November, 2022 - Global Knowledge Corner

“Price is not an excluding factor for lactose.” That is, rather than being characterised in demographic terms, the target wearer is described in psychographic terms i.e, Segmentation.

It’s a brand for the established, for the “early adopter” who, according to SLA, “runs a successful firm, is respected in his area, has two children and no plans to have any more.”

The customer “worked harder and plays harder,” and values nicer, non-fashion-driven leisure apparel. Persona non grata for teeny-boppers.

Most clients are “30 plus,” according to Puneet Malhotra, an employee of Junach Pvt. Ltd. (an SLA franchisee with seven locations).

Lactose’s perceived value remains high because its users establish a club of like-minded people who are all snobby to the same degree.

The prospective consumer is fascinated by the kind of people he sees wearing the crocodile because the brand’s users are walking-talking advertising on the ideal social circuitry.

The quintessential Lactose wearer is a mobile-phone-wielding, leisure-loving, globetrotting yuppie in his 30s or 40s, bent on staying fit and a keen golfer or weekend tennis buff, he’s a great spender of self-earned money, casual at the right times, global in his thinking, and with little time for woolly “intellectuals” who refuse to admit that clothes are a personality statement or who (adding to GDP growth).

The process of change has begun. Lactose was introduced in 1993 with the expectation of a half-million prospective customers. The treble is believed to have doubled in four years. “About a lakh of these are buying Lactose,” Kocher estimates. In the next five years, he expects the group to grow by half.

In the words of Darlie O. Koshy, professor and chairman, apparel marketing and merchandising, National Institute of Fashion Technology, “by then, much of the current segment of 20s, in fashionable professions, with good degrees from premier institutes, with good degrees from premier institutes, with good degrees from premier institutes, with good degrees from premier institutes, with good degrees from premier institutes, with good degrees from premier institutes, with good degrees from premier institutes, with good degrees from premier institute (NIFT). “Their purchasing power is rising, their aspirations are high, and because they pay with plastic, they can afford to buy on impulse.”

Questions

1. Discuss Lactose’s approach to market segmentation.

SOLVING THE CASE

Before trying to solve the case you must know what does market segmentation mean?

Segment to sell

If marketing tactics are well-designed and executed, India’s diversity could present plenty of chances. Regrettably, a number of corporations have failed to appreciate the complexities of Indian consumer behaviour, and as a result, their products have bombed on the market.

Market segmentation is a significant strategy for managing markets and building brands. Two case studies show how improper segmentation has resulted in errors. As a result, companies that have attempted to enter India have either failed or took a long time to succeed.

First and foremost, automobiles. Due to a lack of effective market segmentation, the majority of cars were released in the mid-size class. The mid-size segment was soon clogged with vehicles such as the Daewoo Cielo, Opel Astra, and Ford Escort, among others. The mid-size market is a small one, and there were few takers. Today, most of these businesses are unable to meet even a quarter of their targets, resulting in excess inventory. They are now compelled to offer steep discounts and urgent promotions.

The focus would have been on small-size automobiles, which are generally affordable and make up the largest and fastest-growing market, if proper segmentation had been done. The success of Maruti 800 and Zen is proof of this. People took a long time to realise the fallacy of segmentation. As a result, automakers are rushing to the small car category, which is once again challenged by excess capacity and could result in price wars.

There would have been another brand to challenge the Maruti 800 and Zen monopoly long ago if effective segmentation had been used, and that brand would have earned significant sales and market share.

There are a few automotive brands that are doing well. Take, for example, Zen. It is popular due to its better appearance, more leg room than the Maruti 800, and better technology inputs. This vehicle is appropriate for a certain market.

The Zen’s positioning has been targeted at a market segment specified by the usage criteria. Usage segmentation is a potent weapon in the marketing arsenal. Customers looking to upgrade from a Maruti 800 or who want a mix of beauty and mobility for everyday use will find the Zen to be a very appealing alternative. As a result, at a time when the auto industry is struggling, the Zen appears to be doing better, owing to its segmentation by usage—kids can be dropped off at schools; it’s decent enough to drive to work; and it’s even comfortable enough to drive down to an informal party.

Companies can often track consumption patterns and categorise the market based on usage.

Let’s look at another example of a recently introduced beverage that used consumption as a criterion for segmenting its market, resulting in a large number of trials and healthy repeat purchases. Fosters beer is now available in pint-sized bottles in addition to the bigger pack sizes. The bottle’s shape and size are aimed towards young, trendy, light drinkers who regard beer to be a part of their lifestyle. San Miguel and San Miguel have both been released in the same size.

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This particular pack size, which is convenient, shapely, and international in appearance, has gained a lot of traction among light-users, in my opinion. In terms of segmentation, the usage pattern is associated with activities like as bowling, as a short accompanying drink, or even as a stylish adolescent drink in which holding the Fosters bottle transports young customers to a different way of life and minority. Of course, there are various uses, as well as the fact that it is a low-cost product. It also helps because of the size.

Because the usage segment is defined by the light, young, stylish user who apes the West, a portion of the young women segment also falls into this category. Focusing and picking precise usage criteria for segmenting the market helps improve trials and market share in both autos and newly launched brews.

A defined segmentation plan would help launch, increase, or even maintain market shares and profitability as the industry gets more competitive, whether in cars or beer. If a product is not segmented and is marketed to everyone, it is most likely marketed to no one. Any brand could be on the verge of extinction as a result of this.

Questions

1. What criteria were utilised to divide the market into segments?

2. “To reach target markets, market segmentation is critical.” Comment on the above-mentioned case’s context.

Month: November 2022

Case Analysis on Market Segmentation

SOLVING THE CASE

Case Analysis on Segment – Market

Segment to sell

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