MARKET ENTRY

SEGMENTATION TARGETING
AND POSITIONING

Prof. Grover
 What’s the Difference?
People or organizations with needs or
Market wants and the ability and willingness to
buy.

A subgroup of people or organizations

Market sharing one or more characteristics
Segment that cause them to have similar product
needs.

The process of dividing a market into

Market meaningful, relatively similar,
Segmentation identifiable segments or groups.
FINDING THE RIGHT MARKETS
Markets = people with needs/wants and the
ability and willingness to buy
Types of markets:
– Generic (needs) market
People with broadly similar needs (social)
Diverse ways of satisfying (restaurants,
movies)
– Products (needs) market
Very similar needs (thirsty for soft drinks)
Very close substitutes (Coke vs. Pepsi, and
what else?)
Any close substitutes or no?
 Finding The Right Markets
Distinct groups on the basis of
Market needs, characteristics and
Segmetation behaviour who might require
separate products.

Process of evaluating market

Market
segments’ attractiveness before
Targeting entering.

Placing the product at a clear,

Market attractive and desirable place
Positioning keeping in mind its competitive
advantages in the market place.
Levels of Market Segmentation
1. Mass marketing (1900s)
 Mass producing, distributing, promoting

2. Segment marketing (1980s)

 Matching the needs
 More efficient

3. Niche marketing
 Focusing sub-segment groups (SUVs)

4. Micro-level marketing
 Local area marketing
 Tailoring products to local markets
 Individual marketing
 Tailoring products to individual customers
 Levels of Market Segmentation 2

 Mass marketing (1920s)

 Mass producing, distributing, promoting in
undifferentiated markets
 In the 1920s with the inception of mass radio use
 This gave corporations an opportunity to appeal
to a wide variety of potential customers
 Used to effect attitude change in wide audience
for products like toothpaste, automobiles,
furniture
 Mass marketing is the opposite of
niche marketing, where a product is made
specially for one person or a group of persons
 Levels of Market Segmentation 3
2. Segment marketing (1980s)
 A fairly homogeneous group of people having
similar needs and attitudes are likely to respond
similarly to a given marketing strategy. They are
likely to have similar feelings and ideas about a
marketing mix – i.e. the product or service, sold at
a given price, and distributed and promoted in a
certain way.
 This calls for Market Segmentation. Market
segmentation is the process of classifying a market
into distinct subsets (segments) that behave in
similar ways or have matching needs.
 The process consists of segment identification,
segment characterization, segment evaluation and
target segment selection.
 Levels of Market Segmentation 4

3. Niche marketing
 Focusing sub-segment groups (SUVs)
 Addressing a need for a product or service that is
not being addressed by mainstream providers
 Niche market ventures are profitable and small in
comparison to the mainstream marketplace
 Due to the benefits of specialization and focus on
small identifiable market segments
 even without the benefit of economy of scale.
 Levels of Market Segmentation 5
4. Micro-level marketing
 Local area marketing – Tailoring products to local
markets
 Individual marketing – Tailoring products to individual
customers

Today the emphasis is on local marketing reaching

individual communities with specialized messages.
The mass marketing era is being replaced by “mass
personalization”
The latest trend is to bring marketing down to the
neighborhood level and make it personal to the
customer or specific neighborhoods
The message be delivered to people most likely to be
your customers
 Market Segmentation
Why is segmentation important?....

Dividing market into meaningful, similar

groups (or aggregating those with similar
needs)
Markets have a variety of product preferences
Marketers can better define customer needs
Decision makers can define objectives and
allocate resources more accurately
 Criteria for Segmentation
Segment must be large enough
Substantiality to warrant a special marketing
mix.
Identifiability Segments must be identifiable
and Measurability and their size measurable.
Members of targeted segments
Accessibility must be reachable with
marketing mix.
Unless segment responds to a
Responsiveness marketing mix differently, no
separate treatment is needed.
 Basis for Customer Segmentation
Ho w do you Segme nt the ma rket s wi th s imi la r ne ed s.

Customers
Consumer Industrial
Markets Markets
Basis for Market Segmentation:
Consumer Markets
Major segmentation variables

Demographic factors
Per. Dem. Socioeconomic factors
Consumer Geographic
Con. Soc.
Markets factors
Psychological factors
Psy. Geo.
Consumption patterns
Perceptual factors
 Segmenting Consumer Markets
Psychographics Behavioural
Geography Demographics Behavioural
(SLIDE) (continued)

• Region • Age & Family • Personality • Benefits • Usage Rate

• Market size life cycle traits sought (SLIDE)
• Market stage (SLIDE) • Lifestyle (SLIDE) • Former
density • Gender • Values • Loyalty • Potential
• Climate • Income status • 1st time
• Generation • Light or
• Social class irregular
Buying
• Medium
decision
• Heavy
roles of :
Initiator,
Influencer,
Decider,
Buyer and
User
Demographic Segmentation:
Family Life Cycle
 Psychographic Segmentation
(Psycho-demographic) n a
n al try,
tio dus
t er , in nd
in log ch a y
Personality traits (cars) s
n
a no ear
I tech res y.
i
- B
IC ess, mer pan
Lifestyles (outdoor) R
S sin nsu com
bu d co ting
an nsul
Values co
SRI Consulting Business Intelligence (SRIC-BI)
framework provides 4 group tendencies under 2
groups with higher resources and lower resources:

Higher Resources Group Lower Resources Group

•Innovators •Believers
•Thinkers •Strivers
•Achievers •Makers
•Experiencers •Survivors
 Behavioural Segmentation
Marketers often segment markets based
on how consumers interact with the
product; and
marketers must determine exactly what
benefits are important to the customer
 different consumers will seek different benefits
from a product or service and will associate it
with different occasions
 benefits arise not only from the product but
from the process of acquiring it
Behavioural Segmentation …
Marketers are now segmenting markets on
the basis of the occasions that customers
associate with use of the product
a widely-used approach to segmentation
involves dividing the market on the basis of
usage rates; many marketers target the
“heavy users”
once segments have been identified,
profiles of segment members are prepared
 Benefit Segmentation
These are those group consumers whose
needs/wants are different/ unique (and not
by gender, age, lifestyle etc.)

What do you need/want

from your shampoo
(Clinic, H&S, Pantene),
bathing soaps (Cinthol,
Detol), cell phone?
 Usage Rate Segmentation
Group by amount / rate of consumption (1st time
user, regular user, ex-users, potential users, light
users, heavy users)
Target market: Unawares-Aware, Not tried - Tried

Not Tried (opinion) – Negative, Neutral, Favourable

Tried (opinion) – Rejector, Non-repeater, Repeater
• Repeater - Loyal to other Brands, Switcher, Loyal to brand
• Loyal to brand – Light user, Regular user, Heavy user
Basis for Market Segmentation:
Business Markets
Major segmentation variables

• Geographic segments
• Product segments Size Geo.

• End-use segments Business

Buy.MarketsPro.
• Common buying factor
End.
segments
• Customer size segments
 Basis for Market Segmentation:
International Markets
1. Segmenting international markets is far greater challenging.
2. Groupings on the basis of distinct buying needs and
behaviors is necessary.
Consider that Coca cola and Sony operate in 200 countries;
and what kind of challenges they face

Major segmentation variables

• Geographic segments Size Geo.
• Political -Legal factors Int’l
• Economic factors Markets Pol.
Buy.
• Common buying needs factors
Eco.
• Customer size segments
 6 Steps to Segment a Market

Select Choose Effectively Profile Select Design

a market basis describes and target marketing
for for your analyze markets mix -
study segmen- segment segments implement
tation & maintain
 Effective Segmentation
Market segments must be:
Measurable
Accessible
Substantial
Differentiable
Actionable
A Good Segment therefore is…

Homogenous within: group members are

similar
Heterogeneous between: group members
outside the group distinctly differ (choose
the best)
Substantial: large enough and sustainable
for above average profit
Operational: workable (identify and
choose China India)
 Implications of Segmentation
Market aggregation is really a production-
oriented strategy; it requires that the firm
find some way to differentiate its product or
service
Increasingly, firms are turning to superior
service as their differentiating strategy
Multiple-segment marketing requires that
the firm develop different versions of the
product offering for each segment; or it may
simply mean different approaches to
serving segments
Targeting
 1
Strategies for Selecting
Markets Segments
A: Undifferentiated targeting
Company
Marketing Market
mix
B: Differentiated targeting
Product Mix 1 Segment 1
Product Mix 2 Segment 2
Product Mix 3 Segment 3

C: Concentrated targeting
Product Segment 1
Mix 1
Mix 2 Segment 2
Mix 3 Segment 3
 1
Strategies for Selecting
Markets Segments
Undifferentiated Targeting
One market, one mix (school note books/ plain
toilet paper)
Any other examples?
Concentrated Targeting
Multiple markets & mix for each
Examples include Fiat, Ford, Honda, Hyundai,
Mercedes and what else?
Multi-segment Targeting
Multiple markets share mix (bad idea)
Advantages = Greater financial success;
Economies of scale
Disadvantages= Higher costs
 2

One-to-One Marketing

One-to-One
Has a Goal of…
Marketing is...

Individualized Cost Reduction

Information-Intensive Customer Retention

Long-Term Increased Revenue

Personalized Customer Loyalty

 3

One-to-One Marketing
Trends

One-size-fits all marketing is lame.

Direct / personal marketing will grow to meet
needs of busy consumers.
We will be loyal to companies that have
earned—and reinforced—our loyalty.
Mass-media approaches will decline as
technology allows better customer tracking.
 4

Selecting Target Markets

Target segments should be compatible with
the organization’s goals and image
The market opportunity represented by the
segment must match the company’s
resources
The segment must represent an opportunity
to generate enough sales to generate a
profit
The company should select target segments
where it can enjoy a competitive advantage
 5

Target Market Strategies

Market aggregation: target the product or
service to a mass market with little
differentiation
Single-segment segmentation: selecting a
single segment to target; if the segment is
small, this may be considered a “niche’
strategy
Multiple-segment segmentation: identifying
two or more segments as target markets;
involves developing a different marketing
approach for each
Positioning
 1

Positioning

Developing a marketing
mix to influence
potential customers’
overall perception of a
brand, product line, or
organization in general.

How is Reliance Fresh Positioned?

 2
Positioning for the
Market Segment
Positioning is the image of your brand held by
the public and especially, your segment.
Usually try to position on attributes consumer
sees as important, such as speed,
convenience, safety.
Positioning Maps (or perceptual maps) help
see how key players in a market are viewed by
consumers. Helps to see competitive clusters
and market gaps.
Positioning Maps (or Perceptual maps)
 3

Positioning Base
Attribute

Price and Quality

Use or Application

Product User

Product Class

Competitor

Emotion
 4

Positioning Strategies
Against Competition: “We’re as good or better”
Cola wars, small car segment.
Market Gap: Find spot others missed. Niche
producers may make vinyl records.
Set Brand Apart: Stress your differences and
avoid head-to-head competition. “Nina Ricci”
Leadership: Be the one others follow. Used by
a personality.
Lifestyle Segment Appeals: Use lifestyle to
define. Some buy fancy cameras to take
creative photography, others to impress.
 5

Niche Marketing

This is a specific form of positioning

The company decides to occupy a market niche
where it can be distinct and the competition is
weak
Identify segments that are not well served or not
identified
Determine how to gain a competitive advantage
Expand the niche by meeting consumer needs
Defend the niche position by improving product
and service offerings
 6

Repositioning

This is a variation of a positioning strategy that

involves changing the market position of a
brand or store in response to changes taking
place in the broader market environment.
India is passing through this stage today.
Everyone is trying to redefine their product and
aligning them with the younger generation. Ex-
Godrej, Shoppers Stop!
 7

Effective Positioning

 Assess the positions occupied by

competing products
 Determine the dimensions underlying
these positions
 Choose a market position where
marketing efforts will have the
greatest impact
 8
Product Differentiation:
a positioning strategy

A positioning strategy that

some firms use to
distinguish their products
from those of competitors.

Are distinctions real or

perceived?
 Summary
Generic vs. Product markets
Segmentation: Criteria
Basis for segmenting
Strategies of segmentation
Positioning / Repositioning
Thank you!