Segmentation
Targeting Positioning
Steps in Market Segmentation, Targeting, and Positioning
Segmentation Targeting Positioning 5. Identify possible positioning concepts for each target segment 6. Select, develop, and communicate the chosen positioning concept
1. Identify segmentation variables and segment the market 2. Develop profiles of resulting segments
3. Evaluate attractiveness of each segment 4. Select the target segment(s)
Segmentation
Basic Market-Preference Patterns
(a) Homogeneous preferences (b) Diffused preference s (c) Clustered preferences
Comfort
Comfort
Time
Time
Comfort
Time
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) Micro Marketing Products to suit the tastes of individuals and locations (complete segmentation) Local Marketing
Tailoring brands/ promotions to local customer groups
Individual Marketing
Tailoring products/ programs to individual customers
Steps in the Market Segmentation
Determine Market Boundaries
Decide Which Segmentation Variables to Use Collect and Analyze Segmentation Data Develop a Profile of Each Segment Target Segments to be Served
Design a Marketing Plan
Effective Segmentation
Measurable
Substantial
Size, purchasing power, profiles of segments can be measured. Segments must be large or profitable enough to serve. Segments can be effectively reached and served. Segments must respond differently to different marketing mix elements & actions.
Accessible
Differential
Actionable
Must be able to attract and serve the segments.
Bases for Segmenting Business Markets
Geographic
Region, City or Metro Size, Density, Climate
Demographic
Age, Gender, Family size and Life cycle, Race, Occupation, or Income ...
Psychographic
Lifestyle or Personality
Behavioral
Occasions, Benefits, Uses, or Attitudes
Segmenting Business MarketsContd.
Personal Characteristics
Demographics
Situational Factors
Bases for Segmenting Business Markets
Operating Characteristics
Purchasing Approaches
Targeting...
Evaluating Market Segments
Segment Size and Growth
- Analyze sales, growth rates and expected profitability for various segments.
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.
Five Patterns of Target Market Selection
Single-segment concentration M1 M2 M3 P1 P2 P3 P1 Selective specialization M1 M2 M3 P1 P2 P3 Market specialization M1 M2 M3 Full market coverage M1 M2 M3 P1 P2 P3 Product specialization M1 M2 M3
P2
P3
P = Product M = Market
P1 P2 P3
Market Coverage Strategies
Company Marketing Mix A. Undifferentiated Marketing Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3 B. Differentiated Marketing Segment 1 Company Marketing Mix Segment 2 Segment 3 C. Concentrated Marketing Segment 1 Segment 2 Segment 3 Market
Market Coverage Strategies Contd.
Undifferentiated Marketing
- Ignores the segment differences, and targets the entire market with one offer. - Mass Distribution & Mass Advertising, trying to leave an image on consumers mind. - Low costs involved in R&D, Production, Inventory, Transportation, Marketing Research, Advertising & Product Management.
Differentiated Marketing
- Different products for different segments e.g. Wipro - Boosts Sales. But higher costs are involved in all areas, from product manufacturing to delivery.
Positioning...
So, what exactly is Positioning?
Positioning, per se is the act of designing the companys offering and image to occupy a distinctive place in the mind of the target market.
So, what exactly is Positioning? Contd
In a nutshell, Positioning is not what you do to a product.. Positioning is what you do to the mind of the prospect!!
Product Positioning consists of 3 steps:
Identifying a set of potential competitive advantages. Selecting the right one(s). Effective signaling of the positioning concept to the target segment(s).
The BCG Competitive Advantage Matrix
Number of Approaches to Achieve Advantage
Few Many
Large Size of the Advantage
Volume
Specialized
Small
Stalemated
Fragmented
Method for Competitive Advantage Selection
Competitive Advanatage Company Standing Competitor Standing Importance of improving Standing (H-M-L) Affordability and Speed Competitors ability to Improve Standing (H-M-L) Recommended Action
(1-10)
(1-10)
(H-M-L)
Technology
HOLD
Cost
MONITOR
Quality
MONITOR
Service
INVEST
Major positioning errors to avoid...
Under positioning
- Buyers see the company just as any other company.
Over positioning
- Buyers may see the company too narrowly.
Confused positioning
- Buyers may have a confused image of the company.
Doubtful positioning
- Too many product features claimed by the company, leaves the buyers skeptical.
Positioning Strategies.. (by Ries & Trout)
Strengthen & Leverage current position in the minds of the consumer.
Search for a new un-owned position valued by enough customers & grab it. De-position/Re-position the competition. Exclusive Club strategy.
Last but not least, Psychological Positioning must be augmented by Real Positioning. Its not just a mind game after all!!
Case Study
Reliance Info-Comm
Segmentation
Segmentation Variables
Usage,Population Density,Age,Income etc.
Segmentation Profiles
Usage: High, Economy, Enterprise Population: Mega polis, Metros,Townships
Targeting & Positioning
Product/ Market
Enterprise
High Usage
Economy
Enterprise Data Terminal
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The End