Professional Documents
Culture Documents
CONSUMER
SEGMENTATION
Ch # 7-Segmentation, Targeting & Positioning
Market Segment
• A subgroup within the market who share
certain relevant characteristics
• A group of customers with certain
characteristics in common & whose needs
can be met with a distinct marketing mix
Ch # 7-Segmentation, Targeting & Positioning
3 basic questions
• Who is buying?
• What do they buy?
• When do they buy?
Ch # 7-Segmentation, Targeting & Positioning
Steps to segmentation
Ways to segment
• Geographic: by geographical area
• Demographic: by population
characteristics
• Psychographic: classification on the basis
of psychological factors
• Behavioral: classifying by purchasing
behavior
Ch # 7-Segmentation, Targeting & Positioning
Ways to segment
Geographic Demographic
Region Age
Urban/Sub urban Gender
Occupation
Socio-economic group
Psychographic Behavioral
Life style Rate of usage
Personality Benefits sought
Social status Loyalty status
Readiness to purchase
Ch # 7-Segmentation, Targeting & Positioning
Evaluation of segments
Segmentation strategies
• Undifferentiated: Ignore
segments
• Concentrated or focused:
Concentrate on a single
segment (Small firms)
• Differentiated: Different
marketing mix for each
segment (Large firms)
Ch # 7-Segmentation, Targeting & Positioning
Segmentation strategies
Undifferentiated Firm Market
Marketing
Segment A
Segment B
Differentiated Firm
Marketing Segment C
Segment D
Segment A
Concentrated/Focused
Firm Segment B
Marketing Segment C
Segment D
Ch # 7-Segmentation, Targeting & Positioning
Undifferentiated Strategy
• Also known as market aggregation
• Targets entire market with the same
marketing mix – segments ignored
• Used when segments cannot be identified
or where aggregation proves more
profitable than segmentation
• Ford’s Model T car were sold as the
universal car – “any car as long as it is
black”
Ch # 7-Segmentation, Targeting & Positioning
Concentrated strategy
• Marketing effort directed at a single highly
defined segment
• Niche marketing – Rolex watches
• Used when one group is especially
attractive for the organization to target
• A useful strategy for smaller firms – avoids
a head on collision with major players
• Provides scope for competitive advantage
in a small niche in the market
Ch # 7-Segmentation, Targeting & Positioning
Differentiation Strategy
• Multi segment approach
• Separate mix for each segment
• Expensive In terms of product & marketing
cost
• Only possible for large firms
Ch # 7-Segmentation, Targeting & Positioning
POSITIONING
Ch # 7-Segmentation, Targeting & Positioning
Positioning
• Arranging for a brand or product to occupy
a clear and distinctive place in the minds
of the target customers relative to
competing products and brands
Ch # 7-Segmentation, Targeting & Positioning
Differentiation
• The basic principle is that you must either:
- Differentiate your product
- Be a provider of generic products to be sold at
the lowest prices
Ch # 7-Segmentation, Targeting & Positioning
Perceptual map
• The visual representation of a brand within
a specific market place showing its
position relative to competitors
• Shows which and how products compete
in consumers mind and suggests how a
product can be positioned to maximize
sales
Ch # 7-Segmentation, Targeting & Positioning
Limited range
Ch # 7-Segmentation, Targeting & Positioning
Approaches to Positioning
• By attribute:
- Associating the brand with a desirable
attribute
- E.g. Volvo cars associated with safety &
durability
• By price & quality:
- Price level should be right to reflect quality
- E.g. Rolls Royce – High priced with quality
Ch # 7-Segmentation, Targeting & Positioning
Approaches to Positioning
• With respect to application/use:
- Kit Kat is positioned to link in with tea or
coffee break “Have a break – Have a Kit
Kat”
• By product user:
- E.g Ufone - “Everybody loves to Ufone”
Ch # 7-Segmentation, Targeting & Positioning
Mistakes in Positioning
• Under positioning: Consumers
have limited perception of the
brand & are unaware of the
distinguishing features
• Over-positioning: Consumers
believe that the brand in only
active in very focused markets
• Confusion: Consumers are
unclear how a brand is
comparable with other brands
Ch # 7-Segmentation, Targeting & Positioning
Re-positioning
• Changing the position of the product in the
market
• It becomes necessary sometimes:
- To extend the product lifecycle
- To move into a new market segment
- Because of changes in society & in social
attitudes
- The brand evolves with time
Ch # 7-Segmentation, Targeting & Positioning
Re-positioning
• Image re-position: No change in the product.
Promotion is used to change the image of the
product.
• Product re-positioning: Modification of the
product
• Intangible re-positioning: Targeting a different
market segment with the same product
• Tangible repositioning: Change in both product
& target market
Ch # 7-Segmentation, Targeting & Positioning
Re-positioning Example
• Johnson & Johnson Baby
shampoo:
Originally aimed at infants.
Re-positioned as a gentle,
frequent use shampoo for
the adults as well as babies.