MBA UOM second sem MM

1. Unit III
Identifying Market Segment

2. S TE P
Positioning
Targeting &
Evaluating
Marketing Strategy
Segmentation

3. Objective
• Summarize the relationship between market segmentation, targeting
and positioning
• The advantage of segmenting a market
• Requirement for effective segmentation
• Identify and describe the major variables for consumer segmentation
• Outline how companies select target markets and implement
segmentation strategies
• Frequently used market segment targeting approaches

4. Why do this?
Overview

5. Market Segmentation
• Process of dividing the total market into several
homogeneous groups
• A market segment is a portion of a larger market in which
the individuals, groups or organizations share one or more
characteristics that cause them to have relatively similar
product needs

6. Market Segmentation
Bases for Segmenting Consumer Markets
Geographic
Demographic
Age, gender, family size
and life cycle, or
income
Psychographic
Social class, lifestyle,
or personality
Behavioural
Occasions, benefits
sought, user status,
usage rate, loyalty
Nations, states,
regions or cities

7. Geographic Segmentation
• Divide overall market by location
• 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: Bangalore,
NewDelhi
– Population Density: rural, suburban,
urban
– Climate: northern, southern, tropical,
semi-tropical
Geoclustering
combines geographic data with
demographic data

8. Demographic Segmentation
– Divide overall market by
• Age and Life-cycle Stage
• Life Stage
• Gender
• Income
• Generation
• Race and Culture
• Use Differences in:
• Most frequently used segmentation variable
– Ease of measurement and high availability.
• Usually the worst variable to use.

9. Age and Life-Cycle Stage
Wants and abilities change with age.
Life stage defines a person’s major concern

10. Gender
Women:
Influence 80% of consumer purchases
Make 75% of new home decisions
Purchase 60% of cars
Men and women have different
attitudes and behaviors due in part
to genetics and socialization

11. Income
Income segmentation is used in
categories such as clothing, travel,
financial services, and automobiles

12. Generation
Silent Generation (1925-1945) Baby
Boomers (1946-1964)
Gen X (1964-1978)
Millennial’s (Gen Y) – (1979-1994)
- 78 Million people
- > 25000 Rs annual spending
power
Develop products and services that uniquely meet the particular
interests or needs of a generational target.

13. Race and Culture
Different ethnic and cultural segments have sufficiently
different needs and wants

14. Psychographic Segmentation
 Personality traits
 Lifestyle
 Values
Divides population into groups that have similar psychological
character, values, and lifestyles
People in the same demographic classification often have very
different lifestyles and personalities

15. Behavioral Segmentation
User and Usage
Needs and Benefits
Decision Roles
Initiator
Influencer
DeciderBuyer
User
Usage occasions
User status
Usage rate
Buyer-readiness
Loyalty status

16. Behavioral Segmentation
• Occasion
– Special promotions &
labels for holidays.
– Special products for
special occasions.
• Benefits Sought
– Different segments
desire different benefits
from the same products.
• Loyalty Status
– Hard-core
– Split loyals
– Shifting loyals
– Switchers
• Usage Rate
– Light, medium,
heavy.

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

18. Consumer Attitudes
Enthusiastic Positive Indifferent Negative Hostile

19. Brand Funnel

20. User & Loyalty Status Segmentation

21. • Size, purchasing power, profiles
of segments can be measured.
• Segments can be effectively
reached and served.
• Segments are large or profitable
enough to serve.
Measurable
Accessible
Substantial
Differential
Actionable
• Segments must respond
differently to different marketing
mix elements & programs.
• Effective programs can be
designed to attract and serve
the segments.
Requirements for
Effective Segmentation

22. Bases for Segmenting B2B Markets
Demographic
Operating Variables
Purchasing Approach
Situational Factors
Personal Characteristics
Industry, company size, location
Technology, user status, customer capabilities
Power structure, nature of existing relationship
Urgency, specific application, size of order
Buyer-seller similarity, loyalty, risk attitude

23. • https://www.cia.gov/library/publications/the-
world-factbook/geos/in.html

24. Target Market
Targeting involves the process of evaluating each segments
attractiveness and selecting one or more segments to enter

25. Market Targeting
Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable

26. • 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?”
Evaluating Market Segments

27. Market Targeting
Porter’s Five Force
Rivals
New
Entrants
Substitute
Products
Buyer
Power
Supplier
Power
Rivals
New
Entrants
Substitute
Products
Buyer
Power
Supplier
Power

28. Evaluating and Selecting Segments
Individual marketing
Full market coverage
Multiple segment
specialization
Single-segment
concentration

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

30. Levels of Segmentation

31. – Ignores segmentation opportunities
– firms that produce only 1 product or 1 product
line AND market it to all customers
– Offers one product or service to the entire market
– Salt, sugar, steel etc.,
Undifferentiated (Mass) Marketing

32. Differentiated (Segmented)
Marketing
– Targets several segments
and designs separate offers
for each.
– firms that produce
numerous products w/ dif
marketing mixes designed
to satisfy smaller segments
– Coca-Cola (Coke, Sprite, Diet Coke,
etc.)
– Procter & Gamble (Tide, Cheer,
Gain, Dreft, etc.)
– Toyota (Camry, Corolla, Prius, Scion,
etc.)

33. Niche Marketing
– firm may choose to focus on satisfying a
smaller target market rather than attempting
to market its product offerings to an entire
market
– Targets one or a couple small segments
– Niches have very specialized interests

34. • targeting potential customers at a very basic level (i.e.: by zip codes,
specific occupations, lifestyles or individual households)
• Tailoring products and marketing programs to suit the tastes of
specific individuals and/or locations.
Micromarketing

35. Positioning
• Positioning is arranging for a product to occupy a clear, distinctive and desirable
place relative to competing products in the mind of the consumer
• The act of designing a company’s offering and image to occupy a distinctive
place in the minds of the target market.
• EXAMPLE: To (target segment and need) our (brand) is (concept) that
(point-of-difference)

36. Means of Differentiation
Employees
Channels
Image
Services Product
Design
Quality
Additional Services
Price

37. Positioning Strategies
• Attribute Positioning – Allahabad bank
• Benefit Positioning – ICICI bank
• Use/Application Positioning - Vicks
• User Positioning – Horlicks
• Competitor Positioning – IIPM against IIM
• Category positioning – Category leader - Dove
• Quality/Price Positioning – Tata Nano, Oberoi Hilton
• Corporate identity – Itc, Reliance
• Brand Endorsement – Titan

38. Brand Positioning
• Customer wants and needs
• Company capabilities
• Competitive actions
Quality
Price
Brand A
B
C
D
E
F
G

39. Points of Parity / Difference
Points of Parity
POP
Points of Difference
PODattribute or benefit associations that are
not necessarily unique to the brand
attributes or benefits that consumers
strongly associate with a brand

40. Positioning errors
• Under positioning
– Me too a brand in crowd
• Over positioning
– Projecting high attributes - apple
• Confused Positioning
– Frequent reposition makes consumer confuse
• Doubtful positioning
– Brand name & manufacturer problems

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

42. 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?