1. Segmentation, Targeting & Positioning

2. In this chapter we will go through :-
1. What are the different levels of market
segmentation?
2. How can a company divide a market into
segments ?
3. How should a company choose the most
attractive target markets ?
4. What are the requirements for effective
segmentation ?

3. Overview: Segmentation, Targeting & Positioning
Why do this?

5. • Segmentation:
involves finding out what kinds of consumers
with different needs exist.

6. Processed involved in Segmentation
1.Identify the existing and future wants in the
current market
2.Examine the attributes that distinguish the
segments
3.Evaluate the proposed segment ,attractiveness
on the basis of measurability, accesibility,and
size

7. Step 1. Market Segmentation
Requirements for Effective Segmentation
Measurable • Size, purchasing power, profiles
of segments can be measured.
Accessible • Segments must be effectively
reached and served.
Substantial • Segments must be large or
profitable enough to serve.
Differential • Segments must respond
differently to different marketing
mix elements & actions.
Actionable • Must be able to attract and serve
the segments.

8. Step 1. Market Segmentation
Levels of Market Segmentation
Mass Marketing
Same product to all consumers
(no segmentation)
Segment Marketing
Different products to one or more segments
(some segmentation)
Niche Marketing
Different products to subgroups within segments
( more segmentation)
Micromarketing
Products to suit the tastes of individuals or locations
(complete segmentation)

9. Step 2. Market Targeting
Market Coverage Strategies
Company
Marketing Market
Mix
A. Undifferentiated Marketing
Company
Marketing Mix 1 Segment 1
Company
Segment 2
Marketing Mix 2
Company
Segment 3
Marketing Mix 3
B. Differentiated Marketing
Segment 1
Company
Marketing Segment 2
Mix
Segment 3
C. Concentrated Marketing

10. Step 1. Market Segmentation
Bases for Segmenting Consumer Markets
Geographic
Nations, states,
regions or cities
Demographic
Age, gender,
family size and
life cycle, or
income
Psychographic
Social class, lifestyle,
or personality
Behavioral
Occasions, benefits,
uses, or responses

11. Market Segmentation - Principles
• Segmentation Variables
– Geographic
– Demographic
– Psychographic
– Behavioral
– Other (anything!)
• No single best way to segment a market.
• Often best to combine variables and identify smaller, better-
defined target groups.

12. Geographic Segmentation
• Divide markets into different geographic units.
• Examples:
– World Region or Country: North America, Western
Europe, European Union, Pacific Rim, Mexico, etc.
– Country Region: Pacific, Mountain, East Coast, etc.
– City or Metro Size: New York, San Francisco
– Population Density: rural, suburban, urban
– Climate: northern, southern, tropical, semi-tropical

13. Demographic Segmentation
• Use Differences in:
– age, gender, family size, family life
cycle, income, occupation, education, race, and
religion
– Most frequently used segmentation variable
• Ease of measurement and high availability.
– Usually the worst variable to use.

14. Psychographic Segmentation
Psychographic segmentation
divides a market into
different groups based on
social class, lifestyle, or
personality characteristics.
People in the same demographic classification
often have very different lifestyles and personalities.

15. Value And Lifestyle
SRI Consulting Business Intelligence
Consumer Motivations
Consumer recourses

16. • http://www.strategicbusinessinsights.com

17. • Those primarily motivated by ideals are
guided by knowledge and principles.
• Those motivated by achievement look for
product and services that demonstrate
success to their peers.
• Those who motivate in self-expression desire
social or physical activity ,variety , and risk.

18. Four groups with higher resources :-
1.Innovators :-successful ,sophisticated, active
,take-charge people with high self esteem
.purchases often reflect cultivated tastes for
relatively upscale, niche-oriented products
and services .
Eg:- CEO of an MNC

19. • Thinkers :-Mature , satisfied ,and reflective
people who are motivated by ideals and who
value order, knowledge, and responsibility .
They seek durability , functionality and value
products(Social and emotional values)
• Eg: senior professionals , politicians

20. • Achievers :-successful goal oriented people
who focus on career and family . They favour
premium products that demonstrate success
to their peers.
• Eg : Doctors , Lawyers ,etc

21. • Experiencers :- Young enthusiastic , impulsive
people who seek variety and excitement. They
spend a comparatively high proportion of
income on fashion , entertainment , and
socializing
• Eg:- young IT prof

22. The four group with lower recourse are:-
• 1.Believer :-conservative , conventional
,traditional people with concrete beliefs .They
prefer familiar products and are loyal to
established brand .
• Eg:-Middle income group

23. 2.Strivers :- Trendy and fun loving people who
are resource constrained . They favor stylish
products that emulate the purchases of those
with greater material wealth .
Eg :- Low income

24. 3.Makers :- Practical , down to earth , self
sufficient people who like to work with their
hands . They seek products with a practical or
functional purpose .
Eg:-trade union leaders , human activists

25. 4.Survivors :- Elderly , passive people who are
concerned about change. They are loyal to
their favorite brands.
Eg:- retired employees, senior citizens,

26. Behavioral Segmentation
• Occasion • Loyalty Status
– Special promotions & – Nonusers, ex-users,
labels for holidays. potential users, first-
– Special products for time users, regular users.
special occasions.
• Benefits Sought • Usage Rate
– Different segments – Light, medium, heavy.
desire different benefits
from the same products.

27. Loyalty Status Segmentation
Hard-core
Split loyals
Shifting loyals
Switchers

28. User & Loyalty Status Segmentation

29. Evaluating Market Segments
• Segment Size and Growth Potential
– Sales, profitability and growth rates
• Segment Structural Attractiveness
– Competition, substitute products,
– buyers & supplier power, new
entrants (Porter’s Five Forces)
• Company Objectives and
Resources
– Core competencies
– “What business do we want to be
in?”

30. Targeting Segments - Overview

31. Differentiated (Segmented) Marketing
– Targets several segments
and designs separate offers
for each.
– Coca-Cola (Coke, Sprite, Diet Coke,
etc.)
– Procter & Gamble (Tide, Cheer,
Gain, Dreft, etc.)
– Toyota (Camry, Corolla, Prius, Scion,
etc.)

32. Micromarketing
• Tailoring products and marketing programs to suit
the tastes of specific individuals and/or locations.

33. Activity -2 c
Identify the bases by which companies have
segmented their markets for these products
(taking help from the television ads and other
advertisements) : Nakshatra diamonds
, Cinthol soaps , Domex toilet cleaner and
parker pen .

34. TARGETING
• Targeting is defined as a group of people or
organisations for which an organisation
designs , impements and maintains the
marketing mix .

35. Selecting target market
• Homogenious preference :- soft drinks
market(Co-co cola )
• Diffused preferences :- automobile
market,HUL having different brands for soaps .
• Clustered preferences :- occupation having
impact on the types cloths worn.

36. Market Preference Patterns

37. Patterns of Target Market Selection:
Product x Market Matrices

38. Positioning
Placing a product occupies in consumers’ minds
relative to competing products.

39. Positioning Example
eBay’s positioning: No
matter what “it” is, you can
find “it” on eBay!

40. Remember this important point.
Positioning is all
about
'perception'.

41. This allows them to be compared and contrasted in relation to each other. This is the
.
main strength of this tool

42. Working of position map
• The marketer would draw out the map and
decide upon a label for each axis.
• They could be price (variable one) and quality
(variable two), or Comfort (variable one) and
price (variable two).
• The individual products are then mapped out
next to each other Any gaps could be regarded
as possible areas for new products.

44. Positioning Maps: Luxury SUVs
Price vs. Orientation Dimensions

45. Bases of positioning the product
• Attribute positioning :- size or number of
years in existence
• Eg : Sunfeast positions its snacky brand as
bigger lighter and crisper.

46. • Benefit positioning : Product is positioned as
the leader in a certain benefit.
• Eg : Hyundai santro
• Headline – India’s best –loved family car is
now also India’s ‘simplest car to drive’

47. • Use or Application positioning
• Positioning the product as best for use and
application .
• Eg: Kenstar positioned its product as
UNEXPECTEDLY COLD

48. • User positioning:- for some user group
• Eg :- Parle-G for kids

49. • Competitor positiong :- the product claims to
be better in some way than a particular
competitor .

50. • Quality and price positioning :-
The product is positioned as offering the best
value .
Eg : Big Bazar

51. Positioning Strategy
• Competitive advantages
• Points of Parity
• Points of Difference => Differentiation
Positioning results from differentiation and
competitive advantages.
Positioning may change over time.

52. Choosing the Right Competitive Advantages
• The best competitive advantages are…
– Important
– Distinctive
– Superior
– Communicable
– Pre-emptive
– Affordable (to company and consumer)
– Profitable
Moral: Avoid meaningless differentiation.

53. Positioning Errors
• Under-positioning:
– Not positioning strongly enough.
• Over-positioning:
– Giving buyers too narrow a picture of the product.
• Confused Positioning:
– Leaving buyers with a confused image of the product.

54. Generic Product Positions
& Value Propositions

55. In-class Activity
• Describe how each of the following
brands, companies, or products is positioned:

56. In-class Activity, Part 2
• Choose one of the companies/brands and…
– Identify relevant direct competitors
– Choose the two dimensions that are most
important to consumers
– Develop a perceptual positioning map
– Are there any opportunities in this category?

57. In-class Activity, Part 3
• Choose a company and invent a segmentation scheme for
that company’s customers using the variables we discussed in
class.