SEGMENTING, TARGETING

& POSITIONING

SegmentationSegmentation - grouping consumers by some

criteria, such that those within a group will respond similarly to a marketing action and those in a different group will respond differently.

SegmentationSegmentation means dividing the potential

users/market on the basis of criteria like economic status, region, ethnicity or lifestyles

A large identifiable group within a market with similar wants, purchasing power or buying habits.

segment would display similar buying behaviour

Need for SegmentationTo serve the ultimate user in a better way.

To improve targeting the customer.

Easy decision making.

Saving of recourses & time

Market Segmentation & Brand Positioning In Indian Passenger Car Industry

Luxury

Mid size Family

Economy

Mercedes BenzeBMW

Honda CivicToyota Corolla

IndigoOpel Corsa

Santro Swift

Zen,AltoMaruti 800 cc

Steps in Segmentation, Targeting, and Positioning

1. Identify Basesfor Segmenting the Market

2. Develop Profilesof Resulting Segments

3. Develop Measuresof Segment Attractiveness

4. Select TargetSegment(s)

5. Develop Positioningfor Each Target Segment

6. Develop MarketingMix for Each Target Segment Market

Positioning

MarketTargeting

Market Segmentation

Step 1. Market SegmentationLevels of Market Segmentation

Mass MarketingSame product to all consumers

(no segmentation)

Segment MarketingDifferent products to one or more segments

(some segmentation)

MicromarketingProducts to suit the tastes of individuals or locations

(complete segmentation)

Niche MarketingDifferent products to subgroups within segments

( more segmentation)

Step 1. Market SegmentationBases for Segmenting Consumer Markets

Geographic

DemographicAge, gender, family size and life cycle, or income

PsychographicSocial class, lifestyle,

or personality

BehavioralOccasions, benefits, uses, or responses

Nations, states, regions or cities

Using Multiple SegmentationBases: Geodemographics

Step 1. Market SegmentationRequirements for Effective Segmentation

• Size, purchasing power, profiles of segments can be measured.

• Segments must be effectively reached and served.

• Segments must be large or profitable enough to serve.

Measurable

Accessible

Substantial

Differential

Actionable

• Segments must respond differently to different marketing mix elements & actions.

• Must be able to attract and serve the segments.

Step 2. Market TargetingMarket Coverage Strategies

Segment 1

Segment 2

Segment 3

Segment 1

Segment 2

Segment 3

CompanyMarketing

Mix

CompanyMarketing

Mix

CompanyMarketing Mix 1

CompanyMarketing Mix 2

CompanyMarketing Mix 3

Market

A. Undifferentiated Marketing

B. Differentiated Marketing

C. Concentrated Marketing

TARGETING Choosing one or more of the customer

segments whom we plan to serve.

Whether the segments size, growth, profitability and risk are favourable .

co’s overall, long-term objectives ,company has the requisite resources and competencies to serve the chosen segment.

5 patterns of target market selectionSingle segment concentration-Concentrate ting on

specialized product , distribution,& promotion.Full market coverage-firm attempts to serve all customer

groups with all products they might needHUL's Project Shakti Peddakaparthy village 65 kms from Hyderabad

The vision is ambitious: to create by 2010 about 11,000 Shakti entrepreneurs covering one lakh villages and touching the lives of 100 million rural consumers.

5 patterns of target market selectionMarket specialization-Concentrates on serving many

needs of a particular customer group.

Selective specialization - Selecting a number of segments. Movie Launch in metro cities

Pears has traditionally operated in the skin repair and maintenance segment, and within that, it has been primarily in

the moisturising area where glycerine leaves the silk soft. We are looking at extending the Pears equity to new people, those

concerned about germs and the level of cleansing," says Rampal. Carrying the baseline, `Innocent Beauty', Pears changed its

advertising agency from JWT to Mc Cann Erickson last year. "The new commercial will be based on the usage of the brand within a

family with kids, who tend to collect germs," says Rampal.

Product specialization-Firms make a certain product that it sells to several segments.

Step 3. Positioning for Competitive Advantage

Product’s Position - the place the product occupies in consumers’ minds relative to competing products; i.e. Volvo positions on “safety”.

Marketers must:Plan positions to give products the greatest

advantageDevelop marketing mixes to create planned

positions

Step 3. Positioning for Competitive Advantage: Strategies

Against aCompetitor

UsageOccasions

Away fromCompetitors

ProductAttributes

ProductClass

BenefitsOffered

Users

B

A

ED

CHG

F

Steps to Choosing and Implementing

a Positioning Strategy

Step 1. Identifying a set of possible competitive advantages: Competitive Differentiation.

Step 2. Selecting the right competitive advantage.

Step 3. Effectively communicating and delivering the chosen position to the market.

Developing Competitive Differentiation

Product Service

Personnel Image

Areas for CompetitiveDifferentiation

Selecting the Right CompetitiveAdvantages

Criteriafor

DeterminingWhich

Differencesto

Promote

Affordable Superior

Profitable

Preemptive

Distinctive

Important

Communicable

Four major positioning errorUnderpositioning - Lack clarity

Overposition - Narrow image

Confused Position - Too many claims

Doubtful Positioning