Market Segmentation,
Targeting & Positioning
Umer Farooq Roll # 81
(GL) Roll #03
Ayesha Ismail Roll # 90
Saleem Arif Roll # 41
Mamoona Abrar Roll # 89
[Link] Roll #51
Nadia Shoukat Roll # 14
Tanzeela Aziz
Learning Objectives
Market Segmentation
Target Marketing
Market Positioning
Major bases for segmenting
consumer & business markets.
Learning Objectives
How companies identify attractive
market segment & choose a target
marketing strategies.
How companies position their products
for maximum competitive advantage in
the market place.
Market Segmentation
Tanzeela Aziz
MBA2005-14
Market Segmentation
Dividing a market into smaller
groups of buyers with distinct
needs , characteristics ,or
behavior who might require
separate products or marketing
mixes.
Target Marketing
The process of evaluating each
market segment’s
attractiveness and selecting
one or more segments to
enter.
Market Positioning
Arranging for a product to
occupy a clear, distinctive and
desirable place relative to
competing products in the
minds of target consumers.
Segmenting Consumer
Markets
The major variables that might be
used in segmenting consumer
market are
Geographic
Demographic
Psychographic
Behavioral
Geographic
Segmentation
Dividing a market into
different geographical units
such as nations , states,
regions, cities or
neighborhoods.
Geographic
Segmentation
World region or Country:-
Pakistan, India, America etc.
Country Regions:-
Cities:-
Density:-
Urban, suburban, rural.
Climate:-
Northern, southern.
Demographic
Segmentation
Dividing a market into group
based on demographic
variables such as age, sex,
family size, family life cycle,
income, occupation, education,
religion, race & nationality.
Demographic
Segmentation
The consumer needs, wants & usage
rates often vary closely with
demographic variables.
Easier to measure
Even when market segments are
defined on some other bases their
demographic characteristics must be
known.
Age & life-cycle
segmentation
Dividing a market into different age
& life-cycle groups.
Different age groups are
under 6 6-11 12-19 20-34
35-49 50-64 65+
Family Life-cycle Groups
Bachelors
Married with no children
Married with children
Older couples
Gender Segmentation
Dividing a market into different
groups based on gender.
Income segmentation
Dividing a market into
different income groups
Lower income group
Middle income group
Upper class
Segmenting Variables
Psychographic Segmentation
Behavioral Segmentation
Using Multiple Segmentation
Bases
Ayesha Ismail
MBA2005-03
Psychographic
Segmentation
Dividing the market into
groups according to social
class, life style or
personality
characteristics.
Lifestyle
Achievers
Strivers
Survivors
Social Class
Lower lowers Upper lowers
Working class
Middle class
Upper middles
Upper uppers Lower uppers
Personality
Compulsive
Authoritarian
Gregarious
Ambitious
Behavioral
Segmentation
Dividing the market into
groups on the basis of
consumer knowledge,
attitude, use or response
to a product.
Behavioral Segmentation
Occasion Benefit
Segmentation Segmentation
User Status Usage Rates
Loyalty Status Readiness
Attitude Stage
Towards
Product
Occasion Segmentation
Dividing the market into
groups according to
occasions when buyers get
the idea to buy, actually
make their purchases, or
use the purchased item.
Benefit Segmentation
Dividing the market into groups
according to the different
benefits that consumers seek
from the product.
Procter &Gamble has identified different
detergent segments.
User Status
Dividing the market into the
groups according to user status .
Non-users
Ex-users
Potential users
First time users
Regular users
Usage Rates
Market can be segmented
according to usage rate.
Light
Medium
Heavy
Fast food industry has heavy users only
20% but eat up about 60% of all food
served.
Loyalty Status
Market can be segmented
according to consumer
loyalty.
Consumers can be loyal to
Brands
Stores
Companies
Loyalty Status
Consumer can be grouped on the
basis of loyalty as
Somewhat loyal
Completely loyal
Non loyalty
Using Multiple
Segmentation Bases
One good example of multi-variable
segmentation is “Geodemographic”.
One of the leading life style
segmentation is the “PRIZM” they
collect the transaction data and life
style information to paint the precise
picture of consumer and its needs.
Segmenting Business Markets
Segmenting International Markets
Requirement for Effective
Segmentation
M. Saleem Arif
MBA2005-90
Segmenting Business
Markets
Major variables used for segmenting
business markets are:
Demographic
1. Industry: Which industries should we
serve?
2. Company size: What size companies
should we serve?
3. Location: What geographical location
should we serve?
Segmenting Business
markets (contd.)
Operating Variables
4. Technology: What customer technologies should
we focus on?
5. User or nonuser status: Should we serve heavy
users, medium users, light users, or nonusers?
6. Customer capabilities: Should we serve
customers needing many or few services?
Segmenting Business
markets (contd.)
Purchasing Approaches
7. Purchasing-function organization: Should we serve
companies with highly centralized or decentralized
purchasing organizations?
8. Power structure: Should we serve companies that
are engineering dominated, financially dominated,
and so on?
9. Nature of existing relationships: Should we serve
companies with which we have strong relationships
or simply go after the most desirable companies?
10. General purchase policies: should we serve
companies that? Service contacts? Systems
purchases? Sealed bidding?
11. Purchasing criteria: should we serve companies
that are seeking quality? Service? Price?
Segmenting business
Markets (contd.)
Situational Factors
12. Urgency: Should we serve companies
that need quick sudden delivery or
service?
13. Specific application: Should we focus
on certain applications of our product
rather than all applications?
14. Size of order: Should we focus on
large or small orders?
Segmenting Business
Markets (contd.)
Personal Characteristics
15. Buyer-seller similarity: should we serve
companies whose people and values are
similar to ours?
16. Attitudes toward risk: Should we serve
risk-taking or risk-avoiding customers?
17. Loyalty: Should we serve companies that
shoe high loyalty to their suppliers?
Almost every company serves at
least some Business Markets.
American Express
Many companies set up separate
system for dealing with larger or
multiple location customers.
Exxon Mobile
IBM
Segmenting
International
Markets
Companies can Segment
International Market using one
or a combination of several
variables.
Geographic Location
Economic Factors
Cultural Factors
Political & Legal Factors
Requirement for
effective segmentation
Measurable: the Size, Purchasing
Power and Profiles of the
Segment can be measured.
Accessible: the market Segments
can be Effectively reached and
served.
Substantial: The market
Segments are large or Profitable
enough to serve.
Differentiable: The Segments are
Conceptually distinguishable.
Actionable: Effective Program can
be designed for attracting and
serving the segments.
Target Marketing
Mamoona Abrar
MBA2005-41
Target Marketing
The process of evaluating each
market segment’s
attractiveness & selecting
one or more segments to
enter
Evaluating Marketing
Segments
Segment size and growth
Segment structural attractiveness
Company objectives and resources
Target Market
A set of buyers sharing common
needs or characteristics that
the company decides to serve
Levels of Target
Marketing
Undifferentiated Marketing
Differentiated Marketing
Concentrated Marketing
Undifferentiated
Marketing
A market-coverage strategy in
which a firm decides to ignore
market segment differences
& go after the whole market
with one offer.
Differentiated Marketing
A market-coverage strategy in
which a firm decides to target
several market segments and
designs separate offers for
each.
American Express
Green cards
Gold cards
Corporate cards
Black cards
Concentrated Marketing
A market coverage strategy in
which a firm goes after a
large share of one or a few
segments or niches.
Micro Marketing
M. Imran
MBA2005-89
Connect with the customer
who is ready to connect with
you.
Micro Marketing
The practice of tailoring
products and marketing
programs to the needs and
wants of specific individuals
and local customer groups.
Types of Micromarketing
Local Marketing
Tailoring brands and promotion to the
needs and wants of local customer
groups cities, neighborhoods, and
specific stores.
Local Marketing
Drawbacks
Can drive up manufacturing and marketing
cost by reducing economies of scale.
Create logistics problems as companies try
to meet the varied requirements of different
regional and local market.
Brand’s overall image my be diluted if the
product and message vary at different
localities.
Local Marketing
Benefits
Helps a company to market more
effectively in the face of pronounced
regional and local differences in
demographics and style.
Meets the needs of company's first-line
customer.
Individual Marketing
Tailoring products and
marketing programs to needs
and preference of individual
customer also labeled as
markets of-one, customized
marketing and one-to-one
marketing.
Mass Customization
Mass customization is the process
through which firms interact one-to-
one with masses of customers to
create customer-unique value by
designing products and services
tailor-made to individual needs.
Choosing a Target-
Marketing Strategy
requires consideration of :
Company resources
The degree of product variability
Products life-cycle stage
Market variability
Competitors’ marketing strategies
Socially Responsible
Target Marketing
Some segments are at special risk :
• Children
• Inner-city minorities consumers
• Internet shoppers
Controversy occurs when the
methods used are questionable.
Positioning for
Competitive Advantage
Nadia Shoukat
MBA2005-51
Positioning
The way the product is defind
by consumers on important
attributes ---- The place the
product occupies in
consumers’ minds relative to
competing products.
Positioning Maps
Positioning maps are a useful tool
for giving you a graphical idea of
where your product stands vis-à-
vis other products in the market
at a given time.
Positioning Map: Large Luxury
SUVs
Range rover
High Lincoln Navigator
Escalade
Hummer H1
Hummer H2
Price Lexus LX470 Land Cruiser
Low
Luxury Performance
Orientation
Choosing a Positioning
Strategy
The positioning task consist of three
steps.
Identify Possible Competitive
Advantages
Choosing the Right Competitive
Advantages
Selecting an overall Positioning
Strategy
Identify Possible
Competitive Advantages
An advantage over competitors gained
by offering consumers greater value
either through lower prices or by
providing more benefits that justify
higher prices.
A company or market offer can be differentiated along
the lines of Product, Services, Channels, People or
Image
Choosing the Right
Competitive Advantages
How many differences to promote?
Unique Selling Proposition :USP
USP is to promote only one benefit to
the target market for each brand
and stick to it.
Positioning Errors to
Avoid
Under positioning:-Buyers have only a
vague idea of the brand.
Over Positioning:-Buyers may have
too narrow an image of the brand.
Confused Positioning:- Leaving buyers
with a confused image of a company.
Choosing the Right
Competitive Advantages
Which differences to promote?
A company should carefully select the way in which
it will distinguish itself from competitors.
A difference is worth establishing to the extent that
it satisfied the following criteria.
Important Distinctive
Superior Communicable
Preemptive Affordable
Profitable
POSITIONING
Selecting An Overall
Positioning Strategy
M. Umar Farooq
MBA2005-81
Value Proposition
The full Positioning of a brand.
In simpler words, the full mix
of benefits upon which a
brand is positioned.
Possible
Value
Price
Propositions
More The Same Less
More More for More
Less The Same More for More the Same for Less
The Same
for Less
i f e ne B
st
Less for
Much
Less
More for More
Proposition
Providing the most upscale
product or service and
charging a higher price to
cover the higher costs.
More for The Same
Proposition
Providing a brand offering
comparable or even better
quality to that of competitor/s’
upscale one but at a Lower or
The Same Price.
The Same for Less
Proposition
Providing equivalent quality
products at a Lower Price.
Less for Much Less
Proposition
Providing lower performance
or quality products as
required by the consumers at
a Much Lower Price.
More for Less
Proposition
Providing even better or the
best products or services
compared to the competitor/s
at Lower or the Lowest
Prices.
Developing a Positioning
Statement
A Positioning Statement summarizes
company or brand positioning by targeting
the segment, developing a need, delivering
the brand name and its concept, and
pointing out the competitive advantage or
difference.
Communicating and
Delivering
the Chosen Position
Keeping a permanent channel to
Communicate the desired position to
target consumers and taking actions in
order to Deliver the position the
company wants to build relative to
competing products.