Mr.Afridi, Kabul Institute, Kabul 1

Market Segmentation, Targeting, and Positioning

Waleed Khan AfridiMS-Leading to PhD

Member SDPI, South Asia

Member PJMS

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Overview of Market Segments and Target Markets

• Market Segments: Groups of customers with different wants, needs, behaviors in a market are called market segments.

• Target Market: A specific Market Segment of (customers or organizations) for which the seller designs specific promotional activities is called as Target Market.

• Market Segmentation: A process of dividing the total market for a good or service into small, same groups.

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Benefits of Market Segmentation

• Customers with similar wants, needs and characteristics can be focused.

• It is easy to design promotional activities for a specific segment.

• By targeting a specific segment, much investment can be saved.

• It is easy to manage a specific segment of market.

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Process of Market Segmentation

• Intuition based on experience and judgment.

• Copying competitors and earlier market entrants.

• Process Steps:• Identify the wants and needs

of the customers which are not satisfied in a market.

• Identifying the characteristics that distinguish segments (age, gender, likes and dislikes).

• Identify the size of the segments and estimate demand for the product (Sales).

Identify Needs

Identify Characteristics

Estimate Demand for products

Market Segmentation Process

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Ultimate Consumer and Business Consumers

• Ultimate consumers who buy goods or services for their own personal or household use.

• Business users who buy goods or services to use in their businesses, to make other products, or to resell to other business users or consumers.

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CONSUMER MARKETS ARE COMMONLY FURTHER SEGMENTED ON THE BASIS OF:

• Geography

• Demographics

• Psychographics

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Segmentation basis Typical market segments

• Geographic:• Region New England, Middle Atlantic, and other• census regions• City Population Under 25,000; 25,001-100,000; 100,001-• 500,000; 500,001-1,000,000; etc.• Urban-rural Urban, suburban, rural• Climate Hot, cold, sunny, rainy, cloudy

• Demographic:• Income Under $10,000; $10,001-$25,000; $25,001-• $35,000; $35,001-$50,000; over $50,000• Age Under 6, 6-12, 13-19, 20-34, 35-49, • 50-64, 65 and over• Gender Male, female• Family life cycle Young, single; young, married, no • children, etc.• Social class Upper class, upper middle, lower middle, • upper lower, etc

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Segmentation basis Typical market segments (cont.)

• Demographic (cont.):• Education Grade school only, high school

graduate, • college graduate• Occupation Professional, manager, clerical, sales, • student, homemaker, unemployed• Ethnic background African, Asian, European, Hispanic,

Middle Eastern, etc.

• Psychographic:• Personality Ambitious, self-confident, aggressive,• introverted, extroverted, sociable• Life-style Activities (golf, travel); interests

(politics,• art); opinions (conservation, capitalism)• Values Values and Life-Styles

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GEOGRAPHIC SEGMENTATION

• Regional distribution because people within a given region tend to share the same values attitudes and style preferences.

• Urban, suburban, and rural distribution.

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Geographic Segmentation(Example)

• Nestle Mineral Water Company, in Pakistan decided to divide the Karachi Market (Capital City of Sind Province) into segments on the basis of Geography , and Geographic Segmentation was done. Karachi Market was divided into Rural, Urban and Sub-Urban Areas. Individuals needs and wants of clean drinking water were identified in Urban Areas, Rural Areas and Sub Urban Areas. Individuals living in those areas wanted clean drinking water plants in their local areas. According to the needs and wants of the consumers living in Rural Areas, Urban Areas and Sub-urban areas, clean drinking water plants (Mini-size) were established in the locales (Streets) etc.

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DEMOGRAPHIC SEGMENTATIONAge, Gender, Education etc

• Age• Social class: A measure

made up of a combination of characteristics such as level of education, occupation, and the type of neighborhood one lives in.

• Ethnicity

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Demographic Segmentation(Example)

• Dolce and Gabbana a US Canvas firm, decided to segment the market of South Carolina on the basis of Demographic characteristics and those consumers who’s ethnicity belonged to Africa were targeted, meaning that they focused Black consumers. D&G decided to produce Black Jeans Paints as the black Jeans were not available in the markets and they were according to the need and wants of Black Consumers (American African).

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PSYCHOGRAPHIC SEGMENTATION HOW A PERSON THINKS, FEELS, AND BEHAVES.

• Personality characteristics.

• Lifestyles, including activities, interests, and opinions.

• Values, are principles of society that are acceptable to the society members.

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Psychographic Segmentation(Example)

• Arctic engineers, the producers of Gymtronics (Weight reducing device), decided to segment the market of California State of USA on the basis of Life Style characteristics of Consumers. In this way the needs of consumers were identified who were over weight and wanted to reduce weight to enhance their lifestyles activities. Gymtronics guaranteed weight loss and thus Psychographic Segmentation was done.

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Target Market StrategiesA Process of focusing a specific market segment by shifting all promotional

activities to that segment. Targeting includes advertising, personal selling and direct marketing.

• Market aggregation—treat the total market as a single segment. Kabul City is a total market for ACER Computers.

• Single-segment concentration—focus on one segment. ACER Computers has targeted a segment of Foreigners as they have money and are rich.

• Multiple-segment segmentation—select two or more segments and devise different marketing mixes for each. ACER Computers have targeted Foreigners and those who work in offices, mean Officer Workers.

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Thank you very much for your time!

• Mr.Afridi (waleedafr@yahoo.com)

• Please send you feedback through email.

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Disclaimer• It is to notify that these slides have been made with the help of the

Text Books and Reference Books that are permitted by the Preston University, USA (www.preston.edu) and the Kardan University (An affiliate of Preston USA), Kabul, Afghanistan. The students/users are advised to use the slides without any doubt and fear of getting falsified knowledge. In case of any doubt or problem the Mr.Afridi may please be contacted.

• Recommended Books: • Marketing (Concepts and Cases) Thirteen Edition/Special Indian

Edition (LPE) by Etzel, Walker, Stanton and Pandit, McGraw Hill Publishers.

• Principles of Marketing, (LPE) Twelfth Edition by Philip Kotler and Gary Armstrong, Pearson Education Publishers.