Principles of Marketing - Essay Example

More than 50% of Indian consumers use ordinary toilet soaps to clean their hair and usage of shampoo among majority of the populace is still restricted to social occasions as weddings and parties. While per capita consumption of shampoos is only 13ml in India it is 160ml and 330ml in Indonesia and Thailand respectively. The bigger players in Indian shampoo market are HLL, P&G, CavinKare, Dabur and Ayur (equitymaster.com 2007). Segmentation Companies divide markets into groups of consumers or segments with distinct needs and wants and identify which market segments it can serve effectively.

To develop the best marketing plans managers need to understand what makes each segment unique and different. Marketing theory categories preferences into three different sub-categories (Anderson 2008): Homogenous preferences: When all consumers have roughly the same preferences and the market does not exhibit any natural segments. Diffused preferences: When consumers vary greatly in their preferences and if there are different brands in the market they are likely to position themselves throughout the available space and show real differences to match differences in consumer preferences.

In shampoo market marketers almost always face a situation of diffused preferences as each category has specific requirements and expectation from the products they use. Clustered preferences: When natural market segments emerge from groups of consumers with shared preferences. Shampoo market is segmented primarily according to usage benefits. Some shampoos claim to serve the cosmetic benefits of providing strong, healthy and shining hair. Others claim to remove dandruff completely while the third category claims to deliver all the benefits related to herbal ingredients.

The anti-dandruff segment is the fastest growing among the three segments with an annual growth rate of approximately 12% per annum (equitymaster.com 2007). There is also another small segment that is steadily gaining ground. This segment offers specialized shampoos as those that can be safely used in colored hair without removing the color. But this segment has not grown enough in size to warrant a separate analysis. Marketers also segment the market according to following criteria (Czepiel 1992): Geographic Segmentation: It divides the market into different geographical units such as nations, states, regions, cities or neighborhoods.

In shampoo market, however, such variations do not matter that much as targeted consumers in every region or nation would have same, or nearly same, perceptions about beautiful hair. Demographic Segmentation: It divides the market into groups on the basis of age, family size, family life cycle, gender, income, occupation, education, religion, nationality and social class. Marketers of shampoo concentrate on ladies, irrespective of their age, and their income while marketing their products. Though in some situations religion, especially Islam might also have to be taken into account.

Marketers can now reach women very easily through television. Psychographic Segmentation: Buyers are divided into different groups on the basis of psychological/personality traits, lifestyles or values. People within the same demographic group can exhibit very different psychographic traits. Marketers of sh