Module 3

Segmentation,
Targeting &Positioning
copyright©

Dr. Anupamaa Chavan

Objectives



Largest Automobile Brand
 Definition:
Market
Segmentation
‘Market segmentation consists of
taking the total heterogeneous market
for a product and dividing it into
several sub markets or segment each
of which tends to be homogeneous in
all significant aspects’

Thus, the customers in one group

should buy the product for the same
- purpose
- use
Rationale for Segmentation



 Better serving customers’ needs and wants

Up-selling across the customer journey

Higher Market Share

Importance
Targeted Communication

Sustainable customer relationships in all phases of customer life cycle

Absorption of purchasing power by price differentiation

Stimulating Innovation
 Bases of Market Segmentation

Kotler provides four classes of variables used in

segmenting consumer market:

Geographic

Demographic

Psychographic

Behavioral
 Geographical

 Segmentation of consumer based on factors like climate zone, continents/ country,

region, state, district, and urban/rural area, constitutes geographic segmentation

 Marketer, who operate globally, often segment the market segments the market by
continent/ country / region in the first instance, and then go for segmentation on other
bases.

 National markets within a country like India, often segment the market by region, state,
district and urban/rural area, in the first instance, and then go for segmentation on other
bases.
Demographic

 Segmentation of consumer based on variables such as race, religion, community,

language, age, stage in family cycle, gender, marital status, family size, occupation,
economic position/income/purchasing capacity level, and social status ,of the
consumer demographic segmentation

 Age & Lifecycle Stage: Based on age and lifecycle stage the segments can be: 1)
Infants 2) Child Market 3)Teen Market 4) Youth Market 5) Middle Aged Market
5)Elders Market

 Gender: On the basis of gender, the consumer market may be classified into male
market female market.

 Income: Companies design their products and services for particular social classes.
There are three social classes: 1 Upper classes 2. Middle classes 3. Lower class
 Demographic



Demographic

 Generation

 Gen Z born between 1995 and 2012

Gen Y born between 1977 and 1994 (Mellennials)
Gen X born between 1964 and 1978
Baby Boomers born between 1946 and 1964
Silent Generation born between 1925 and 1945

Race & Culture

Colgate for Kids, for Adults
Generational Birth Range Defining Features
Cohort

Gen Z 1995 – 2012 They tend to be ‘informed consumers’, and will often research and weigh up options
before making a buying decision, much less attached to specific brands, instead preferring
to shop around for the best deal, place high importance on brand ethics and corporate
responsibility, even more so than Millennials Out of all the generations, they’re the most
likely to shop via social media
Millennials 1979–1994 Raised with relative affluence, technologically plugged in and concerned with the
(Gen Y) environment and social issues, they also have a strong sense of independence and a
perceived immunity from marketing. Organic reach, WOM, online reviews,
Gen X 1964–1978 Sometimes seen as falling between the generational cracks, they bridge the
technological savvy of Gen Y with the adult realities of the baby boomers. Direct
appeals work best
Baby Boomers 1946–1964 Still largely in the prime of their consumption cycle, they embrace products
and lifestyles that allow them to turn back the hands of time.

Silent 1925–1945 Defying their advancing age, they maintain active lives and products and
generation marketing that help them to achieve that.
Psychographic Segmentation

 sychographic Segmentation groups customers according to their life-style and buying

psychology.

 Many businesses offer products based on the attitudes, beliefs and emotions of their target
market

 The desire for status, enhanced appearance and more money are examples of psychographic
variables.

 They are the factors that influence your customers' purchasing decision.

 In psychographic segmentation, elements like life style, attitude, self-concept

 and value system, form the base.

 A person’s pattern of interests, opinions, and activities combine to represent

 his or her lifestyle.

VALS Framework
V.A.L.S. Model (Values Attitude and Lifestyles)


Four groups with higher resources Four groups with lower resources.

• Innovators—Successful, sophisticated, active, “take-charge” • Believers—Conservative, conventional, and traditional people

people with high self-esteem. Purchases often reflect with concrete beliefs. They prefer familiar products and are loyal
cultivated tastes for relatively upscale, niche- to established brands.
oriented products and services.
• Strivers—Trendy and fun-loving people who are resource-
• Thinkers—Mature, satisfied, and reflective people motivated
constrained. They favor stylish products that emulate the
by ideals and who value order, knowledge, and responsibility.
purchases of those with greater material wealth.(Knock-off
They seek durability, functionality, and value in products.
market)
• Achievers—Successful, goal-oriented people who focus on
career and family. They favor premium products that • Makers—Practical, down-to-earth, self-sufficient people who like
demonstrate success to their peers. to work with their hands. They seek products with a practical or
functional purpose.(DIY)
• Experiencers—Young, enthusiastic, impulsive people who seek
variety and excitement. They spend a comparatively high • Survivors—Elderly, passive people concerned about change
proportion of income on fashion, entertainment, and loyal to their favorite brands.
and socializing.
 Psychographic Segmentation

 Social Class: Companion design their products and services for particular social classes. There are three
social classes: 1 Upper classes 2. Middle classes 3. Lower class

 Lifestyle: Knowledge of lifestyle can provide a very rich and meaningful picture of a person.

 It can indicate whether the person is interested in outdoor sports, shopping, culture, or reading.

 Lifestyle also can be used to define a segment empirically; this is often called psychographic (as opposed
to demographic) segmentation.

 Personality: It can include information concerning attitudes and personality traits.

Behavioral Segmentation
 The customer can also be divided into certain segments on the basis of their knowledge, attitude, use, or
response to a product.

 Such behavioural variables are discussed below

 Occasions : (Marriages, festival occasions)

 Benefits sought : (Colgate- White teeth stops bad breath, Cibaca Provides Therapeutic benefits, Vicco
vajradanthi and neem gives ayurvedic benefit)

 User Status: (Ex-users, first users, regular users, Potential users)

 Usage rate: (Light, Medium, and heavy user segments)

 Loyality status: (Hard core loyals, Split loyals(Two or Three brands), Shifting Loyals (Shift from one brand to
another),

 Switchers’ (No loyalty to any brand))

 Attitude towards Product: Customers are divided into five groups(Enthusiastic, Positive, Indifferent, Negative
and Hostile)
Exercise:
Explain the bases of segmentation with the help of examples.

• [Link]: Region, Country

• 2. Demographic: Age, Gender, Income
• 3. Psychographic: Values, Attitude, Lifestyle
• 4. Behavioral: User Status, User Rate, Occasions
Effective Segmentation Criteria/Attributes of effective
Segmentation

Exercise – Titan Case Study



 Market Targeting


Levels of Targeting/Segmentation


Levels of Targeting/Segmentation
Identify the levels of Targeting

Gucci bags
Evaluating & Selecting the Target Market/Market
Segments
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
STP marketing: STP marketing examples ([Link])


Differentiation


 competitive advantage seller

Differentiation
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
 Product Differentiation
TA N G I B L E P R O D U C T AT T R I B U T E S I N TA N G I B L E P R O D U C T AT T R I B U T E S

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Positioning

Task Involved in Positioning

 [Link]
Task Involved in Positioning
1. Choosing a Competitive Frame of Reference

▪
▪
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
Task Involved in Positioning

b. Analysing Competition
Task Involved in Positioning
2. Identifying Potential Points of Difference and Points of Parity
Points of Difference (PODs)

1. Desirable to consumers
2. Deliverable by the company
3. Differentiating from competitors
Task Involved in Positioning
Points of Parity (POPs)

1. Category POP -
2. Correlational POP – price and quality
3. Competitive POP – competitors POD is your POP
 Multiple frames of reference:



Straddle Positioning



 Straddle Positioning



McDonald’s and Burger King

 health food restaurants and

cafés


 Task Involved in Positioning

3. Choosing Specific POP & POD

 sustainable competitive advantage

 perceptual maps


Hypothetical Perceptual Maps –
 Task Involved in Positioning
 4. Brand Mantra : Role


brand


 Task Involved in Positioning
 Brand Mantra:

 Designing a Brand Mantra

Dr. Anupamaa Chavan 51
 Establishing a Brand Positioning :