Marketing Management Notes
1. Market Segmentation
Definition:
Market segmentation is the process of dividing a broad consumer or business market into sub-groups
of consumers (segments) based on shared characteristics.
Purpose:
To identify groups of consumers with similar needs and preferences so marketing strategies can be
tailored.
Bases of Market Segmentation: - Geographic: Location, region, climate. - Demographic: Age, gender,
income, education, family size. - Psychographic: Lifestyle, personality, social class, values. - Behavioral:
Usage rate, brand loyalty, benefits sought, purchase occasion. - Firmographic (B2B): Industry, company
size, location, business model.
Requirements for Effective Segmentation: 1. Measurable: Segment size and characteristics can be
quantified. 2. Accessible: Segment can be reached through marketing channels. 3. Substantial:
Segment is large enough to be profitable. 4. Differentiable: Segments respond differently to marketing
strategies. 5. Actionable: Company can serve the segment effectively.
Importance: - Better customer understanding
- Focused marketing
- Efficient resource allocation
- Competitive advantage
- Customer retention
2. Evaluating Market Segments
Definition:
The process of assessing each identified segment to determine its attractiveness and potential for the
company’s products or services.
Criteria for Evaluation: - Segment Size & Growth: Number of potential customers and growth rate. -
Structural Attractiveness: Competition, substitutes, buyer/supplier power. - Company Objectives &
Resources: Fit with company goals and capabilities. - Profitability: Revenue potential minus cost to
serve. - Accessibility: Ease of reaching and serving the segment.
Methods: - Qualitative: Non-numeric factors like brand fit and competition. - Quantitative:
Measurable factors like market size, expected sales, profit margins.
Targeting Outcomes: - Single Segment: Focus on one niche. - Multi-Segment: Serve multiple
segments with tailored offerings. - Mass Market: Treat entire market as homogeneous.
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3. Targeting and Market Coverage Strategies
Targeting: Selecting one or more segments to serve effectively.
Strategies: - Undifferentiated Marketing (Mass Marketing): Single marketing mix for entire market. -
Single Segment Marketing (Concentrated/Niche Marketing): Focus on one segment. - Multi-
Segment Marketing (Differentiated Marketing): Different marketing mixes for multiple segments.
4. Positioning
Definition: Creating a distinct image of a product or brand in the minds of target customers.
Steps to Develop a Positioning Strategy: 1. Identify competitive advantages. 2. Select the key
competitive advantage. 3. Develop a positioning statement:
- “For [target segment], [brand] is the [concept] that [point of difference].” 4. Communicate and deliver the
position through the marketing mix. 5. Monitor and adjust over time.
5. Summary Table: Targeting & Positioning
Concept Explanation
Targeting Selecting market segment(s) to serve
Undifferentiated
Single mix for the entire market
Marketing
Single Segment
Focus on one segment
Marketing
Multi-Segment Marketing Different mixes for multiple segments
Positioning Creating a unique image in consumers’ minds
Steps: Identify advantages → Select → Statement → Communicate →
Positioning Strategy
Monitor