SEGMENTATION, TARGETING
& POSITIONING
•Segmentation:
•The Process of dividing a market into different
subsets of consumers with common needs or
characteristics and selecting one or more
segments to target with a different marketing mix.
•Targeting:
Select one or more market
segments to enter
•Positioning:
Establish and Communicate the
unique benefits of the company’s
market offering
Homogeneous preferences exist
when consumers want the same things
Diffused preferences exist when
consumers want very different things
Clustered preferences expose
natural segments from groups with
shared preferences
The manufacturer/Producer produces a
customized product that meets the
requirements posted by different
customers.
For Example:
Laptop customization
Car customization
The producer and consumer are both
involved in the production of the final
product.
Customerization combines
operationally that allow consumers to
design the product and service offering of
their choice.
For Example:
You choose flowers along with the flower
vendor to make a bouquet of your choice.
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
Mass
Mass Marketing
Marketing
Same
Same product
product toto all
all consumers
consumers
(no
(no segmentation)
segmentation)
Segment
Segment Marketing
Marketing
Different
Different products
products to to one
one oror more
more segments
segments
(some
(some segmentation)
segmentation)
Niche
Niche Marketing
Marketing
Different
Different products
products toto subgroups
subgroups within
within segments
segments
(( more
more segmentation)
segmentation)
Micromarketing
Micromarketing
Products
Products to to suit
suit the the tastes
tastes of
of individuals
individuals or
or locations
locations
(complete
Vaishali Agarwal, Asst.(complete
Prof.
segmentation)
segmentation)
IBA-GN
Description
1. Needs-Based Group customers into segments based on similar needs and
Segmentation benefits sought by customer in solving a particular consumption
problem.
2. Segment For each needs-based segment, decide which demographics,
Identification lifestyles, and usage behaviors make the segment different and
special (actionable).
3. Segment Using predetermined segment attractiveness criteria (such as
Attractiveness market growth, competitive intensity, and market access),
establish the overall attractiveness of each segment.
4. Segment decide segment profitability.
Profitability
5. Segment For each segment, create a “value proposition” and product-price
Positioning positioning strategy based on that segment’s unique customer
needs and characteristics.
Geographic
Nations, states, climatic zone
regions or cities
Demographic
Age, gender, marital status,
family size and life cycle,
occupation, purchasing
capacity/income
Psychographic
Social class, lifestyle, or
personality
Buyer Behaviour
Purchase occasion, degree
of use and buyer’s attitude
Benefit & Volume
Purchase occasion, degree
of use and buyer’s attitude
Geographic Segmentation: The market is divided by location.
The theory behind this strategy is that people who live in the
same area share some similar needs and wants and that needs
and wants differ from those of people living in other areas.
Demographic Segmentation: Such as age, gender, marital
status, income, occupation and education, are most often used
as the basis for market segmentation.
Psychological Segmentation: Refer to the inner or intrinsic
qualities of the individual consumer. Consumer segmentation
strategies are often based on specific psychological variables.
For instance, consumers may be segmented in terms of their
motivations, personality, perceptions, learning and attitudes.
Sociocultural Segmentation: Sociological (group) and
anthropological (cultural) variables-that is sociocultural variables
provide further bases for market segmentation. For example
consumer markets have been successfully subdivided into
segments on the basis of stage in the family life cycle, social
class, core cultural values.
Use-related segmentation: An extremely popular and effective
form of segmentation categorizes consumers in terms of
product, service or brand usage characteristics, such as level of
usage, usage, level of awareness and degree of brand loyalty.
Usage-situation Segmentation: Marketers recognize that the
occasion or situation often determines what consumers will
purchase or consume. For this reason, they sometimes focus on
the usage situation as a segmentation variable.
Hybrid Segmentation approaches: Marketers commonly
segment markets by combining several segmentation variables
rather that relying on a single segmentation base.
Measurable
Measurable • Size, purchasing power, profiles
of segments can be measured.
Accessible
Accessible • Segments must be effectively
reached and served.
Substantial
Substantial • Segments must be large or
profitable enough to serve.
• Segments must respond
Differential
Differential differently to different marketing mix
elements & actions.
• Must be able to attract and serve
Actionable
Actionable the segments.
4
A group of people or
organizations for which an
organization designs,
implements, and maintains a
marketing mix planned to meet
the needs of that group, resulting
in mutually satisfying exchanges.
Company
Company
Marketing
Marketing Market
Market
Mix
Mix
A. Undifferentiated Marketing
Company
Company
Marketing
MarketingMix
Mix11 Segment
Segment11
Company
Company
Marketing Segment
Segment22
MarketingMix
Mix22
Company
Company
Marketing Segment
Segment33
MarketingMix
Mix33
B. Differentiated Marketing
Company Segment
Segment11
Company
Marketing
Marketing Segment
Mix Segment22
Mix
Segment
Segment33
C. Concentrated Marketing
4
Marketing approach that Advantages :
views the market as one Potential savings on
production and marketing
big market with no
costs
individual segments and
thus requires a single Disadvantages :
marketing mix. Unimaginative product
offerings
Company more
susceptible to competition
4
Advantages :
Concentration of resources
A strategy used Meets narrowly defined
to select one segment
segment of a Small firms can compete
Strong positioning
market for
targeting
Disadvantages :
marketing efforts.
Segments too small, or
changing
Large competitors may market
to niche segment
4
A strategy that chooses Advantages :
Greater financial
two or more well-defined
success
market segments and Economies of scale
develops a distinct
marketing mix for each. Disadvantages :
High costs
Cannibalization
Budget Car Segment – below 2.2lakhs
Compact Car Segment- b/w 3-4 lakhs
Family Car Segment- b/w 5-6 lakhs
Premium Car Segment- Around 7-8 lakhs
Super Luxury Saloon Segment
High Income/Elite Consumers
-Aurum and Royale (20,000-1 Lakh)
Middle Income/Price Conscious Consumers
-Exacta and Raga
Lower Income Consumers
-Earlier Timex and then Sonatta
4
5
Developing a specific marketing
mix to influence potential
customers’ overall perception of
a brand, product line, or
organization in general.
5
Positioning is the battle for a
place in the consumer’s mind.
Positioning is less what we do to
the product and more what we do to
the consumer’s perception of the
product.
5
The place a product, brand, or
group of products occupies in
consumers’ minds relative to
competing offerings.
5
A positioning strategy that some
firms use to distinguish their
products from those of
competitors.
5
Three conditions
The product must be truly different
The difference must lead to a
benefit to the customer
The difference must be visible to
the customer (through five senses)
5
Attribute
Attribute
Price
Price and
and Quality
Quality
Use
Use or
or Application
Application
Product
Product User
User
Positioning
Positioning
Product
Product Class
Class
Bases
Bases
Competitor
Competitor
Relative perceived cost
Value Equivalence line 5
A Maruti Baleno
B
Maruti Esteem
C
Maruti 800
Relative perceived value
5
Changing consumers’
perceptions of a brand
in relation to
competing brands.
5
5
5
Find any two TV advertisements that
you believe are targeted at a
particular psychographic segment.
How effective do you think each ad is
in terms of achieving its objective?
Why?