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Segmentation,targeting and

positioning

Lec-4,5

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Market Segmentation

Market segmentation is the process that

companies use to divide large

heterogeneous markets into small marketsthat can be reached more efficiently and

effectively with products and services that

match their unique needs

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Market Segmentation

Segmenting consumer markets

Segmenting business markets

Segmenting international markets

Requirements for effective segmentation

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Segmenting Consumer

Markets

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Segmenting Consumer

Markets Geographic segmentation divides the

market into different geographical units

such as nations, regions, states, counties, orcities

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Segmenting Consumer

Markets Demographic segmentation divides the market

into groups based on variables such as age,

gender, family size, family life cycle, income,occupation, education, religion, race, generation,

and nationality

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Segmenting Consumer

MarketsAge and life-cycle stage segmentation is the

process of offering different products or

using different marketing approaches fordifferent age and life-cycle groups

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Segmenting Consumer

MarketsIncome segmentation divides the market into

affluent or low-income consumers

Psychographic segmentation divides buyers intodifferent groups based on social class, lifestyle, or

personality traits

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Segmenting Consumer

MarketsBehavioral segmentation divides buyers into

groups based on their knowledge, attitudes,uses, or responses to a product

Occasions

Benefits sought

Usage rate

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Segmenting International

markets

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Requirements for Effective

Segmentation To be useful, market segments must be:

Measurable Accessible

Substantial Differentiable

Actionable

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Selecting Target Market

Segments Target market consists of a set of buyers

who share common needs or characteristics

that the company decides to serve

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Target Marketing Strategies

Mass marketing

Differentiated marketing (Segmented

marketing)

Concentrated Marketing (Niche marketing)

Micro marketing (Local or individual

marketing)

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Target Marketing Strategies

Mass marketing targets the whole market

with one offer

Mass marketing focuses on common needsrather than whats different

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Target Marketing Strategies

Differentiated marketing targets several

different market segments and designs

separate offers for each Goal is to achieve higher sales and stronger

position

More expensive than undifferentiatedmarketing

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Target Market Strategies

Concentrated (Niche) marketing targets a small

share of a large market

Limited company resources Knowledge of the market

More effective and efficient

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Target Market Strategies

Micromarketing is the practice of tailoring

products and marketing programs to suit the

tastes of specific individuals and locations Local marketing

Individual marketing

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Target Market Strategies

Local marketing involves tailoring brands

and promotion to the needs and wants of

local customer groups Cities

Neighborhoods

Stores

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Target Market Strategies

Individual marketing involves tailoring products

and marketing programs to the needs and

preferences of individual customers Also known as:

One-to-one marketing

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Positioning

Product position is the way the product is definedby consumers on important attributesthe placethe product occupies in consumers minds relativeto competing products Perceptions

Impressions

Feelings

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Choosing a Differentiation

and Positioning Strategy

Identifying a set of possible competitive

advantages to build a position

Choosing the right competitive advantages

Selecting an overall positioning strategy

Developing a positioning statement

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Competitive Advantage

Competitive advantage is an advantage over

competitors gained by offering consumers greatervalue, either through lower prices or by providing

more benefits that justify higher prices

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Choosing a Differentiation

and Positioning Strategy

Identifying a set of possible competitive advantages to build a

position by providing superior value from:

Product differentiation

Service differentiation

Channel differentiation

People differentiation

Image differentiation

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STP