Segmentation, Targeting and Positioning

Steps in Market Segmentation, Targeting,and Positioning

1. Identifysegmentationvariables andsegment themarket

2. Develop profiles ofresultingsegments

MarketMarketSegmentationSegmentation

3. Evaluateattractivenessof eachsegment

4. Select thetargetsegment(s)

MarketMarketTargetingTargeting

5. Identifypossible

positioningconcepts foreach target

segment

6. Select,develop, andcommunicate

the chosenpositioning

concept

MarketMarketPositioningPositioning

Why Segmentation ?

• Not all buyers alike• Subgroups may be identified• Subgroups smaller and more

homogeneous• Easier to satisfy smaller groups

How to Segment & Target?

1.Break marke

t down

2.Group into

segments

TARGET MARKET

3.Choos

etarget marke

t

Bases for Segmenting Consumer Markets

Occasions, Benefits, Uses, or Attitudes

Behavioral

Geographic

Region, City or MetroSize, Density, Climate Demographic

Age, Gender, Family size and Life cycle, Race, Occupation, or Income ...

Lifestyle or PersonalityPsychographic

Bases for SegmentationGeographic

World Region or Country North america, Middle East, Western Europe, India, China

Country Region Northern India, Southern India, Eastern India, Western India

Density Urban, Rural, Suburban

City Size under 5000, 5000-20000, 20000-50000,50000-100000….

Demographic

Age under 6, 6-12, 13-19, 20-30, 30-45, 45-60, 60 and above

Gender Male, Female

Family Size 1-2, 2-4, 5+

Family Life Cycle Young single, young married no children, young married with children

Income under Rs.100000, 100000-300000, 300000-500000, 500000+

Occupation Professional, Technical, Officials, Self Employed, Unemployed

Education Literacy rate

Religion Hindu, Muslim, Sikkha, Christen

Generation Baby Boomers, Generation X, Generation Y

Nationality Indian, Japanese, American, French, German

Bases for Segmentation

Life Style Extravagent, Rattional, Economic

Personality Extrovert, Introvert, Ambiovert

Behavioural

Occasions Regular, Special Occasion

Benefits Quality, Service, Economy, Convenience

User Status Non user, Ex user, Potential user, First time user, Regular user

User Rate Light user, Medium user, High user

Loyalty Status None, Medium, Strong

Radiness Stage Unaware, Aware, Interested, Desirous, Intending to buy

Market Targeting1. Evaluating Market Segment

• Segment Size and Growth

• Segment Structural Attractiveness

• Company Objectives & Resources

2. Selecting Target Segment

3. Targeting Strategies

-Standardization

-Differentiation

-Focus

Five Patterns of Target Market Selection

Single-segmentSingle-segmentconcentrationconcentration

ProductProductspecializationspecialization

M1 M2 M3 P1

P2

P3

SelectiveSelectivespecializationspecialization

M1 M2 M3 P1

P2

P3

M1 M2 M3

Full marketFull marketcoveragecoverage

P1

P2

P3

MarketMarketspecializationspecialization

M1 M2 M3 P1

P2

P3

P1

P2

P3

M1 M2 M3

P = ProductP = ProductM = MarketM = Market

Choosing a Positioning Strategy

• Product’s Position - the way the product is defined by consumers on important attributes - the place the product occupies in consumers’ minds relative to competing products.

• Marketers must:– Plan positions to give their products the

greatest advantage in selected target markets,– Design marketing mixes to create these

planned positions.

Positioning• Positioning is an act of creating an image

of the product in the minds of customers.

• Positioning involves the brand’s unique benefits and differentiations in customers mind.

Ex: Complan – A complete planned food

Videocon – Indian Multinational

ServicesDifferentiationi.e. Delivery, Installation,

Repair Services, Customer

Training Services

Product Differentiationi.e. Features,

Performance, Style & Design, or Attributes

ImageDifferentiationi.e. Symbols, Atmospheres,

Events

Personnel Differentiation

i.e. Hiring, Training Better People Than

Competitors Do

Positioning StrategyIdentifying Possible Competitive Advantages

Product Differentiation

FormFea-

turesPerfor-mance

Quality

Dura-bility

Relia-bility

Repair-ability

Style Design

Product Differentiation• Form: size, shape or physical structure

Ex. Sony Handicam, Product of Asian sky shop• Features: These are the characteristics that supplements the product

basic functioning Ex: Mobile phones with blue tooth, touch screen, recorder

• Performance : Buyers will pay more for the better performanceEx: Quick service offered in 5 star hotels

• QualityEx: Mac Donald’s Burger, Barista Coffee, Surf Excel Powder

• Durability• Reliability Ex: Godrej Almirah• Reparability – easy to repair• Style – How well the product looks and feels to the customer

Ex: Parker Pens, Ray Ban Sun glasses, • Design Is the totality of features that affect how a product looks and

works in terms of customer requirements ( Pleasing look, easy to open, operate to repair, )

Ex: Gillette in electric shavers

DeliveryEx: Home Delivery,

Dominos

DeliveryEx: Home Delivery,

Dominos

Services Differentiation

OrderingEase

Ex. Telephone ordering,

Internet

OrderingEase

Ex. Telephone ordering,

Internet

Maintenance& Repair

Ex: LG Samsung

Maintenance& Repair

Ex: LG Samsung

CustomerTrainingEx: SPSS, Data base software

CustomerTrainingEx: SPSS, Data base software

InstallationEx. Reliance

WLL phones, Airtel,

Tata Sky

InstallationEx. Reliance

WLL phones, Airtel,

Tata Sky

CustomerConsultingEx. Investment

Companies

CustomerConsultingEx. Investment

Companies

MiscellaneousS

ervices

Companies can gain a strong competitive advantage through having better trained people. Trained personnel exhibits following characteristics

Competence – possess the required skills & knowledge

Courtesy – Friendly, respectful Credibility – Trustworthy Reliability – perform the service consistently and

accurately Responsiveness – respond quickly to the customer’s

problem Communication – make an effort to understand the

customer and communicate clearly

PERSONNEL Differentiation

Channel Differentiation

• Coverage

• Expertise

• Performance

Media Atmosphere

Symbols

Events

Image Differentiation

Differences WorthDifferences WorthEstablishingEstablishing

AffordableAffordable SuperiorSuperior

ProfitableProfitable

PreemptivePreemptive

DistinctiveDistinctive

ImportantImportant

Which Differences to Promote

•Distinctive: Company can offer better than competitors

•Superior: Customer might not obtain the same benefit elsewhere

•Profitable: Introduce the difference with profit

•Preemptive: Competitors can not imitate the difference easily

•Affordable: Buyers can afford to pay for the difference

•Communicable: The difference is communicable and visible to the buyers

•Important The difference delivers a highly valued benefit to the target buyers

Perceptual Map Stylish, Prestigious

Practical, Economical

Conservative, Older

Sporty, Fast

Rolls Royce

Maruti Alto

Baleno Ambassador

Mercedes

Honda Accord

Ferrari

Maruti Omini

Swift

Palio