Expert: Leo Lingham - 4/23/2009

Question
1)Distinguis primary data from secondary data. What are the merits, demerits and limitations?
2)Briefly discuss the concept of  positioning. What is the positioning of :
a) Nano car from  Tata.
b) Airtel - DTH service

Answer
KELVIN,
HERE  IS  SOME  USEFUL  MATERIAL.
REGARDS
LEO  LINGHAM
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1.PRIMARY   RESEARCH  
Primary Sources

Some definitions of primary sources:
Primary sources are original materials on which other research is based
They are usually the first formal appearance of results in the print or electronic literature (for example, the first publication of the results of scientific investigations is a primary source.)
They present information in its original form, neither interpreted nor condensed nor evaluated by other writers.
They are from the time period (for example, something written close to when what it is recording happened is likely to be a primary source.)
Primary sources present original thinking, report on discoveries, or share new information.

Some examples of primary sources:
scientific journal articles reporting experimental research results
proceedings of Meetings, Conferences and Symposia.
technical reports
dissertations or theses (may also be secondary)
patents
sets of data, such as census statistics
works of literature (such as poems and fiction)
diaries
autobiographies
interviews, surveys and fieldwork
letters and correspondence
speeches
newspaper articles (may also be secondary)
government documents
photographs and works of art
original documents (such as birth certificate or trial transcripts)
Internet communications on email, listservs, and newsgroups

ALSO
means  gathering  information  directly  from the  consumers
which  could  involve

-using  questionnaire.
-using  focus  group [ face  to face  interview ]
-telephone  interviews
-panel  interviews
-person  to  person  interviews
etc  etc
==============================
1.MERITS
-from  the primary  source.
-original information.
-current  data.
-reliable.
-clearly  defined.

2.DEMERITS
-time  consuming.
-expensive  process.
-difficult  to  procure,  sometimes.

3.LIMITATIONS.
-due  to  time/ cost factors, the  amount  of  data  gathering  is restricted.
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2.SECONDARY   RESEARCH

Secondary Sources
Secondary sources are less easily defined than primary sources. What some define as a secondary source, others define as a tertiary source. Nor is it always easy to distinguish primary from secondary sources. A newspaper article is a primary source if it reports events, but a secondary source if it analyses and comments on those events. In science, secondary sources are those which simplify the process of finding and evaluating the primary literature. They tend to be works which repackage, reorganize, reinterpret, summarise, index or otherwise "add value" to the new information reported in the primary literature. More generally, secondary sources

Some Definitions of Secondary Sources:
describe, interpret, analyze and evaluate the primary sources
comment on and discuss the evidence provided by primary sources
are works which are one or more steps removed from the event or information they refer to, being written after the fact with the benefit of hindsight.

Some examples of secondary sources:
bibliographies (may also be tertiary)
biographical works
commentaries
dictionaries and encyclopedias (may also be tertiary)
dissertations or theses (more usually primary)
handbooks and data compilations (may also be tertiary)
history
indexing and abstracting tools used to locate primary & secondary sources (may also be tertiary)
journal articles, particularly in disciplines other than science (may also be primary)
monographs (other than fiction and autobiography)
newspaper and popular magazine articles (may also be primary)
review articles and literature reviews
textbooks (may also be tertiary)
treatises  works of criticism and interpretation

ALSO
means  gathering  information  indirectly  from the  published  source
which  could  involve

-using  census  data.
-buying published  data  from  bureaus
-gathering  data  from   stock  exchange  
-collecting  information  from   company  annual  reports.
etc  etc
=====================================
1.MERITS
-from  the  secondary   source.
-easy  to  source
-less  time  required.
-less  expensive.


2.DEMERITS
-repackaged   information.
-re-interpretation.
-not  so  reliable.
-old  data   and  not  current.

3.LIMITATIONS.
-not  current  data.
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Market Segmentation

A Market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.
Market segmentation is the process in marketing of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs. Because each segment is fairly homogeneous in their needs and attitudes, they are likely to respond similarly to a given marketing strategy. That is, they are likely to have similar feelings and ideas about a marketing mix comprised of a given product or service, sold at a given price, distributed in a certain way and promoted in a certain way.
Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private sector. Small segments are often termed niche markets or specialty markets. However, all segments fall into either consumer or industrial markets. Although it has similar objectives and it overlaps with consumer markets in many ways, the process of Industrial market segmentation is quite different.
The overall intent is to identify groups of similar customers and potential customers; to prioritize the groups to address; to understand their behaviour; and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment. Revenues are thus improved.
Improved segmentation can lead to significantly improved marketing effectiveness. With the right segmentation, the right lists can be purchased, advertising results can be improved and customer satisfaction can be increased

The purpose for segmenting a market is to allow your marketing/sales program to focus on the subset of prospects that are "most likely" to purchase your offering. If done properly this will help to insure the highest return for your marketing/sales expenditures. Depending on whether you are selling your offering to individual consumers or a business, there are definite differences in what you will consider when defining market segments.

Category of Need
The first thing you can establish is a category of need that your offering satisfies. The following classifications may help.

For businesses:
Strategic - your offering is in some way important to the enterprise mission, objectives and operational oversight. For example, a service that helped evaluate capital investment opportunities would fall into this domain of influence. The purchase decision for this category of offering will be made by the prospect's top level executive management.
Operations - your offering affects the general operating policies and procedures. Examples might be, an employee insurance plan or a corporate wide communications system. This purchase decision will be made by the prospect's top level operations management.
Functional - your offering deals with a specific function within the enterprise such as data processing, accounting, human resources, plant maintenance, engineering design, manufacturing, inventory control, etc. This is the most likely domain for a product or service, but you must recognize that the other domains may also get involved if the purchase of the product or service becomes a high profile decision. This purchase decision will be made by the prospect's functional management.

For the individual consumer:
Social Esteem or Pleasure - your offering satisfies a purely emotional need in the consumer. Examples are a mink coat or a diamond ring. There are some products that are on the boundary between this category and the Functional category such as a Rolex watch (a Timex would satisfy the functional requirement and probably keep time just as well).
Functional - your offering meets a functional requirement of the consumer such as a broom, breakfast cereal or lawnmower.

Segmentation of Needs  FOR  BUSINESS  ORGANIZATIONS

Then you should establish what the need is and who is most likely to experience that need. Your segmentation will be determined by a match between the benefits offered by your offering and the need of the prospect. Some "need" categories for segmentation include:
Reduction in expenses
Prospects might be businesses that are downsizing (right sizing), businesses that have products in the mature stage of their life cycle or individuals with credit rating problems.
Improved cash flow
Prospects might be businesses that have traditionally low profit margins, businesses that have traditionally high inventory costs or individuals that live in expensive urban areas.
Improved productivity
Prospects might be businesses that have traditionally low profit margins, businesses that have recently experienced depressed earnings or individuals with large families.
Improved manufacturing quality
Prospects might be businesses with complex, multi-discipline manufacturing processes.
Improved service delivery
Prospects might be service businesses in highly competitive markets, product businesses requiring considerable post-sale support or individuals in remote or rural areas.
Improved employee working conditions/benefits
Prospects might be businesses where potential employees are in short supply.
Improvement in market share/competitive position
Prospects might be new entrants to a competitive market.
Need for education
Prospects might be businesses or individuals looking for books on business planning, or seminars on Total Quality Management.
Involvement with social trends
Prospects might be businesses concerned with environmental protection, employee security, etc. or individuals who believe in say 'no' to drugs, anti-crime, etc.
Specific - relating to product/service characteristics
Prospects might be businesses or individuals interested in safety, security, economy, comfort, speed, quality, durability, etc.

Factors that segment prospects
Having determined the more general segmentation characteristics you can proceed to a more detailed analysis of the market. There are literally thousands of ways to segment a market, but the following are some of the more typical segmentation categories.

For businesses:
Industry by SIC code
This is especially beneficial for vertical market offerings.
Size - revenues, # employees, # locations
In general if your offering is highly sophisticated, requires significant resources or provides greater value based on volume, then the target should be the larger enterprises.
Job position/responsibility
Examples of offerings might be planning software for managers or cleaning agents for maintenance managers.
Climate
Examples of offerings might be dehumidifiers in areas near the ocean or snow plows in northern areas.
Time related factors
Some services in this category are vacation related industries in summer and tax planners in the spring.
Language
An example of a language specific service is a Spanish TV channel.
Status in the industry
You might want to target businesses that are the technology leader or revenue leader or employee satisfaction leader, etc.
Accessibility
To minimize promotion and sales expense you may want to target urban rather than rural or local rather than national prospects.
Future potential
A good example is how Apple Computer supplied products to schools at all levels to condition students graduating into the marketplace.
Ability to make a quick purchase decision
Targeting individual purchasers versus business committees can significantly reduce marketing expense and increase the probability of a quick close.
Access (or lack of access) to competitive offerings
Cable TV business's significant investment in their service delivery system has allowed a near monopoly for some time. IBM's service reputation insured minimal competition during the mainframe days.
Need for customization
Offerings such as police cars, busses for municipalities and specialized computer systems fall into this category.
Product or service application to a business function
Examples are data processing, accounting, human resources and plant maintenance.
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For Individual Consumers:
Physical Size
Offerings might be big men's clothing, golf clubs for shorter players, etc.
Creation of or response to a fad
Examples are hula hoops, Jurassic Park T-shirts, pet rock, physical fitness, etc.
Geographic location
Marketers take advantage of location by selling suntan lotion in Hawaii, fur coats in Alaska, etc.
Time related factors
You may be able to target vacationers in summer, impulse buyers during the holidays or commuters at 7AM.
Demographics/culture/religion
Ethnic products would fall into this category.
Gender
Product examples are scarves for women, ties for men, etc.
Age
Product examples are toys for children, jewelry for women, etc.
Social status
This could include country club memberships, philanthropic contributions, etc.
Education
Product and service examples are encyclopedias, scientific calculators, learning to read tools and financial counseling.
Avocation
This could include products for hunting, fishing, golf, art work, knitting, etc.
Special Interests
You could target cat lovers, science fiction readers, jazz music collectors, etc.
Accessibility
Because the individual is more difficult to reach you may want to segment by urban versus rural, train commuters, people who read Wall Street Journal, etc.
Access (or lack of access) to competitive offerings
Due to high investment capital requirements or timing of market entry you may be able to capture a significant market share in a specific geographical area. Examples might be a trash service, emergency medical support, etc.
Need for specific information
Based on features or content of your offering you can target a market segment. A product might be books on how to start a business or a service might be seminars on how to quit smoking.
Need for customization
Product/service examples are home decoration, fashion wear, personal portraits, etc.
Need for quality, durability, etc.
Product examples are mountain climbing gear, carpenter's tools, etc.
Degree of a product/service ingredient
Segmentation based on prospect preferences is common. An example is dark chocolate for some tastes, light chocolate for others.
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While market segmentation can be done in many ways, depending on how you want to slice up the pie, three of the most common types are:
Geographic segmentation – based on location such as home addresses;
Demographic segmentation – based on measurable statistics, such as age or income;
Psychographic segmentation – based on lifestyle preferences, such as being urban dwellers or pet lovers.
If you’re interested in target marketing, the first step is to do the research that will help you define and zero in on your target market.
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The requirements for successful segmentation are:
homogeneity within the segment
heterogeneity between segments
·   segments are measurable and identifiable
·   segments are accessible and actionable
·   segment is large enough to be profitable
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These criteria can be summarized :
D Differential: it must respond differently to a different marketing mix
A Actionable: you must have a product for this segment to be accured
M Measurable: size and purchasing power can be measured
A Accessible: it must be possible to reach it efficiently
S Substantial: the segment has to be large and profitable enough
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The variables used for segmentation include:
1.Geographic variables

region of the world or country, East, West, South, North, Central, coastal, hilly, etc.
country size/country size : Metropolitian Cities, small cities, towns.
Density of Area Urban, Semi-urban, Rural.
climate Hot, Cold, Humid, Rainy.

2.Demographic variables

-age
-gender Male and Female
-sexual orientation
-family size
family life cycle
Education Primary, High School, Secondary, College, Universities.
income
occupation
education

3.socioeconomic status

religion
nationality/race
language

4.Psychographic variables

personality
life style
value
attitude

5.Behavioural variables

benefit sought
product usage rate
brand loyalty
product end use
readiness-to-buy stage
decision making unit
profitability


When numerous variables are combined to give an in-depth understanding of a segment, this is referred to as depth segmentation.
When enough information is combined to create a clear picture of a typical member of a segment, this is referred to as a buyer profile. When the profile is limited to demographic variables it is called a demographic profile (typically shortened to "a demographic"). A statistical technique commonly used in determining a profile is cluster analysis.
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THE  BY-PRODUCT  OF   MARKET  SEGMENTATION   IS  THE  
IDENTIFICATION  OF   THE  PARTICULAR  SEGMENT, TARGET   MARKET
WHICH  ONE  WANTS  TO  EXPLOIT.
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NANO  '' SMALL  CAR''

IN   UNIVERSAL  TERM, the nano   is   a   small  car.

IN  INDIAN  TERM,
-nano  is  specifically  designed  for the  indian  market.
-it is designed  for the  indian  market
-it is  designed  ''as a  value  for  money''
-it  is  designed  with  india  made parts.

THE  MARKET  SEGMENTATION  VARIABLES   CONSIDERED

FOR  THE  BUSINESSES.

-reduction  in capital  expenses.
-reduction in  operation   expenses.
-reduction in  maintenance  expenses.

-improvement in the   cash flow.
-improvement  in  the  working  conditions  for  field  employees.
-improvement  in   the   productivity  of  field employees.

-improvement  in   the  business  market  coverage
-improvement  in  the  business  results.
----------------------------------------------------
FOR  THE  INDIVIDUALS


1.Demographic variables
*age
*gender Male and Female
*sexual orientation
*family size
*family life cycle
*Education Primary, High School, Secondary, College, Universities.
*income
*occupation
*education
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2. socioeconomic status
*religion
*REGIONAL  FOCUS   
*language
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3. Geographic variables
*region of the  country,NORTH / SOUTH/ EAST/ WEST/CENTRAL etc.
*metro/ rural  : Metropolitan Cities, small cities, towns.
*Density of Area Urban, Semi-urban, Rural.
*climate Hot, Cold, Humid, Rainy.
---------------------------------
4.Psychographic variables
*personality
*life style
*value
*attitude
--------------------------
5.Behavioural variables
*benefit sought
*product usage rate
*brand loyalty
*product end use
*readiness-to-buy stage
*decision making unit
*profitability
*income status
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THE  BY-PRODUCT  OF   MARKET  SEGMENTATION   IS  THE  
IDENTIFICATION  OF   THE  PARTICULAR  SEGMENT,  WHICH  ONE
WANTS  TO  EXPLOIT.

HENCE  TO  AIM  AT  THE  NICHE  MARKET,
ONE  MUST  HAVE  TO  SEGMENT  THE  MARKET  FIRST,
IT  IS   A  CRITICAL  STEP.
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A niche market also known as a target market is a focused, targetable portion (subset) of a market sector.
By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. A niche market may be thought of as a narrowly defined group of potential customers.
A distinct niche market usually evolves out of a market niche, where potential demand is not met by any supply.
Such ventures are profitable because of disinterest on the part of large businesses and/or lack of awareness on the part of other small companies. The key to capitalizing on a niche market is to find or develop a market niche that has customers who are accessible, that is growing fast enough, and that is not owned by one established vendor already.

Marketing in and for niche markets
Niche marketing is the process of finding and serving profitable market segments and designing custom-made products or services for them. For big companies those market segments are often too small in order to serve them profitably as they often lack economies of scale. Niche marketers are often reliant on the loyalty business model to maintain a profitable volume of sales. this also means theres a gap in the market
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IT IS  NOT  DANGEROUS  TO  PICK / MARKET  MANAGE  A NICHE MARKET.
BUT  THE  RISK  IS  HIGH.
THE  RISK  COULD  INVOLVE
-wrong  segments
-bad  market  planning
-poor cost.benefit  analysis
-poor  profiling  of the market segment
-ineffective  selection of  the  market mix
-poor targeting  efforts
etc.
HENCE  CAREFUL  SEGMENTATION   IS   CRITICAL.

To Qualify As A  NICHE  Market Target, A Group Of Customers Should
Meet Important Conditions.


For any group regarded as a potential NICHE  market target, the following questions should be asked:

Will the group satisfy our profit objectives?

Is it apt to grow?


How stable is the market?

Can we accurately measure the size and purchasing power of the target?


Will we be able to reach the target with our promotion?

Do we have the resources to serve the proposed targeted market?


Are the homogeneous customers within the possible segment influential? Will their purchases cause other groups to buy the products?


Can we identify the customers so that we can know where and how to appeal to them?


How strong is our competition in this target market? Are there any competitive opportunities for us?


Many market segments will not meet the above requirements. For instance, a certain group may not have promising growth potential, yet it may offer stable and profitable business forces.

THIS  WILL  HELP  TO  REDUCE  THE  RISK  FACTORS.
=================================================
PRODUCT  POSITIONING   IN   THE  SELECTED  MARKET  SEGMENT.

FIRST  STEP -- DO   THE  RESEARCH
The first step in the positioning process is to do the research. The good news is that product marketing managers already have done most of the research as part of their job. To successfully position a product, you need a thorough understanding of customer problems, channel issues, and how competitors are positioned. The answers to these and other questions become part of a rationale document for your positioning strategy:
What is your target market (size, type of company, etc.)?

Who is the decision maker you want to target your message to, and what keeps that decision maker awake at night?

What pressing problem does your product solve for your prospective customer?

How is your prospect solving that problem today?

What specific benefit does your product deliver?

Why is your product better than the current solution and competitive alternatives?

Who are your key competitors; why and when do you win or lose to them?

How do your competitors position themselves in their marketing communications, including ads, direct mail campaigns, brochures, and web sites?

What makes your product unique in a way that is relevant to your prospect?

Are there any problems, unique challenges, or special needs of your channel?

What do prospects and customers like and dislike about your product?

Do prospects and customers share your belief of why your product is better than the competition’s?

Are there any characteristics of a sales situation that indicate whether or not your product or service will be selected?

Now incorporate the answers to these questions in a rationale document. By doing so, all product knowledge is captured in one place and can be used as a reference guide when marketing and sales need it. The rationale document should be three to five pages and should include this information:
Product Category—Define the product’s key features, advantages, and benefits. A matrix can help clarify these items.

Product Line Fit—Describe how the product fits into the overall company product strategy.

Situation Analysis—Describe the conditions that justify the release of this product, including why the company believes it can be successful.

Market Analysis—Profile target market(s) by size, revenue, market segment, operational type, or other relevant categories.

Audience Analysis—Profile key prospects within the target market(s), including job titles and functions (demographics) and their concerns, attitudes, and behaviors (psychographics).

Distribution—Describe how the product will be distributed and the impact of distribution on product communications.

Competitive Positioning—Describe the key competitors, their targets, and how they position their products.

Positioning Statement and Rationale—Evaluate the product positioning statement against the following four criteria: Is it important, unique, believable, and usable?

Support Points—Describe how the three support points make the positioning statement unique, believable, and important. If multiple markets or audiences require unique support points, explain why.
A rationale document transfers important product knowledge to those who need to know, but who don’t have the time or expertise to find the information themselves. It’s especially useful when creating a product message strategy that includes a positioning statement (number 8 in the rationale document) and three or four support points (number 9).

A  MESSAGE  STRATEGY  IS   A   TIME  SAVER
Your positioning statement becomes the central idea and theme underlying all marketing activities. It is a short, compelling, declarative sentence that states just one benefit and addresses the target market's number one problem. It must be unique, believable, and important, or the target market will ignore the message. Once you have found the right message, your product marketing managers won’t need to be involved in every planning session for every marketing campaign.
Supporting benefit statements tell the story in more detail. They also provide a structure for product demonstrations. While the positioning statement articulates a high-level benefit, the claims made in the supporting statements should be readily demonstrable. That is, in just a few steps, you should be able to show how the product delivers concrete benefits.
Make sure your message strategy has enough detail to support the creation of a standard product demonstration. This helps your product marketing managers to create a demo quickly. And there’s another benefit—the product detail in the support points answers a lot questions before marketing and sales ask them.
A message strategy also facilitates delivery of the same message across all marketing media, including web sites, brochures, advertisements, and presentations to investors, industry analysts, and prospects. A standard outline format makes it easy for writers and other communicators to see the message strategy's benefit hierarchy, and to take full advantage of it.
A Rationale Document Captures All the Product Knowledge
In addition to documenting product knowledge, the positioning process improves marketing without intense, time-consuming input from product marketing. A message strategy is like the recipe for how to talk about your product. Follow the recipe rather than ask product marketing, and your marketers can create a compelling, accurate story about your product.
This does not mean that your product marketing managers no longer need to be involved in the planning and creation of marketing materials. They should provide input when appropriate. It’s just that the process won’t take up nearly as much of their time. That’s because marketing gets most of its infusion of product knowledge by referencing the rationale document and message strategy. And that means your product marketing managers have successfully cloned themselves; they’ll have more time for other competing priorities.
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HERE   ARE  TWO   EXAMPLES

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1..NANO
*SEGMENT----- middle  class.
*TARGET----upper  income  brack [ 400,000  ----1mill rupees]
*POSITIONING -----affordable /  CONVENIENT.
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2.AIRTEL-DTH
*SEGMENT-middle  class
*TARGET - FAMILIES  with  median  income.
*POSITIONING ----entertainment for  all  situations.
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