Segmentation, Targeting, &

Positioning
Session 16 - 20
Value-driven Marketing Strategy
Segmentation
Segmentation Scope

• The division of the total market into

smaller, relatively homogeneous groups
Steps for Segmentation

Select a Choose Profile and Design and

market for criteria for Select analyze Select target implement
descriptors markets marketing
study segmentation segments
mix
Criteria for Segmentation
Demographic Segmentation
• Based on variables such as age, life-cycle stage, gender,
income, occupation, education, religion, ethnicity,
and generation

• Cohort effect - a tendency among members of a generation to

be influenced and drawn together by significant events
occurring during their key formative years
Age
Gender
Gendered Marketing
Income
Geographic Segmentation
• Dividing a market into different geographical units,
such as nations, states, regions, counties, cities, or
even neighborhoods

• Segmenting based on location, time-zone, climate,

cultural preferences, etc

• Hyperlocal social marketing: Mazda uses

personalized ads for customers within a certain
radius of a dealer
Psychographic Segmentation

• Dividing a market into different segments based on lifestyle

or personality characteristics
Loews - A luxury-
boutique hotel chain
 Behavioral Segmentation

Occasion: Dermi-cool in Benefits-sought: Something for User-rate: Heavy-user, moderate-user,

summers each skin-type and light-user segments
Occasion

Dividing the market into segments according to occasions when buyers get the idea to buy,
actually make their purchase, or use the purchased item.
 Benefits sought

Dividing the market into

segments according to the
different benefits that
consumers seek from the
product.

Schwinn cycles
Usage rate
What is the segmentation base?
• Festival spenders - ?

• Seasonal user - ?

• Health conscious - ?

• Gen Z - ?

• Sub-urban - ?
Typical Shopper Segments in India
Shopper Segment Description (Quote) Key Question
“I am very particular about the brands and products I buy for my
Discerning Shopper Is it good enough?
family. Offers are necessary but they have to be relevant to me.”
“If I find a good offer I will buy it even if I don’t need that product at Is it on special
Bargain Hunter
that time.” offer?
“The store that you shop at reflects your status… when I tell my
Image Shopper Is it up market?
friends where I shop, they need to feel that I have some class…”
“I juggle so many things during the day, I want things that make my
Convenience Shopper Is it easy?
life easier, even if it means paying a little more.”
“I like visiting various stores to see what’s the latest… I get a high
Competitive Shopper Is it new?
when my friends ask my opinion of new launches.”
“My life today is better than it was yesterday, and will be better
Is it better than
Progressive Shopper tomorrow… my shopping reflects this… I can afford so much more
before?
now…”
Segment the Breakfast cereals market
Segment the Car Market
Segment the market for 'salt'
Segmentation Basis Segments
- Urban consumers → branded, packaged, value-added salts (iodized, low-sodium,
Himalayan pink) - Rural consumers → affordable loose/basic iodized salt - Regional
Geographic
preferences → rock salt, black salt, coarse vs. fine grain - International markets →
exotic salts (Himalayan pink, artisanal sea salt)
- Income level: low-income (affordability), middle-income (branded iodized), high-
income (premium/gourmet) - Age: younger/elderly prefer low-sodium/fortified -
Demographic
Family size: large families (bulk packs), small families/individuals (small/premium
packs)
- Health-conscious → low-sodium, fortified salts - Traditional/cultural → black salt,
Psychographic rock salt for rituals/ayurveda - Lifestyle-oriented → gourmet/organic salts - Price-
sensitive → cheapest options
- Usage: daily cooking (staple), occasional specialty (fasting, fine dining) - Benefits
Behavioral sought: affordability, fortification, health, taste, prestige - Brand loyalty: branded
(Tata, Aashirvaad) vs. loose/local salt buyers
Consumer Persona
A consumer persona is a fictional
representation of your ideal customers
that helps you and your team better
visualize and communicate to your
target audience
Consumer Personas
B2B Segmentation
• Bases of segmentation -

1. Geographic – Domestic/international, Asia/Europe/Americas, Rural/urban

2. Type of organization - carpet producer, for example, could segment
potential customers into several groups, such as automobile makers, home
builders, commercial carpet contractors (firms that carpet large commercial
buildings), carpet wholesalers, and retail carpet outlets.
3. Size of customer - Organization's size (revenue, number of employees etc)
4. Product use - Computers, for instance, are used for engineering purposes,
basic scientific research, and business operations such as word processing,
accounting, and telecommunications.
Segment the Market for a Vegetable producer
who wants to only sell B2B
Segmentation Basis Segments
- Local markets - Regional markets - National markets - Export
Geographic
markets
- Retail chains & supermarkets - Food processors - Hotels -
Type of Organization Restaurants & Catering (HoReCa) - Wholesalers/Distributors -
Institutional buyers

- Small buyers (local restaurants, caterers) - Medium buyers

Customer Size (regional supermarkets, mid-sized processors, wholesalers) - Large
buyers (national retail chains, big food processors)

- Fresh consumption (restaurants, hotels, institutions) - Processing

(food manufacturers) - Repackaging & Distribution (wholesalers,
Customer Needs (Product Use)
retailers) - Specialty/Organic needs (premium restaurants, organic
stores, export markets)
Marketers need to answer..

• Who are the buyers?

• How can we reach them? (And through what media?)

• Where are they located? Where do they purchase?

• What are their interests and behaviours? What do they buy or like?
Criteria for Effective Segmentation
(ADAMS)
• Measurability - The size, purchasing power, and profiles of the segments can be
measured

• Accessibility - Segments can be effectively reached and served

• Substantiality - Segments are large or profitable enough to serve

• Differentiability - Segments are conceptually distinguishable and respond differently to

different marketing mix elements and programs

• Actionability - Effective programs can be designed for attracting and serving the
segments.
Evaluate and Assess the Segments
1. Sales potential

2. Competitor analysis

3. Cost analysis

Could be any other criterion that you have in mind...

Market Targeting – Which one will you target?
Segment Size of the Avg sales per Distance from Total profit Profit per
segment cust store cust

1 526 $48 5 miles $6990 $13.42

2 466 $46 10 miles $9142 $19.63

3 60 $50 5 miles $1022 $17.04

4 866 $30 25 miles $6137 $7.09

5 4 $119 32 miles $177 $44.46

6 78 $87 10 miles -$1102 -$14.13

Target Market Strategy
Different types of Targeting
1. Undifferentiated/mass marketing – What is common among
consumers?

2. Differentiated marketing - targets several market segments and

designs separate offers for each
- Tata clothing brands – Westside (affordable luxury), Zudio
(affordable segment), Taneria (ethnic wear)
Burkini
3. Niche marketing - a firm goes after a larger share of one or a
few smaller segments or niches
- Market for damaged laser pointer?

4. Micromarketing - Tailoring products and marketing programs

to the needs and wants of specific individuals and local
customer segments
Who are you Targeting?