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Pitch Exclusive: Mass vs niche: What’s right?

22-June-2011
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Pitch Exclusive: Mass vs niche: What’s right?


“You can’t only talk to kids, grown-ups...”
Hemant Malik, COO, Trade Marketing & Distribution, ITC FMCG
The basis of marketing is that a relevant product is created to suit a particular segment. If you try to sell everything to everybody, you will not appeal to anybody. So, marketers today need to look into new segments because the Indian market is very large and growing. Consumers are also very different as they have different needs. So it is important to understand consumers’ requirements, called ‘consumer insight’, and accordingly bring products to fulfill their needs.

So, if you have a clear proposition and your product delivers to specific needs, you will have a successful offer. Finding new insights takes you closer to the consumer needs and helps in developing new segments and new proposition. For instance, magazines are good examples to learn about segmentation and see how magazines have segmented readers. Ten years back, everybody would read India Today. But today, there is a magazine for every interest group. So, it is not about demographic segmentation only. You can’t talk only about kids, grown-ups, men, women... these are only demographic segments. The need is to go to the next level. You need to segment further within demographic segmentation and marketers even need to go for psychographic segmentation.

“Create individual needs of consumers”
Pratik Seal, Head, Marketing, Micromax
India has a population of 121 crore and it is increasing. Every human being is similar, yet different. It is the similarity across categories that we cater. However, the specific requirements of an individual consumer have to be catered too. Therefore, a brand should follow a segmented approach. Thus, a company has to follow both mass market approach as well as a segmented approach.
 

“Data and statistics are not readily available”
Sumit Sahay, Head, Marketing, Croma
Consumer segmentation is still evolving. Marketers are still figuring out on the consumer segments present as information/ statistics/ data to identify consumer segments is not as readily available as in other parts of the world. Here, while there is a very good appreciation of the fact that multiple market segments exist, companies are still grappling with how to differentiate the segment and keep them distinct without overlapping their needs with someone else’s.

This is probably resulting in new product variants being launched, such as in telecom, where TG is identified in terms of their budget such as launch of pay per use, prepaid and postpaid options being available. I am not too sure of many other companies identifying segments in a scientific manner, but this will surely evolve with time. Luxury market is the most distinctly segmented market, where marketer has to reach out to a niche TG and not the mass market. Thus, planning brand strategy is more streamlined.

“Not one, there are thousand Indias”
Sajid Shamim, ED, Marketing and Product, Reebok India
There is a great challenge posing marketers today in the form of extreme consumer fragmentation. India is not one India, but thousand Indias. Whenever you are making a media plan you are always overstretched to handle this consumer fragmentation. The reach of newspapers like The Times of India is pan India, so you really do not know whom you are reaching through your advertisement. When you are doing such a communication you are not even sure whether you are wasting investment in reaching out to someone you do not intend to go to.

“Many brands now have a sister offering”
Sanjay Tripathy, Head, Marketing, HDFC Life
BMW today is an aspirational brand you want to own. Now there is a major segment that can’t afford the high price. So BMW understood that and came up with an SUV, which is X1, at a sedan price point. So, many people who would already go for a sedan may like to move a level up to own a BMW brand. Therefore, the brand understood the hidden potential of a different segment and it is reflected in the sales of BMW, which is available on more than three month waiting time. Most of the brands now have a sister offering. For example, Taj has got Vivanta and also Ginger. So Tata has sub-brands, but very clear sub-brands. So, today marketers have to be very clear on the quality delivery of the brands.

“Mass brands need no segmentation”
Ajay Kakar, CMO, Financial Services, Aditya Birla Group
For mass brands, you do not need to segment. For example, if you take a new lemon, it is very easy to get juice from it. But for a mature brand from where juice has already come out, it is a tough task to get more drops from it. There segmentation helps. So, if you are a mass brand, segmentation may not help.

Our Take

Consumer segmentation is essential to successful modern-day marketing, considering the diverse demographic profile of the country and growing consumer-orientation of organisations. However, it’s a Herculean task to classify and identify segments within segments without relevant data on consumer profiles. Moreover, brands need to constantly ideate, innovate and customise products to reach the right TG. Telecom sector exemplifies this point as major brands such as Tata Docomo, Reliance and Airtel, among others, initiated pay plans according to the needs of demographics they were serving. Automobile companies have understood the potential of segmentation by customising products to widen consumer base and creating new consumers; Nano being a case in point. Thus, consumers can be lured to trade-up with products marked at lower introductory pricing. The need is to constantly evolve consumer insights keeping track of changing buying habits of people.

Good customer segmentation requires brands to treat customer clusters differently for long-term sustainable advantage and find opportunities in the market to create new customers with niche offerings. Reebok, for instance, busted the myth of market saturation by expanding the market for potential women buyers with the introduction of the ‘toning’ category and has been creating newer consumer markets. It is critical for mature brands to create sharp segmentation strategies to maintain long-term loyalty and relationship with consumers.

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