7-1
MARKET SEGMENTATION,
TARGETING AND POSITIONING
Shakeel Ahmed Ansari
PhD Scholar
Department of Public Administration
University of Karachi
7-2
STP is used to identify potential customers or niche markets
that can be as narrow as a certain demographic or as broad
as specific issues or needs.
It is used to discover groups of people who have the same
need or want to fulfill the same need or want.
Steps in Segmentation, 7-3
Targeting, and Positioning
6. Develop Marketing
Mix for Each Target Segment Market
5. Develop Positioning Positioning
for Each Target Segment
4. Select Target
Segment(s)
Market
3. Develop Measures Targeting
of Segment Attractiveness
2. Develop Profiles
of Resulting Segments
1. Identify Bases Market Segmentation
for Segmenting the Market
Step 1. Market Segmentation 7-4
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)
Step 1. Market Segmentation 7-5
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
7-6
Using Multiple Segmentation
Bases: Geodemographic
Step 1. Market Segmentation 7-7
Bases for Segmenting Business Markets
Personal Demographics
Characteristics
Bases
for Segmenting
Situational Business Operating
Factors Markets Characteristics
Purchasing
Approaches
Step 1. Market Segmentation 7-8
Bases for Segmenting International Markets
Industrial Markets
Political/
Geographic Economic
Legal
Cultural Intermarket
7-9
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.
Step 2. Market Targeting 7-10
Evaluating Market Segments
• Segment Size and Growth
– Analyze sales, growth rates and expected profitability.
• Segment Structural Attractiveness
– Consider effects of: Competitors, Availability of Substitute
Products and, the Power of Buyers & Suppliers.
• Company Objectives and Resources
– Company skills & resources relative to the segment(s).
– Look for Competitive Advantages.
Step 2. Market Targeting 7-11
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
Step 2. Market Targeting 7-12
Choosing a Market-Coverage Strategy
Company
Resources
Product
Variability
Product’s Stage
in the Product Life Cycle
Market
Variability
Competitors’
Marketing Strategies
Step 3. Positioning for Competitive 7-13
Advantage
• Product’s Position - the place the product
occupies in consumers’ minds relative to
competing products; i.e. Pepsi on “sports”.
• Marketers must:
– Plan positions to give products the greatest advantage
– Develop marketing mixes to create planned positions
7-14
Step 3. Positioning for Competitive
Advantage: Strategies
Product Product
Class Attributes
Away from Benefits
Competitors H
G
Offered
C
D
Against a E
B
Usage
F
Competitor Occasions
Users
7-15
Steps to Choosing and Implementing
a Positioning Strategy
• Step 1. Identifying a set of possible
competitive advantages: Competitive
Differentiation.
• Step 2. Selecting the right competitive
advantage.
• Step 3. Effectively communicating and
delivering the chosen position to the
market.
Developing Competitive 7-16
Differentiation
Product Service
Areas for Competitive
Differentiation
Personnel Image
Selecting the Right Competitive 7-17
Advantages
Important
Profitable Criteria Distinctive
for
Determining
Which
Differences
Affordable to Superior
Promote
Preemptive Communicable
7-18