Market Segmentation:

Definitions:
1)Breaking the whole market into smaller groups, each of which is
targeted separately.
2)Grouping people according to their similarity related to a particular
product category”
3)Market segmentation is the study of the marketplace in order to
discover already existing viable groups of consumers who are similar or
homogeneous in their approaches to choosing and/or consuming goods
and services.
It is a process of identifying niche markets.
4)Process of dividing the total market for a good or service into several
smaller, internally homogeneous groups.

Members of each group are similar with respect to the factors that
influence demand.
Characteristics
1)age
2)gender
3)geographic location
4)income
5)spending patterns
6)cultural background
7)demographics
8)marital status
9)education
10)language
11)mobility

Levels of Market Segmentation

We have four levels of segments
1. Segments
2. Niches
3. Local areas
4. Individuals.

Segment Marketing
A market segment consists of a large identifiable group within a market,
with similar wants, purchasing power, geographical location, buying
attitudes, or buying habits. For example, an automaker may identify four
broad segments in the car market: buyers who are primarily seeking (1)
basic transportation, (2) high performance, (3) luxury, or (4) safety.
Because the needs, preferences, and behavior of segment members are
similar but not identical
For example, Delta Airlines offers all economy passengers a seat, food,
and soft drinks, but it charges extra for alcoholic beverages and
earphones.

Segment marketing allows a firm to create a more fine-tuned product or

service offering and price it appropriately for the target audience. The
choice of distribution channels and communications channels becomes
much easier, and the firm may find it faces fewer competitors in certain
segments.

Niche Marketing
A niche is a more narrowly defined group, (typically a small market
whose needs are not being well served). Marketers usually identify niches
by dividing a segment into subsegments or by defining a group seeking a
distinctive mix of benefits. For example, a tobacco company might
identify two subsegments of heavy smokers: those who are trying to stop
smoking, and those who don’t care.

Local Marketing
Target marketing is leading to some marketing programs that are tailored
to the needs and wants of local customer groups (trading areas,
neighborhoods, even individual stores). Citibank, for instance, adjusts its
banking services in each branch depending on neighborhood
demographics; Kraft helps supermarket chains identify the cheese
assortment and shelf positioning that will optimize cheese sales in low-,
middle-, and high-income stores and in different ethnic neighborhoods.

Individual Marketing
The ultimate level of segmentation leads to “segments of one,”
“customized marketing,” or “one-to-one marketing.”For centuries,
consumers were served as individuals: The tailor made the suit and the
cobbler designed shoes for the individual. Much businessto-business
marketing today is customized, in that a manufacturer will customize the
offer, logistics, communications, and financial terms for each major
account.

Patterns of Market Segmentation

Market segments can be built up in many ways. One common method is
to identify preference segments. Suppose ice cream buyers are asked how
much they value sweetness and creaminess as two product attributes.
Three different patterns can emerge:
A.Homogeneous preferences: Market in which all of the consumers have
roughly the same preference, so there are no natural segments. We predict
that existing brands would be similar and cluster around the middle of the
scale in both sweetness and creaminess.
.
B.Diffused preferences: At the other extreme, consumer preferences may
be scattered throughout the space indicating great variance in consumer
preferences. One brand might position in the center to appeal to the most
people; if several brands are in the market, they are likely to position
throughout the space and show real differences to reflect consumer-
preference differences.
.
C.Clustered preferences: The market might reveal distinct preference
clusters, called natural market segments . The first firm in this market
might position in the center to appeal to all groups, choose the largest
market segment (concentrated marketing), or develop several brands for
different segments. If the first firm has only one brand, competitors
would enter and introduce brands in the other segments.
Market-Segmentation Procedure

Marketers use a three-step procedure for identifying market segments:

1.Survey stage. The researcher conducts exploratory interviews and focus

groups to gain insight into customer motivations, attitudes, and behavior.
Then the researcher prepares a questionnaire and collects data on
attributes and their importance ratings, brand awareness and brand
ratings, product-usage patterns, attitudes toward the product category, and
respondents’ demographics, geographics, psychographics, and
mediagraphics.
2. Analysis stage. The researcher applies factor analysis to the data to
remove highly correlated
variables, then applies cluster analysis to create a specified number of
maximally different segments.
3. Profiling stage. Each cluster is profiled in terms of its distinguishing
attitudes, behavior,
demographics, psychographics, and media patterns, then each segment is
given a name based on its dominant characteristic. In a study of the
leisure market,
Andreasen and Belk found six segments:10 passive homebody, active
sports enthusiast, inner-directed self-sufficient, culture patron, active
homebody, and socially active. They found that performing arts
organizations could sell the most tickets by targeting culture patrons as
well as socially active people.
EX: Companies can uncover new segments by researching the hierarchy
of attributes that customers consider when choosing a brand. For
instance, car buyers who first decide on price are price dominant; those
who first decide on car type (e.g., passenger, sport-utility) are type
dominant; those who first decide on brand are brand dominant. With
these segments, customers may have distinct demographics,
psychographics, and mediagraphics to be analyzed and addressed through
marketing programs.

SEGMENTING CONSUMER AND BUSINESS MARKETS

Because of the inherent differences between consumer and business
markets, marketers cannot use exactly the same variables to segment
both. Instead, they use one broad group of variables as the basis for
consumer segmentation and another broad group for business
segmentation.
customer profile:
The Biggest Challenge for a Firm – Understand
Customer preferences
• Ask customers what they want
• Interpret the answers
• Figure out what to do to satisfy these
Wants

Drivers of buyers behaviour

B
• Exogenous Factors?
• Endogenous Factors?
Drivers of Buyer
• Endogenous - Who the Consumer is:
– Family Influence
– Culture
– Values

• Endogenous - The Situation a Consumer finds

ones self in:
– Needs
– Benefits
Buyer Model
Simplified buyer behaviour model:
Who X When = Choice + Satisfaction

4 commonly used bases for customer Segmentation

1)Descriptive
geographic location
demographic
2)Behavioural
psychographic
benefits

Bases for Segmenting Consumer Markets

In segmenting consumer markets, marketers can apply geographic,
demographic, psychographic and behavioural variables related to
consumer characteristics as well as behavioral variables related to
consumer responses (see Table 3.5). Once the segments are formed, the
marketer sees whether different characteristics are associated with each
consumer-response segment.

A: Geographic Segmentation (region, climate, population density)

Geographic segmentation calls for dividing the market into different
geographical units such as nations, states, regions, counties, cities, or
neighborhoods. The company can operate in one or a few geographic
areas or operate in all but pay attention to local variations. Some
marketers even segment down to a specific zip code. Consider a big retail
house having large no of retail outlets divide on the Geographic
segmentation basis and keep their stock as per different regions according
to their regional preferences and believes.
EX: A automobile company having good business in India, wile serving
in India it only has to take care of the local norms of different conditions,
when it goes international means serving to another market segment
Geographically apart from the other then the co. has to take care of …

B: Demographic Segmentation (age, sex, education, occupation, religion,

race, nationality, family size, family lifestyle)
In demographic segmentation, the market is divided into groups on the
basis of age and the other variables. One reason this is the most popular
consumer segmentation method is that consumer wants, preferences, and
usage rates are often associated with demographic variables. Another
reason is that demographic variables are easier to measure. Even when
the target market is described in nondemographic terms (say, a
personality type), the link back to demographic characteristics is needed
in order to estimate the size of the target market and the media that
should be used to reach it efficiently.

Here is how certain demographic variables have been used to segment

consumer markets:

Age and life-cycle stage. Consumer wants and abilities change with age,
as Horlicks introduced many health drinks for different age group starting
from 3 yrs to old age ones.
Gender. Gender segmentation has long been applied in clothing,
hairstyling, cosmetics, and magazines..
Income
Generation.
Social class. Social class strongly influences preference in cars, clothing,
home ,design products for specific social classes. However, the tastes of
social classes can change over time.
furnishings, leisure activities, reading habits, and retailers, which is why
many firms

Psychographic Segmentation
Lifestyle. People exhibit many more lifestyles than are suggested by the
seven social
classes, and the goods they consume express their lifestyles. Meat seems
an unlikely
product for lifestyle segmentation,

C: Behavioral Segmentation (attitude, knowledge, benefits, user status,

usage rate, loyalty status, readiness to buy, occasions)
In behavioral segmentation, buyers are divided into groups on the basis of
their knowledge
of, attitude toward, use of, or response to a product. Many marketers
believe that behavioral
variables—occasions, benefits, user status, usage rate, loyalty status,
buyer-readiness
stage, and attitude—are the best starting points for constructing market
segments.

Occasions. Buyers can be distinguished according to the occasions on

which they
develop a need, purchase a product, or use a product. For example, air
travel is
triggered by occasions related to business, vacation, or family, so an
airline can
specialize in one of these occasions.
.
Benefits. Buyers can be classified according to the benefits they seek.
One study of
travelers uncovered three benefit segments: those who travel to be with
family, those
who travel for adventure or education, and those who enjoy the
“gambling” and
“fun” aspects of travel.21
.
User status. Markets can be segmented into nonusers, ex-users, potential
users, first-

Usage rate. Markets can be segmented into light, medium, and heavy

Attitude. Five attitude groups can be found in a market: (1) enthusiastic,

(2) positive,
(3) indifferent, (4) negative, and (5) hostile. So, for example, workers in a
political

D.Psychographic Segmentation: Here buyers are divided into different

groups on the basis of lifestyle or personality or value. The term
Psychographics describes a wide variety of psychological and
behavioural patterns of an individual / market. Values are a reflection of
our needs adjusted for the realities of the world in which we live. There
are nine basic values (according to a research at the University of
Michigan):
Self Respect
Self Fulfillment
Security
Sense of belonging
Excitement
Sense of Accomplishment
Fun & Enjoyment in Life
Being well respected
Having warm relationships.

Multi-Attribute Segmentation (Geo clustering)

Marketers are increasingly combining several variables in an effort to
identify smaller,
better defined target groups. Thus, a bank may not only identify a group
of wealthy
retired adults, but within that group may distinguish several segments
depending on
current income, assets, savings, and risk preferences.

Bases for Segmenting Business Markets

Business markets can be segmented with some variables that are

employed in consumer market segmentation, such as geography, benefits
sought, and usage rate. Yet business marketers can also use several other
variables. Bonoma and Shapiro proposed segmenting the business market
with the variables shown in Table 3.6. The demographic variables are the
most important, followed by the operating variables down to the personal
characteristics of the buyer.

Major Segmentation Variables for Business Markets Demographic

1. Industry: Which industries should we serve?

2. Company size: What size companies should we serve?
3. Location: What geographical areas should we serve?

Segmentation for Industrial Markets

Geographic Segmentation
useful for the automotive industry
Product Segmentation
ie. Special parts and components
Segmentation by End-Use Application
ie. Paint mfg. Paint for waterproof applications, paint for rust
prevention, paint which sticks to glass

Effective Segmentation
Even after applying segmentation variables to a consumer or business
market, marketers must realize that not all segmentations are useful. For
example, table salt buyers could be divided into blond and brunette
customers, but hair color is not relevant to the purchase of salt.
Furthermore, if all salt buyers buy the same amount of salt each month,
believe all salt is the same, and would pay only one price for salt, this
market would be minimally segmentable from a marketing perspective.

To be useful, market segments must be:

Measurable: The size, purchasing power, and characteristics of the
segments can be measured.
Substantial: The segments are large and profitable enough to serve. A
segment should be the largest possible homogeneous group worth going
after with a tailored marketing program.
Accessible: The segments can be effectively reached and served.
Differentiable: The segments are conceptually distinguishable and
respond differently
to different marketing mixes. If two segments respond identically to a
particular
offer, they do not constitute separate segments.

To sum up Segmentation:----

Process of Market Segmentation

Identify wants within a market => Identify characteristics => Determine
size and satisfaction

Market Segmentation Conditions

Measurable and Obtainable Data
Segment is Accessible
Large enough to be Profitable
MICROMARKETING Treat each single customer as a separate segment
Market Segmentation - First Cut
Customer’s reason for buying
CONSUMER: Purchase for personal use
BUSINESS: Purchase to use in organizations, to resell, or to make other
products

Segmentation of Detergent market in India

1.Premium
Ariel- Ultramatic & Spring clean Surf -Automatic & Quick wash,
2.Mid – priced
Surf Excel Blue, Tide, Stain Champion
3.Mass Market
Wheel , Fena, Nirma,Ghadi etc.

Segment bounding is a means by which marketers differentiate among

consumers and among market segments
Determine the “descriptors” of the consumers/units in the segment (e.g.,
demographics, psychographics, benefits sought, product usage rate, type
of retail outlet, etc.)
Determine specific “geographic location” of segment
Bound segments in “time” to ensure that all data is relevant and up to
date for the time of use.
Segment Viability
Four factors are used to assess segment viability. Viable segments are:
Of sufficient size
Measurable
Differentiated
Reachable

Segmentation Strategies
Mass marketing (undifferentiated marketing): offering the same product
to the entire consumer population
Concentrated marketing (focused or niche marketing): selecting one
market segment, even though the product may also appeal to others
Differentiated marketing: selecting two or more different segments

Segmentation in the Global Marketplace

There are two approaches to market segmentation
Localization: treating each country as a separate market and seeking
consumer segments accordingly
Intermarket segmentation (also called “standardization”): selecting
groups of consumers who exhibit similar consumption behavior across
different countries
Marketers emphasize similarities rather than differences across country
markets
Consumer Benefits and Product Positioning
Product positioning is the placement of a product, service, outlet, etc. in
the mind of the consumer
There are five ways used to position products, services, outlets, etc.
On perceived benefits
On image
On attributes
Against competitors
Combination of two or more of the above
Repositioning: shifting position in the consumer’s mind through changes
in important product, price, distribution, and promotional and/or personal
selling benefits.

GOOD SEGMENTATION APPROACHES

– Clearly identify targets
– Discriminates on behavior
– Are logical, makes sense
Provide insights for marketing initiatives

– Provide reachable targets – media delivery

Are stable
APPROACH TO ATTITUDE BASE MARKET STRUCTURE
• Consumer/Customer Segmentation – Identify
groupings of consumers with similar attitudes out of a
diverse population.
• Need States – Identify product usage situations with
similar set of consumer needs.
• Affinity Segmentation – Identify groups of
consumers with similar degrees of commitment to a
brand.

Consumer/Customer Segmentation Methodology

Typical approach:
• Collected by a “survey.”
– Questionnaire constructed to cover
comprehensive set of attitude statements
– Also collects other measures to relate to the
attitudes.

MARKET TARGETING STRATEGIES

Once the firm has identified its market-segment opportunities, it is ready

to initiate market targeting. Here, marketers evaluate each segment to
determine how many and which ones to target and enter.

Evaluating Market Segments

In evaluating different market segments, the firm must look at two

factors:
the segment’s overall attractiveness,
the company’s objectives and resources.
First, the firm must ask whether a potential segment has the
characteristics that make it generally
attractive, such as size, growth, profitability, scale economies, and low
risk.

Second, the firm must consider whether investing in the segment makes
sense given the firm’s objectives and resources. Some attractive segments
could be dismissed because they do not mesh with the company’s long-
run objectives; some should be dismissed if the company lacks one or
more of the competences needed to offer superior value.
Selecting and Entering Market Segments
Having evaluated different segments, the company can consider five
patterns of target market selection.

Single-Segment Concentration
Many companies concentrate on a single segment: Mercedeze , for
example, concentrates on the high end car market, while Porsche
concentrates on the sports car market. Through concentrated marketing,
the firm gains a thorough understanding of the segment’s needs and
achieves a strong market presence. Furthermore, the firm enjoys
operating economies by specializing its production, distribution, and
promotion; if it attains segment leadership, it can earn a high return on its
investment.

However, concentrated marketing involves higher than normal risks if the

segment turns sour because of changes in buying patterns or new
competition. For these reasons, many companies prefer to operate in
more than one segment.

Selective Specialization
Here the firm selects a number of segments, each objectively attractive
and appropriate. There may be little or no synergy among the segments,
but each segment promises to be a moneymaker. This multisegment
coverage strategy has the advantage of diversifying the firm’s risk.

Consider a radio broadcaster that wants to appeal to both younger and

older listeners using selective specialization. Emmis Communications
owns New York’s WRKSRM, which describes itself as “smooth R&B
[rhythm and blues] and classic soul” and appeals to older listeners, as
well as WQHT-FM, which plays hip-hop (urban street music) for under-
25 listeners.

Product Specialization
Another approach is to specialize in making a certain product for several
segments. An example would be a microscope manufacturer that sells
microscopes to university laboratories, government laboratories, and
commercial laboratories. The firm makes different microscopes for
different customer groups but does not manufacture other instruments
that laboratories might use. Through a product specialization strategy, the
firm builds a strong reputation in the specific product area. The downside
risk is that the product may be supplanted by an entirely new technology.
Market Specialization
With market specialization, the firm concentrates on serving many needs
of a particular customer group. An example would be a firm that sells an
assortment of products only to university laboratories, including
microscopes, oscilloscopes, and chemical flasks. The firm gains a strong
reputation in serving this customer group and becomes a channel for
further products that the customer group could use. However, the
downside risk is that the customer group may have its budgets cut.

Full Market Coverage

Here a firm attempts to serve all customer groups with all of the products
they might need. Only very large firms can undertake a full market
coverage strategy. Examples include IBM (computer market), General
Motors (vehicle market), and Coca-Cola (drink market). Large firms can
cover a whole market in two broad ways: through undifferentiated
marketing or differentiated marketing.

In undifferentiated marketing, the firm ignores market-segment

differences and goes after the whole market with one market offer.
Focusing on a basic buyer need, it designs a product and a marketing
program that will appeal to the broadest number of buyers.

In differentiated marketing, the firm operates in several market segments

and designs different programs for each segment. MARUTI SUZUKI
does this with its various vehicle brands and models; Intel does this with
chips and programs for consumer, business, small business, networking,
digital imaging, and video markets.

MARKET TARGETING
Once the organisation has identified the opportunities existing in different
market segments, it has to decide and select on how many and on which a
particular segment(s) to focus on, and offer their market offering.

Target market is a business term meaning the market segment to which a

particular good or service is marketed. It is mainly
defined by age, gender, geography, socio-economic grouping, or any
other combination of demographics. It is generally studied and mapped
by an organization through lists and reports containing demographic
information that may have an effect on the marketing of key products or
services.

Target Marketing involves breaking a market into segments and then

concentrating your marketing efforts on one or a few key segments.
Target marketing can be the key to a small business’s success. The beauty
of target marketing is that it makes the promotion, pricing and
distribution of your products and/or services easier and more cost-
effective. Target marketing provides a focus to all of your marketing
activities.

Market targeting simply means choosing one’s target market. It needs to

be clarified at the onset that marketing targeting is not synonymous with
market segmentation. Segmentation is actually the prelude to target
market selection. One has to carry out several tasks beside segmentation
before choosing the target market.
Through segmentation, a firm divides the market into many segments.
But all these segments need not form its target market. Target market
signifies only those segments that it wants to adopt as its market. A
selection is thus involved in it. In choosing target market, a firm basically
carries out an evaluation of the various segments and selects those
segments that are most appropriate to it. As we know that the segments
must be relevant, accessible, sizable and profitable. The evaluation of the
different segments has to be actually based on these criteria and only on
the basis of such an evaluation should the target segments be selected.

PROCESS OF CHOOSING THE TARGET MARKET

The process of choosing the target Market are:-

Choosing the target market is related to, but not synonymous with,
market segmentation.
Segmentation is the means of the tool; choosing the target market is the
purpose.
Segmentation can also be viewed as the prelude to target market
selection.
Choosing the target market usually follows multi-level segmentation
using different bases.
Choosing the target market involves several other tasks in addition to
segmentation.
Looking at each segment as a distinct marketing opportunity.
Evaluating the worth of each segment (sales/profit potential).
Evaluating whether the segment is :
Distinguishable.
Measurable.
Sizable.
Accessible.
Growing.
Profitable.
Compatible with the firm’s resources.
Examining whether it is better to choose the whole market, or the only a
few segment, and deciding which ones should be chosen.
Looking for segments, which are relatively less satisfied by the current
offer in the market from competing brands.
Checking out if the firm has the differential advantages / distinctive
capability for serving the selected segments.
Evaluating the firm’s resources and checking whether it is possible to put
in the marketing programmes required for capturing the spotted segments
with those resources.
Final selecting those segments that are most appropriate for the firm.

TARGET MARKET STRATEGIES

There are several different target-market strategies that may be followed.
Targeting strategies usually can be categorized as one of the following:

· Single-segment strategy - Also known as a concentrated strategy. One

market segment (not the entire market) is served with one marketing mix.
A single-segment approach often is the strategy of choice for smaller
companies with limited resources.

· Selective specialization- This is a multiple-segment strategy, also known

as a differentiated strategy. Different marketing mixes are offered to
different segments. The product itself may or may not be different – in
many cases only the promotional message or distribution channels vary. ·
Product specialization- The firm specializes in a particular product and
tailors it to different market segments.
· Market specialization- The firm specializes in serving a particular
market segment and offers that segment an array of different products.
· Full market coverage - The firm attempts to serve the entire market.
This coverage can be achieved by means of either a mass market strategy
in which a single undifferentiated marketing mix is offered to the entire
market, or by a differentiated strategy in which a separate marketing mix
is offered to each segment
· DECISIONS INVOLVED IN TARGETING STRATEGY INCLUDE:-
 which segments to targeting.
 how many products to offer.
 which products to offer in which segments.

POSITIONING
INTRODUCTION: -
Positioning is what you do to mind of the prospect. They iterate that any
brand is valued by the perception it carries in the prospect or customer's
mind. Each brand has thus to be 'Positioned' in a particular class or
segment. Example: Mercedes is positioned for luxury segment, Volvo is
positioned for safety.
Although there are different definitions of Positioning, probably the
most common is: "A product's position is how potential buyers see the
product", and is expressed relative to the position of competitors.
Positioning is a platform for the brand. It facilitates the brand to get
through to the mind of the target consumer. The position of the brand has
thus to be carefully maintained and managed. Example. It is based on the
concept that communication can only take place at the right time and
under the right circumstances."
• Fundamental Elements:
– Target
– Benefit
– Frame of Reference
– Support

POSITIONING CONCEPTS:- Generally, there are three types of

positioning concepts: · Functional positions
-Solve problems.
- Provide benefits to customers.
- Get favorable perception by investors (stock profile) and lenders.
· Symbolic positions
-Self-image enhancement.
- Ego identification.
- Belongingness and social meaningfulness.
- Affective fulfillment.
· Experiential positions
- Provide sensory stimulation.
- Provide cognitive stimulation.
· APPROACHES OF POSITIONING :-
The main positioning strategy is to either developing or reinforcing a
particular image for the brand in the mind of the customer. The main
approaches to positioning strategy are:-
· Customer benefits approach.
· The price-quality approach.
· The use or application approach.
· The product user approach.
· The product class approach.
· The cultural symbol approach.
· The competitor approach.
1. CUSTOMER BENEFIT APPROACH: -
This is an important positioning strategy. It involves putting the brand
above competitors, based on specific brand attributes and customer
benefit. In the automobiles sector we can see many car manufacturer give
emphasis on different technical aspects such as fuel efficiency, safety,
engine performance, power windows etc. Generally marketers identify
positioning in respect of product characteristics that have been ignored by
the competitor. Often we can see that firms attempts to position their
brands along with two or more characteristic simultaneously, this is done
to give an
extra edge to the product from its rival and also helps increase the
product’s life cycle. Thus a single product can solve many problem is the
main theme behind the product. Example: Procter &Gamble’s Head &
shoulder shampoo functions as anti dandruff and anti hairfall shampoo.
Head & Shoulder positioned as both anti-dandruff & anti-hairfall
shampoo .
2. PRICE QUALITY APPROACH: -
Sometimes brands attempts to offer more in term of service, feature,
quality, or performance. Manufacturer of such brands charge higher
prices partly to cover the cost and partly to communicate the fact that
they are of high quality. In fact in the same product category there are
brands, through comparable in qualities, which appeal on the basis of
price. For example brands like Rado and Timex use quality and price
positioning technique respectively. Rado competes for quality and Timex
competes for price. It is difficult to use both quality and price positioning
together because there is a risk that high quality-low price positioning
technique may infer the image of the product in the mind of the
consumer.
3. THE USE AND APPLICATION APPROACH: - In this strategy the
product is positioned with a use or application approach. For example: -
Largest Mobile manufacturer in the world Nokia positioned its few
variant of N-series mobiles as music phones with enhanced memory and
multimedia capabilities. Nokia N-70 Music edition Nokia N-73 Music
edition
With 1GB memory with 1GB memory
4. THE PRODUCT USER APPROACH:- In this approach, the brand
identifies and determines the target segement for which the product will
be positioned. Many brand uses a model or a celebrity to position their
product. The expectation are that a model or a celebrity is likely to
influence the product’s image by reflecting their own image to it. For
example:- Dabur Chyvanprash is positioned for all age groups.
5. THE PRODUCT CLASS APPROACH:- This approach is use so that
the brand is associated with a particular product category. This is
generally used when a category is too crowded. For example:- HLL has
positioned Dove toilet soap as a cleansing cream product for young
womwn with dry skin and its is positioned as a premium segment toilet
soap.
6. THE CULTURAL SYMBOL APPROACH:- The positioning strategy
is based on deeply entrenched cultural symbol. The use of cultural
symbol can help to differentiate the brand from competitors brands. For
example:- The positioning technique of Marlboro cigarettes use the image
of typical American cowboy . Marlboro gives its cigarette brand a
American cowboy image
Example of cultural symbol approach
7. THE COMPETITOR APPROACH:- Many brands use competitor as a
dominant plank in their campaign. These brands are positioned following
its competitor. This is an offensive strategy.
· DIFFERENT POSITIONING PLANKS / BASES:- Different types of
positioning planks /bases are used by the marketers are:-
1. Economy:- Product positioned toward a particular segment keeping in
mind it economy.Example-Maruti 800, Tata Nano, Nirma detergent
powder etc are positioned for the economy segment
2. Benefit:- Product positioned with some beneficial features. Example-
Colgate total, Clinic plus etc.
3. Gender:- Product positioned for a particular segment. Example- Scooty
Pep, Titan Raga.
4. Luxury and exclusiveness:- Product or services positioned toward
luxury segment. Example-Taj group of hotel, Mercedes Benz E-class etc.
Mercedes Car - symbol of luxury and exclusiveness
5. Fashion for elite class:- Product positioned for fashionable elite class
or member of the society, who always want to stay ahead in term of
fashion and demands exclusive products only. Example Peter England,
Van Heusen, Raymond etc.
6. Technology and value added features:- Positioning of a product
according to its technological advancement and value added features.
Example:- Microsoft’s positioning of its recent operating system
Windows Vista as the advanced operating system, Sony with various
elecronic goods, LG etc
Preview of Microsoft’s window Vista operating system
· POSITIONING PLANNING
Positions are described by variables and within parameters that are
important to the customers. Common examples are price, supporting
services, quality, reliability, and value for money. Often, customers
position a product in relation to a brand or product that is especially
visible to them. This could be the market leader or any other offer with a
high media exposure and an above average
marketing budget. Therefore, it is advisable to use in-depth market
research to determine relevant parameters in order to understand how
customers rate different products and marketing variables.
The number of relevant parameters is normally low. Most often, they can
be described with a two- or three-dimensional matrix. This tool to
visually depict customers’ perceptions of a product and its position is
called perceptual mapping.

Segmentation Survey

• Need to define scope

– Who is the universe of relevant consumers?
• Current users
• Potential users/prospects
– What is the subject?
• Products, categories, usage occasions
• Best to cover ways to expand business
• Can be administered a number of ways – all have relative tradeoffs
– Mail
– In-Person
– Telephone
– Internet
• Must be project-able to the marketplace
– Balanced samples
– Weighted data (if necessary)
• Questionnaire must be
– Comprehensive of the subject matter – cover all topics that are relevant
to the
respondent.
– Questions are communicated clearly and uniformly
Segmentation Analytics
• Cluster Analysis – means of identifying and grouping
respondents by their answers. (Exercise)
• Several statistical approaches:
– K-Means cluster analysis is most typical
– Multiple-regression
– Latent class
– Canonical factor analysis
• Best done by Marketing Research firm with experience in
segmentation.
• Really a combination of art and science.
Market Segmentation:
Case study:
Following the identification of the gaps in the market, Musgrave
decided to segment the market of the independent retailer into two
groups:
◗ The "Trolley Shopper" who bought most of their groceries in
one weekly shopping trip to the supermarket.
◗ The "Basket Shopper" who made smaller purchases on a
more regular basis.
In 1979, Musgrave created two
new brands, SuperValu and
Centra to meet the needs of
both segments. SuperValu was
aimed at the "trolley shopper"
while Centra was expected to
cater for the "basket shopper". Both were offered as franchise
opportunities to independent retailers. The franchise Musgrave
offered was quite unique – it was purely voluntary and the
independent retailers did not have to pay a franchise fee, or relinquish
ownership. Instead, they would be provided with an extensive range
of services aimed at improving their performance. In return,
Musgrave would benefit from the increased sales of these retailers.

Benefit segmentation
• “Unconcerned” (25%)
– Basically buy on price
• “Ingredient Apathic” (17%)
– Concerned with reducing signs of aging; but not so concerned about
gentleness or specific ingredients
• “Price conscious socializers” (17%)
– Worried about looking better but price/value is a concern
• “stressed out” (22%)
– Not concerned about price; want effective product that reinvigorates
skin and reduces signs of aging
• “Age focused” (18%)
– Similar to “stressed out” group but with more attention to price and
natural ingredients.
Last two groups: 62% of Alpha-hydrox users, 54% of Plenitude, and
36% of Olay users
It is based on the Attributes (characteristics) of products, as seen by the
customers”

example, people buy something because it causes a benefit

ie. Diet coke - less sugar, lose weight
ie. Extra white toothpaste, whiter teeth, better smile
“Many marketers now consider benefit segmentation one of the most
useful methods of classifying markets”
ie. Watches
- the benefits customers looked for where durability and product quality-
older research was based on dividing the watch market according to a
different segment - once they used the new segment, they changed the
marketing plan- modern example would be price of PCs for home use -
biggest use is entertainment NOT schoolwork or home based businesses