each segment. They target severaI segments or niches with a varied marketing offer to suit to each segment needs.

Undifferentiated Marketing:

Marketers may go against the idea of a segmented market and decide to sale the product in the whole market. Here the marketing manager ignores the idea of segment characteristics differences and develop a marketing program for the whole market. This approach keeps the over all marketing costs low and makes it easier to manage and track the market forces uniformly.

POSITIONING

Product positioning depends on market structure, competitive position of the firm and the concepts of substitution and competition among products. Product positioning reflects most of the features of the word position, For example, position of a place - what place does the product occupy in its market, a rank, how does the product fare against its competitors in various evaluative dimensions and a mental attitude - what are consumer attitudes i.e., the cognitive, effective and action tendencies towards the given product. Therefore product positioning should be assessed by measuring consumer's or organisational buyer's perceptions and preference for the product in relation to its competitors.

Brand positioning involves implanting the brand's unique benefits and differences in customer's mind.

A Maggi noodle is positioned in Indian market as a convenience food, which can solve the frequent food demand of the growing kids.

Dove soap is positioned as a premium brand in the market with high moisturizer content which can be used as a face wash also.

Vicks Vapo -rub is positioned as a rub exclusively for the purpose of cold and cough relief.

All brand differences are not worthwhile for positioning and they do not necessarily carry same meaning to the consumers. Each difference has the potential of an additional cost of communication and an additional benefit of revenue due to distinct differentiation. A difference should satisfy the following criteria:

Distinctive: Competitors cannot offer or the company can offer better than the competitor can. Superior: The difference is superior to other ways that the customers might obtain the same benefit. Profitable: The manager can introduce the difference with a profit, Preemptive: Competitors cannot imitate the difference easily. Affordable: Buye1.s can afford to pay for the difference.

Communicable: The difference should be communicable and visible to the buyer. Important: The difference delivers a highly values benefit to target buyers.

Selecting an Overall Positioning Strategy

Alternative Bases for Positioning

Marketers use a number of alternative bases for positioning their products. While positi;ning a product, specific features may be highlighted. Price and specific performance features are used usually as a basis for positioning.

Positioning on Benefits, Problem Solution or Needs:

 In this positioning strategy, the marketer highlights the benefits of the product to the consumer. For example, herbal cosmetics focus on natural products, no side effects, skin friendly, etc.

Positioning for Specific Usage Occasions: Here positioning is based on specific usage occasions. For example, Maggi 2 minutes noodles suggests preparation of snack as fast as possible.

 Positioning for User Category: Product is positioned based on the category of the user. For example, Raymond's 'The Complete Man'. Another example is Electrolux's fully automatic washing machine whose users are those whose hands are cleaned, lotion and nail polished, and they are sophisticated and intelligent. They would consider it insulting and way below their manicured dignity to turn more than one knob. –

Positioning against another Product: Both implicit and explicit positioning strategies are used against rival products. For example, Thomson presents "what is missing in other televisions ". It focuses the features of Thomson without naming its competitor. This is an example of implicit positioning. Another examples are: attribute charts shown by cars and televisions which highlight their own features without naming their competitor's name. In the explicit positioning, the product is positioned by comparing its superior features with other products. For example, before launch, Telco positioned Tata Indica by claiming the features as - Maruti Zen's size, Ambassador's internal dimensions, the price of a Maruti 800 and with running cost of diesel.

Production Class Dissociation : It is a less common positioning strategy. It is effective when a new product is introduced and it differs from the typical products in an established category. For example, at the brand level most successful anti[1]product class positioning is that of 7-up with un-colapositioning. Hybrid bases : In this strategy, marketers use a hybrid approach incorporating features from more than one bases for positioning.

Communicating and Delivering the Chosen Positioning Strategy

The managers should take the next step in communication the selected position to the target audience. The marketing mix should support the desired positioning communication through integrated marketing communication. If the brand communication talks about a specific positioning proposition then the brand should deliver the same at trial as well as the adoption stage of the product.