Segmentation, Targeting & Positioning | UNIT - 3 | M 104 | Rajasthan Technical University

1. SEGMENTATION

2. What is a ‘Market Segmentation’?
• A market consists of people or organizations with wants,
money to spend, and the willingness to spend it. However,
in most markets, all the buyers' needs are not identical.
• Therefore, a single marketing program for the entire market
is unlikely to be successful.
• A sound marketing program starts with identifying the
differences that exist within a market.

3. What is a ‘Market Segmentation’?
• In a process called market segmentation, market segments
are identified and then the company decides, which
segments will be treated as target markets.
• Market segmentation is customer oriented and consistent
with the marketing concept.
• It enables a company to make more efficient use of its
marketing resources

4. Market Segmentation Defined
• Market segmentation is defined as ‘the process of taking the
total, heterogeneous market for a product and dividing it into
several submarkets or segments, each of which tends to be
homogeneous in all significance’.
• For instance, instead of mentioning a single market for
'shoes', it may be segmented into several sub-markets, e.g.,
shoes for executives, doctors, college students etc.

5. Requirements for Market Segmentation
• For successful market segmentation, the following principles
are to be followed
 Measurability of Segments
 Accessibility of Segments
 Representability of Segments

6. Measurability of Segments
• The main purpose of market segments is to measure the
changing behaviour patterns of the consumer
• Variations in behaviour pattern of the consumer is numerous
and complex
• Segments should be capable of giving accurate
measurements

7. Accessibility of Segments
• Accessibility of segments is comparatively easier because of
distribution, advertising media, salesmen etc
• Newspapers and magazines also offer help in this direction
• E.g. there are many magazines which are meant specifically
for the youth
• The task of accessibility is achieved through the internet
these days

8. Respresentability of Segments
• The segment should be large and profitable in order to be
considered as a separate segments
• Such segment must have individuality of its own
• Segment is usually small in case of industrial markets and
large in case of consumer products

9. Benefits of Market Segmentation
 Finding out product acceptance
 Adjustment and proper allocation of resources
 Change required could be implemented without losing
markets. E.g. Diversification of product line
 Effective promotion of products
 Appropriate timing for introduction of new products can be
known.

10. Factors influencing Segmentation
1. Internal Factors includes:-
 Strengths & Philosophies
 Organizational Culture
 Operational Issues
 Organizational objectives

11. Factors influencing Segmentation
2. External Factors includes:-
 Competition
 Market Dynamics
 Changing technology
 New Trend, fashion, Preference

12. Basis of Market Segmentation
• The various basis of doing Market Segmentation are:
• Geographic Segmentation
• Demographic Segmentation
• Socio – Economic Segmentation
• Product segmentation

13. Geographic Segmentation
• The marketer often fined it convenient to sub-divide the
country into areas in a systematic way.
• The great advantages of adopting this scheme are that
standard regions are widely used by Government and it
facilitates collection of statistics
• Most of the national manufacturers split up their sales areas
into sales territories either state-wise or district-wise.

14. Demographic Segmentation
• Demographic segmentation is done of the basis of:
• Age – children, teenagers, adults, old people
• Gender
• Family life cycle
• Income
• Occupation
• Level of education

15. Demographic Segmentation
• This is considered are more effective because the emphasis
ultimately rests on the customers
• Demographic variables are – Age, Gender, Income level,
Education Level etc.
• The variables are easy to recognize and measure
• For example, in the case of shoes, the needs and preferences
of each group could be measured with maximum accuracy.

16. Family life cycle
• Family life cycle can be subdivided into
• Young, single
• Young, married, no children
• Young, married, child under six
• Young, married, child over six
• Old, married, child under eighteen
• Older, single
• Others

17. Socio Economic Segmentation
• The segmentation here is done on the basis of social class
• E.g. working class, middle, income groups, etc.
• Since marketing potentially is intimately connected with the
"ability to buy", this segmentation is meaningful in deciding
buying patterns of a particular class.

18. Product Segmentation
• This segmentation is done on the basis of product characteristics:
 Prestige products – automobile, clothing
 Maturity products – cigarettes, blades
 Status products – luxuries, diamonds
 Anxiety products – medicines
 Functional products – fruits, vegetables

19. TARGETING

20. What is a ‘Target Market’?
• A target market refers to a group of potential customers to
whom a company wants to sell its products and services
• This group also includes specific customers to whom a
company directs its marketing efforts
• Consumers who make up a target market share similar
characteristics including buying geography, buying power,
demographics, and incomes.

21. What is a ‘Targeting’?
• Targeting in marketing is a strategy that breaks a large
market into smaller segments to concentrate on a specific
group of customers within that audience.
• It defines a segment of customers based on their unique
characteristics and focuses solely on serving them.
• Instead of trying to reach an entire market, a brand uses
target marketing to put their energy into connecting with a
specific, defined group within that market.

22. Targeting Strategies
 Three different approaches to target marketing can be
adopted
 Undifferentiated marketing
 Differentiated marketing
 Concentrated marketing

23. Undifferentiated Marketing
[Standardization]
• In this strategy, the firm offers the same product
to different market segments
• It uses same communication, price and
distribution strategies
• Under such circumstances firms may adopt mass
advertising and other mass methods in marketing,
• e.g., Coca Cola.

24. Differentiated Marketing
• The company differentiates its products to suit
various segments and their expectation.
• Each segment has different characteristics
• For example, airline offers business class and
economy class flights.
• E.g. TATA manufactures watches under two labels
– TITAN and SONATA

25. Concentrated Marketing [focused]
• Only a specific customer group is targeted.
• Then new products are introduced and test marketing is
conducted, and this method is adopted

26. POSITIONING

27. What is a ‘Positioning’?
• Positioning is the process of creating an image of the product
or service in the minds of the consumers
• Positioning defines where a product or service stands in
relation to others offering similar products and services in
the marketplace as well as the mind of the consumer.
• E.g. automobile companies can position their products as
‘safe’, durable consumer goods companies can position their
products as ‘strong and durable’ etc

28. Positioning Strategy
• Value Proposition: value proposition means why should a
customer purchase the product of a company? The company
must try to explain the customers, the benefits of using their
products and how different their products are from the
competitor’s products
• USP: USP stands for Unique Selling Proposition. It is that
‘one’ feature of the product which makes it stand apart from
its substitutes. E.g.

29. Product Differentiation
• Product differentiation: product differentiation is a way to
tell the consumers as to how different your products are from
the competitors. Differentiation can be done in the following
ways:
• On the basis of quality, durability and performance [multiple
characteristics]
• On the basis of price
• On the basis of after sales service
• On the basis of product features
• On the basis of guarantee and warranty offered