Segmentation, Targeting, Positioning

SEGMENTATION

A market segment consists of a group of customers who share a similar set of needs and wants. The marketer’s task is to identify the appropriate number and nature of market segments and decide which one(s) to target. The major segmentation variables are —geographic, Demographic, psychographic, and behavioural segmentation. For segmentation in the Indian Context factors such as below are followed:

1.     Geographic Regions – India is a varied country in terms of consumer base. North is different than south in buying patterns so is west & east India. No particular sub - region even in one region has the same consumer characteristics in terms of buying and selling.

2.     City Size & Density – The population in a particular city or the density are also a basis on which the segmentation is done.

3.     Family Life Cycle & Gender – Family Life Cycle (FLC) & Gender are also taken into consideration when segmentation of a market is carried out.

4.     Income & Occupation – Income & Occupation are also taken into account. The income levels and the occupation the individual is in is also form a basis for segmentation.

5.     Education – Education levels of individuals are also taken into account. Whether the consumer is a school pass - out, in college, graduate, post graduate or a professional has a direct effect on the consumer buying pattern for the individual.

6.     Religion – Religious factors also play a big role in multi – cultural diverse country like India. Marketers carry out the segmentation of the market also on the socio – cultural & religious factors.

MARGET SEGMENTATION OF LUX:

Gender: female

Age- 16 to 40

Income- Middle income group 

Highest selling soap in both urban and rural areas

Affordable

Targetting 

Once segmentation of a market is done, targeting that group with the company’s product is essential. Target Market operates at four main levels – Mass Market, Multiple Segments, Single (or Niche) segment, and individuals. 

A mass market targeting approach is adopted only by the biggest companies like Amul. Many companies target multiple segments defined in various ways such as various demographic groups who seek the same product benefit. Multiple Segments are those segments which can be targeted by the companies to get a wider consumer base. Niche targeting is a recent phenomenon. Companies & Marketers have now realized that there exists a segment which is willing to buy products of a premium level provided the services offered are of a luxury level. An individual is now becoming more important to marketers as  now companies have realized that even an individual now has the potential to create or mar an image of the product by talking on new age mediums like social networking sites. Companies are now approaching individuals to consult them on the innovation which can be brought in the products. 

POSITIONING

To develop an effective positioning, a company must study competitors as well as actual and potential customers. Marketers need to identify competitors’ strategies, objectives, strengths, and weaknesses.

A company should also pay attention to latent competitors, who may offer new or other ways to satisfy the same needs. A company should identify competitors by using both industry- and market-based analyses.

Points-of-difference are those associations unique to the brand that are also strongly held and favourably evaluated by consumers. Points-of-parity are those associations not necessarily unique to the brand but perhaps shared with other brands. Category point-of-parity associations are association’s consumer’s view as being necessary to a legitimate and credible product offering within a certain category. The key to competitive advantage is relevant brand differentiation— consumers must find something unique and meaningful about a market offering. These differences may be based directly on the product or service itself or on other considerations related to factors such as employees, channels, image, or services. Although small businesses should adhere to many of the branding and positioning principles larger companies use, they must place extra emphasis on their brand elements and secondary associations and must be more focused and create a buzz for their brand.

     Amul has created a good position in market, where it has become a synonym to dairy products. its continuous effort  of innovation has made it a market leader.

Hollistic Marketing

A marketing strategy that is developed by thinking about the business as a whole, its place in the broader economy and society, and in the lives of its customers. It attempts to develop and maintain multiple perspectives on the company’s commercial activities.

“A holistic marketing concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognize their breadth and interdependencies. Holistic marketing recognizes that ‘everything matters’ with marketing and that a broad, integrated perspective is necessary to attain the best solution. Four main components of holistic marketing are: relationship marketing, integrated marketing,  internal marketing, and socially responsible marketing.”

GCMMF is not just another organisation growing profitably, it has played a major role in supplementing the income of its producer- members, in empowering women and in providing comprehensive health care for both human beings and animals. they believe in helping the local farmers in not only giving jobs but to increase overall development.

Organization Buying

Organization buying: 

Organization buying is the bulk buying that an organization does for resale or manufacturing purposes.
In Amul,Dairy Cooperatives in Gujarat have created an economic network that links more than 3.1 million village milk producers with millions of consumers in India. These cooperatives collect on an average 9.4 million litres of milk per day from their producer members. Since the raw material for dahi is milk, this is the only item that is bulk bought.
Another example  are the retailers that buy Amul Dahi in bulk to sell in their shop. Bulk buying helps in getting the buyer better and cheap prices for that product.

Also it helps Amul because they sell large volumes of butter. For example: Amul sells its small 200gm packs to airlines or railways in huge numbers, hence it helps Amul in terms of volume, it also helps the buyer because since they require only small quantity, these packs are perfect for them. Overall its a win-win situation.

Sales Management

SALES MANAGEMENT

Sales management can involve any of the following activities: 

(1) formulation of sales strategy through development of account management policies, sales force compensation policies, sales revenue forecasts, and sales plan,

 (2) implementation of sales strategy through selecting, training, motivating, and supporting the sales force, setting sales revenue targets, and

 (3) sales force management through development and implementation of sales performance, monitoring, and evaluation methods, and analysis of associated behavioral patterns and costs.

For Amul, sales are typically in the retail stores. The consumer just has to ask for that particular Amul product in the retail shop or if its a super market he just has to locate it and buy it.

Amul also has some franchisee shops that offer typically only Amul products.

Distribubution Channels

Distribution Channels

f we mention in a single sentence the distribution channel is nothing but it is a process of transfer the products or services from Producer to Customer or end user

Types of Distribution Channels

1.Intensive distribution - Where the majority of resellers stock the 'product' (with convenience products, for example, and particularly the brand leaders in consumer goods markets) price competition may be evident.
2. Selective distribution - This is the normal pattern (in both consumer and industrial markets) where 'suitable' resellers stock the product.

3. Exclusive distribution - Only specially selected resellers or authorized dealers (typically only one per geographical area) are allowed to sell the 'product'.

IMC, ATL , BTL

  

Integrated Marketing Communications

Integrated Marketing Communications is a simple concept. It ensures that all forms of communications and messages are carefully linked together.
At its most basic level, Integrated Marketing Communications, or IMC, as we'll call it, means integrating all the promotional tools, so that they work together in harmony.
As defined by the American Association of Advertising Agencies, integrated marketing communications " ... recognizes the value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines advertising, public relations, personal selling, and sales promotion and combines them to provide clarity, consistency, and maximum communication impact."

Benefits of IMC
Although Integrated Marketing Communications requires a lot of effort it delivers many benefits. It can create competitive advantage, boost sales and profits, while saving money, time and stress.
IMC wraps communications around customers and helps them move through the various stages of the buying process. The organisation simultaneously consolidates its image, develops a dialogue and nurtures its relationship with customers.

ATL and BTL 

Above the line (ATL), below the line (BTL), in organizational business and marketing communications, are advertising techniques, or different strategies companies use to sell their products.

In a nutshell, while ATL communications use media that are broadcast and published to mass audiences, BTL communications use media that are more niche focused. While both ATL and BTL communications can be used to either build brand awareness or drive sales through specific offers (promotions), it is BTL communication that gives the marketer the ability to tailor their messaging in a more personal manner to the audience

ATL advertising uses mass media as a medium to promote brands and reach out to target consumers. this kind of advertising is usually aimed towards a large number of audiences and is much more effective, when the target group is very large and difficult to define.

BTL advertising follows an unconventional and direct form of marketing communication. these include activities such as distribution of pamphlets, handbills, stickers etc. this form of advertising is more direct.

Amul uses a varied form of ATL advertising such as billboards and TV ads

Pricing Decisions

PRICING DECISIONS

Pricing is the process of determining what a company will receive in exchange for its products.

Traditionally Price has been a major determinant of a buyers choice.

Consumer Buying Psychology: 

Reference Prices:  Consumers have fairly good idea of the price range of a product, but rarely do they recollect the exact price. When examining a product, consumers often employ Reference Prices, where the compare the observed price to an internal reference price. 

For example  : Britannia curd is priced at Rs. 40/- for 400gm and Amul dahi  is priced at Rs. 35/- for 400 gms. So the price range that a buyer will have in his mind will be somwhere in between 30 and 40. Hence the company has to price the product in this range, taking into consideration the competition, its profits etc.

Price- Quality inferences: Many consumers use price as an indicator of quality. Some brands adopt exclusivity and scarcity as a means to signify uniqueness and justify premium pricing. For ex:

Watches, perfumes etc.

Price cues: Many sellers believe that prices should end in an odd number because for example: many customers see an amplifier priced 2999/- in the range of 2000/- rather than rounding it off to

3000/-

But prices ending in 5 or 0 are easier for the customer to process and retrieve from memory.

Also the sign of SALE next to a price is shown to spur demand if not over done. Even limited availability (3 days only) is seen to have spurred sales.

Pricing for Amul Dahi

At the time Amul was formed, consumers had limited purchasing power, and modest consumption levels of milk and other dairy products. Thus Amul adopted a low-cost price strategy to make its products affordable and attractive to consumers by guaranteeing them value for money.Despite competition in the high value dairy product segments from firms such as Hindustan Lever, Nestle and Britannia, GCMMF ensured that the product mix and the sequence in which Amul introduces its products is consistent with the core philosophy of providing butter at a basic, affordable price to appeal the common masses. This helped AMUL DAHI to create its brand image in the household sector of the society.

400gm

• Cup - Rs. 29.00

• Pouch - Rs. 16.00

200gm

• Cup - Rs. 15.00

• Pouch - Rs. 09.00

Branding

Branding

Meaning

A brand is a symbol, a mark, a name that acts as a means of communications which bring about an identity of a given product. A brand in short is an identifier of the seller or the maker. A brand name consists of words, letter or number that can be vocalized. Brand mark is the visual representation of the brand like a symbol, design, distinctive coloring or lettering. Brand creates a bond between the customer and a product.

Definition According to American Marketing Association

a brand is defined as a name, item, sign, symbol or special design or some combination of 

these elements that is intended to identify the goods or services of one seller or a group of seller. A brand differentiates these products from of competitors.

In the word of Philip Kotler

A brand is name, term, sign, symbol or design or combination of them.

Intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

Amul follows a family branding strategy as amul is the common brand for most product categories. by adopting a family brand, GCMMF skillfully avoided interunion conflicts and created an oppurtunity for the union members to cooperate in developing products.

Brand Name: Amul

It is an abbreviation for Anand Milk Union Limited

The word Amul is derived from the Sanskrit word Amulya, meaning invaluable

Gives a sense of trust and consistency

Easy to memories, pronounce

Brand Logo:

The Amul girl was created by Eustace Fernandes in 1967

The Amul girls was initially only used for butter, but now we can she is also used to promote Amul ghee and milk 

She is also considered as the most popular brand ambassador

Brand Slogan: 

Amul the brand has its slogan as "Amul - The Taste of India"

Amul butter has its slogan as "ye bhi koi puchne ki baat hai"

Brand Promise: 

 The message clearly states about quality and superior taste.

It also clearly tells about being ready to cater to the whole country, thus generating trust

Amul  usually does not co-brand.

SERVICES AND SERVICE MARKETING

Services:

The American Marketing Association defines services as: 

1.Products, such as a bank loan or home security, that are intangible or at least substantially so. If totally intangible, they are exchanged directly from producer to user, cannot be transported or stored, and are almost intantly perishable. Service products are often difficult to identify, because they come into existence at the same time they are bought and consumed. They comprise intangible elements that are inseparable; they usually involve customer participation in some important way; they cannot be sold in the sense of ownership transfer; and they have no title. Today, however, most products are partly tangible and partly intangible, and the dominant form is used to classify them as either goods or services (all are products). These common, hybrid forms, whatever they are called, may or may not have the attributes just given for totally intangible services. 

2. Services, as a term, is also used to describe activities performed by sellers and others that accompany the sale of a product and aid in its exchange or its utilization (e.g., shoe fitting, financing, an 800 number). Such services are either presale or post-sale and supplement the product, not comprise it. If performed during sale, they are considered to be intangible parts of the product.

Characteristics of a service:

Intangibility: Services are intangible and do not have a physical existence. Hence services cannot be touched, held, tasted or smelt. This is most defining feature of a service and that which primarily differentiates it from a product. Also, it poses a unique challenge to those engaged in marketing a service as they need to attach tangible attributes to an otherwise intangible offering. 

Heterogeneity/Variability: Given the very nature of services, each service offering is unique and cannot be exactly repeated even by the same service provider. While products can be mass produced and be homogenous the same is not true of services. eg: All burgers of a particular flavor at McDonalds are almost identical. However, the same is not true of the service rendered by the same counter staff consecutively to two customers.

Perishability: Services cannot be stored, saved, returned or resold once they have been used. Once rendered to a customer the service is completely consumed and cannot be delivered to another customer. eg: A customer dissatisfied with the services of a barber cannot return the service of the haircut that was rendered to him. At the most he may decide not to visit that particular barber in the future.

Inseparability/Simultaneity of production and consumption: This refers to the fact that services are generated and consumed within the same time frame. Eg: a haircut is delivered to and consumed by a customer simultaneously unlike, say, a takeaway burger which the customer may consume even after a few hours of purchase. Moreover, it is very difficult to separate a service from the service provider. Eg: the barber is necessarily a part of the service of a haircut that he is delivering to his customer.

Types of Services:
Core Services: A service that is the primary purpose of the transaction. Eg: a haircut or the services of lawyer or teacher.

Supplementary Services: Services that are rendered as a corollary to the sale of a tangible product. Eg: Home delivery options offered by restaurants above a minimum bill value.

Services Marketing

Stated simply, Services Marketing refers to the marketing of services as against tangible products. As already discussed, services are inherently intangible, are consumed simultaneously at the time of their production, cannot be stored, saved or resold once they have been used and service offerings are unique and cannot be exactly repeated even by the same service provider. Marketing of services is a relatively new phenomenon in the domain of marketing, having gained in importance as a discipline only towards the end of the 20th century. Services marketing first came to the fore in the 1980’s when the debate started on whether marketing of services was significantly different from that of products so as to be classified as a separate discipline. Prior to this, services were considered just an aid to the production and marketing of goods and hence were not deemed as having separate relevance of their own.

In case of Amul dahi the only association will be the customer care number provided on the pack for the consumer to give a feedback or complain in case of a defect and the official company website which gives more information about the product.

Customer Value Heirarchy

CUSTOMER VALUE HIERARCHY 









In planning its market offering, the marketer needs to address five product levels. each Product adds more customer value and the five constitute a customer value hierarchy.

Core Benefit: It is the fundamental level in customer value hierarchy. It is the benefit or service the customer is really buying. In case of dahi, the customer is buying it to eat it or use it as an ingredient. 

Basic Product: This is the second level in customer value hierarchy. The marketer must turn the core benefit into a basic product. In case of soaps, the marketer must provide with basic taste that a curd would provide

Expected Product: This is the third level in customer value hierarchy. Here the marketer prepares an expected product, a set of attributes and conditions that customers normally expect when they purchase this product. In case of dahi, a customer expects good quality and nutrients.

Augmented Product : At the fourth level, the marketer prepares an augmented product that exceeds customer expectations. To fight competition the marketeer tries to offer an augmented or may an even better than expected product. In case of dahi the marketer can offer the option for healthy and fresh dahi instead of preservatives.

Potential Product : At the fifth level stands the potential product, which encompasses all the possible augmentations and transformations the product or offering might undergo in the future.

Competition

Competition

Nestle is a major competitor with presence in North and South Markets

Regional Competitors:

Mother Dairy in Delhi

Mahananda in Mumbai 

Nandini, Aavin, Heritage and Nilgiri in South

Other competitors include Britania and Danone

In gujarat Masti Dahi is the only packed curd in the market

Competitor’s analysis:

(Porter's 5 forces)

  1.Competitor rivalry: A segment becomes inattractive if it has already existent competitors as it leads to slow market growth and similar cost structures. The competitors for Amul Dahi are Nestle, Britania. This leads to price wars, brand wars and ad wars.

2.New or potential entrants: The local or new entrants will face difficulty as there is already high and tough competition, thus there will be very high entry barrier. Though I feel for potential entrants it’s a pretty attractive segment. Since amul has been the oldest brand, it has managed to build trust in the eyes of customers. To compete in this segment is very difficult for new entrants and would require many efforts to brand the new product. eg; danone

3.Threats of substitute product: it is highly a competitive product, and threat from substitute product means the threat from another product to company’s product. In case of amul, there isnt a available substitute.

4.Bargaining power of suppliers and buyers: The segment becomes quite unattractive if buyers and sellers have high bargaining power. In case of amul, due to highly competitive market and a good reputation, it is very attractive segment as no such bargaining is required.

Amul has been a brand leader in this market for a very longtime. starting from mom and pop stores to departmental stores, you will find Amul Dahi easily avaialable and in different sizes and packaging. Amul dahi has become a household name due to its strong brand image.

Due to its strong image and expertise in the sector, I feel it will continue to be the market leader, because of its reach in rural as well as urban cities and trust it has built in so many years.

Product Mix

Product mix, also known as product assortment, refers to the total number of product lines that a company offers to its customers. For example, a small company may sell multiple lines of products. Sometimes, these product lines are fairly similar, such as dish washing liquid and bar soap, which are used for cleaning and use similar technologies. Other times, the product lines are vastly different, such as diapers and razors. The four dimensions to a company's product mix include width, length, depth and consistency.

Width
Length
Depth
Consistency
The width of a company's product mix pertains to the number of product lines that a company sells. For example, if a company has two product lines, its product mix width is two. Small and upstart businesses will usually not have a wide product mix. It is more practical to start with some basic products and build market share. Later on, a company's technology may allow the company to diversify into other industries and build the width of the product mix.

The total number of items in its width are 8. ( bread spreads , cheese , desert, cooking,health drink, milk drinks,powder milk & fresh milk
Product mix length pertains to the number of total products or items in a company's product mix, according to Philip Kotler's textbook "Marketing Management: Analysis, Planning, Implementation and Control." For example, ABC company may have two product lines, and five brands within each product line. Thus, ABC's product mix length would be 10. Companies that have multiple product lines will sometimes keep track of their average length per product line. In the above case, the average length of an ABC Company's product line is five.
The total Length of product used for cooking which includes Amul Dahi are 7


Depth of a product mix pertains to the total number of variations for each product. Variations can include size, flavour and any other distinguishing characteristic. For example, if a company sells three sizes and two flavours of toothpaste, that particular brand of toothpaste has a depth of six. Just like length, companies sometimes report the average depth of their product lines; or the depth of a specific product line.

Amul dahi has 2 kinds of packaging which are cups and pouches in sizes of 200 and 400 gm in two varieties of Amul Masti dahi and Probiotic Lite so a total depth of 8
Product mix consistency pertains to how closely related product lines are to one another--in terms of use, production and distribution. A company's product mix may be consistent in distribution but vastly different in use. For example, a small company may sell its health bars and health magazine in retail stores. However, one product is edible and the other is not. The production consistency of these products would vary as well.

Buying Decision Process

Buying Decision Process

Problem Recognition - In case of Amul Dahi the need would be for a customer to serve with lunch or dinner or requirement as an ingredient for a dish.

Information search - Information can be acquired by ad campaigns, suggestions by sales staff at a grocery store or supermarket or even through word of mouth from friends and family. Although Amul being such a popular brand does not require any form information seeking.

Evaluation of alternatives - Amul has two alternatives that is regular dahi and low fat dahi for the health cautious consumers. Other alternatives include Nestle and Danone which are major competitors to Amul but with a difference in price range hence comparision between the between the brands does not arise.

Purchase Decision- In above steps, the customer has already made perceptions about the brand and has an intention of buying the most preferred brand. with consumer friendly prices, trust in the brand and options to choose from the available options along with brand image will help the customer in finally buying Amul dahi.

Post Purchase Behaviour-  After the consumer has bought Amul butter, the marketeer needs to look at the customer's post purchase satisfaction too, so that the customer will buy Amul Dahi again. If the customer is happy with the product, the same quality has to be maintained or excelled further more, and if the customer is dissatisfied the customer's problem should be solved and he should also be promised an improved product that will certainly try and solve his problem.