Segmentation, Targeting and Positioning

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Transcript of Segmentation, Targeting and Positioning

Segmentation, Targeting and Positioning

Learning Objectives1.

2. 3.


Learn the three steps of target marketing, market segmentation, target marketing, and market positioning Understand the major bases for segmenting consumer and business marketing strategy Know how companies identify attractive market segments and choose target marketing strategy Realize how companies position their products for maximum competitive advantage in the marketplace

Steps in market segmentation, targeting and positioning Market Segmentation

Identify bases for segmenting the market Develop segment profiles Develop measure of segment attractiveness Select target segments Develop positioning for target segments Develop a marketing mix for each segment

Target Marketing

Market Positioning

Market Segmentation

Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes.

Markets differ in their degree of heterogeneity . At one extreme they are homogeneous (Similar) and at the other extreme they are heterogeneous (Substantially different). Market Segmentation is the process of identifying group of buyers with different buying desires or requirements. There may be three basic market preferences: 1.Homogeneous, 2. Diffused, and 3. Clustered

BASIC MARKET PREFERENCE PATTERNS:::::::::::::: :::::::::::::: :::::::::::::: Attribute :::::::::::::: Attri. ::::::::::::: ::::::::::::: Y :: :::::::::::::::: Y :::::::::::: :::::::::::::: :::::::::::::: Attribute X A.Homogeneous Preferences Attribute X B.Diffused Preferences Attribute X C.Clustered Preferences

Attribute Y

Niche, Local, Customerisation A niche is more narrowly defined customer

group seeking a distinctive mix of benefits. Local marketing is tailored to the needs and wants of local customer groups. Customised marketing is one-to-one marketing.s


It improves a companys understanding of why consumers do or do not buy certain products. Therefore prepares a company to meet changing market demands. Information gained from segmentation allows the organization to plan a systematic and effective marketing programme to satisfy the consumer needs. Better assessment of the strengths and weaknesses of the competition. Better allocation of marketing resources.

Requirements for Effective Segmentation


Size, purchasing power, and profile of segment Can be reached and served Large and profitable enough to serve Respond differently Effective programs can be developed






CONSUMER CHARACTERISTICS (1) Geographic ( Region, city, rural and semi-urban areas ) (2) Demographic ( age, life cycle stage, generation, family size, gender, income, occupation, education, socio-economic classification ) (3) Psychographic ( life style, psychological/personalitytraits, values)

CONSUMER RESPONSES (4) Behavioral Segments (Buyer readiness stage, Benefitssought, Usage rate, Attitude, Loyalty, Occasions, User status)

Segmenting Business Markets

Demographic segmentation

Industry, company size, location Technology, usage status, customer capabilities

Operating variables

Purchasing approaches Situational factors

Urgency, specific application, size of order Buyer-seller similarity, attitudes toward risk, loyalty

Personal characteristics

Segmenting International Markets

Geographic segmentation

Location or region Population income or level of economic development Type / stability of government, monetary regulations, amount of bureaucracy, etc. Language, religion, values, attitudes, customs, behavioral patterns

Economic factors

Political and legal factors

Cultural factors

Target Marketing Target Market

Consists of a set of buyers who share common needs or characteristics that the company decides to serve

Target Marketing Evaluating Market Segments

Segment size and growth Segment structural attractiveness Level of competition Substitute products Power of buyers Powerful suppliers

Company objectives and resources

Target Marketing Selecting Target Market Segments

Undifferentiated (mass) marketing Differentiated (segmented) marketing Concentrated (niche) marketing Micromarketing (local or individual)

FIVE PATTERNS OF TARGET MARKET SELECTION Single Market Concentration Market Specialization Product Specialization Selective Specialization Full Coverage


Companys Resources Product Homogeneity Product Stage in the Life Cycle Market Homogeneity Competitive Marketing Strategy

Positioning Positioning:

The place the product occupies in consumers minds relative to competing products. Typically defined by consumers on the basis of important attributes. Involves implanting the brands unique benefits and differentiation in the customers mind. Positioning maps that plot perceptions of brands are commonly used.

POSITIONING STRATEGIES Identifying possible competitive

advantagesDifferentiation can be based on Products Services Channels People Image

Product Differentiation

Form- size, shape or physical structure Features- supplement to basic function. Performance Quality-the level at which the products

primary characteristics operates. Conformance Quality- the degree to which all the produced units are identical and meet the promised specifications. Durability- a measure of the products expected operating life under natural or stressful conditions. Reliability- a measure of the probability that a product will not malfunction within a specified time period. Reparability- a measure of the ease of fixing a product when it fails

Style Quality can be communicated by choosing physical signs and cues

Services Differentiation Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair

Personnel Differentiation Competence Courtesy Credibility Reliability Responsiveness Communication

Channel Differentiation Coverage Expertise Performance

Image Differentiation Image is the way the public perceives the

company or its products. Identity is the way a company aims to identify or position itself or its products. Symbols, colours, slogans, atmosphere, Events and employee behaviour

Choosing the right competitive advantageHow many differences to promote? Unique selling proposition Several benefits Which differences to promote? Criteria include: Important Distinctive Superior Communicable Preemptive Affordable Profitable

Developing and communicating a positioning strategyAll products can be differentiated to some extent. But not all differences are meaningful or worthwhile. A difference is worth establishing to the extent that it satisfies the following criteria : Important : The difference delivers a highly valued benefit to a sufficient numbers of buyers. Distinctive : The difference is delivered in a distinctive way.

Developing and communicating a positioning strategy Superior : The difference is superior to

other ways of obtaining the benefit. Preemptive : The difference cannot be easily copied by competitors. Affordable : The buyer can afford to pay for the difference. Profitable : The company will find it profitable to introduce the difference.

Choosing a positioning strategy

Value propositions ( the whole cluster of benefits the company promises to deliver )represent the full positioning of the brand Possible value propositions: More for More More for the Same More for Less The Same for Less Less for Much Less

Some examples



Amul : The taste of India

Hindustan Unilever Limited

HDFC Standard Life Insurance