Market

Segmentation,
Targeting and
Positioning
By : Prof Sameer Kulkarni
1
 The Starting Point
• Mass Marketing:
The Seller engages in –
1.Mass marketing>mass production>mass
distribution>and mass promotion
ONE PRODUCT FO ALL BUYERS.
It creates the largest potential market>leads to lower
costs>lower prices>higher margins

2
 Segment Marketing
• Role of Marketer
• The marketer does not create the segments
• The marketer identifies the segments and
decide which one to target
• The company can better
design>price>disclose& deliver the product to
satisfy the target market.

3
 Benefits of Segmentation
• Effective use of resources
• Gain a focus
• Create Value for a target market
• Positioning

4
 Steps in Market Segmentation,
Targeting, and Positioning
Market
Segmentation
1. Identify bases for
segmenting the market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments

Market
Positioning
5. Develop positioning
for
target segments
6. Develop a 5
marketing
 Step 1. Market Segmentation
Levels of Market Segmentation
Through Market Segmentation, Companies Divide Large,
Heterogeneous Markets into Smaller Segments that Can be Reached
More Efficiently And Effectively With Products and Services That
Match Their Unique Needs.

Mass Marketing
Same product to all consumers
(no segmentation, i. e. a commodity)

Segment Marketing
Different products to one or more segments
(some segmentation, i.e. Thumsup)
6
 Steps in Market Segmentation,
Targeting, and Positioning
Market Market Market
Segmentation Targeting Positioning
1. Identify 3. Evaluate 5. Identify
segmentation attractiveness possible
positioning
variables and of each concepts for
segment the segment each target
market segment
4. Select the
2. Develop target 6. Select,
profiles of segment(s) develop, and
communicate
resulting the chosen
segments positioning
concept
 Basic Market-Preference Patterns
(a) Homogeneous (b) Diffused (c) Clustered
preferences preferences preferences
Creaminess

Creaminess

Creaminess
Sweetness Sweetness Sweetness
 Step 2. Market Segmentation
Levels of Market Segmentation
Mass
Mass Marketing
Marketing
Same
Same product
product to
to all
all consumers
consumers
(no
(no segmentation)
segmentation)
Segment
Segment Marketing
Marketing
Different
Different products
products to to one
one or or more
more segments
segments
(some
(some segmentation)
segmentation)
Niche
Niche Marketing
Marketing
Different
Different products
products to to subgroups
subgroups within
within segments
segments
(more
(more segmentation)
segmentation)
Micromarketing
Micromarketing
Products
Products toto suit
suit the
the tastes
tastes of
of individuals
individuals and
and locations
locations
(complete
(complete segmentation)
segmentation)
Local Marketing Individual Marketing
Tailoring brands/ promotions Tailoring products/ programs
to local customer groups to individual customers
 Bases for Segmenting
Consumer Markets
Geographic
Region, City or Metro
Size, Density, Climate Demographic
Age, Gender, Family size
and Fife cycle, Race,
Occupation, or Income ...

Psychographic
Lifestyle or Personality

Behavioral
Occasions, Benefits,
Uses, or Attitudes
Step 3. Market Segmentation
Geographic Segmentation

International

National

Regional/City

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 Geographic Bases
• Region
• Density
• Climate
• Population
 Step 4. Market Segmentation
Bases for Segmenting Business Markets

Personal
Demographics
Characteristics

Bases
Bases
for
for Segmenting
Segmenting
Situational Business
Business Operating
Factors Markets
Markets Characteristics

Purchasing
Approaches
Step 5. Market Segmentation
Demographic Segmentation
• Dividing the market into groups based on
variables such as:
– Age
– Gender
– Family size or life cycle
– Income
– Occupation
– Education
– Religion
– Race
– Generation
– Nationality

14
 Step 6. Market Segmentation
Psychographic Segmentation
Divides Buyers Into Different Groups Based on:

15
 Step 7. Market Segmentation
Behavioral Segmentation
• Dividing the market into groups based on
variables such as:
– Occasions
– Benefits
– User status
– Usage rate
– Loyalty status
– Readiness stage
– Attitude toward product

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 Behavioral Bases
• User Status & Brand Loyalty
• Personality/Lifestyle
• Social Class
• Occasion
• Readiness to Buy
• Benefits Sought
• Usage Rate
 Step
Step 8.
8. Market
Market Segmentation
Segmentation
Segments
Segmentsmust
must respond
responddifferently
differentlyto
to different
different marketing
marketingmix
mix
elements
elements&&programs
programs
Requirements
R equirements for
for effective
effective segmentation
segmentation

• Size, purchasing power, profiles

Measurable
Measurable of segments can be measured.

• Segments can be effectively

Accessible
Accessible reached and served.

• Segments are large or profitable

Substantial enough to serve.
Substantial
• Effective programs can be
designed to attract and serve
Actionable
Actionable the segments.

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 Evaluating Market Segments

• Segment size and growth

• Segment structural attractiveness
• Company objectives and resources

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 Step 9. Market Targeting
Market Coverage Strategies
A. Undifferentiated Marketing

Company
Company
Marketing
Marketing Market
Market
Mix
Mix
B. Differentiated
Marketing
Company
Company Segment
Segment11
Marketing
MarketingMix
Mix11
Company
Company Segment
Segment22
Marketing
MarketingMix
Mix22
Company
Company Segment
Segment33
Marketing
MarketingMix
Mix33
C. Concentrated
Marketing
Segment
Segment11
Company
Company
Marketing
Marketing Segment
Segment22
Mix
Mix Segment
Segment33

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 Step 10. Market Targeting
Evaluating Market Segments
Segment Size and Growth
Analyze sales, growth rates and expected
profitability
Segment Structural
for various Attractiveness
segments.
Consider effects of: Competitors, Availability of
Substitute Products and, the Power of Buyers &
Suppliers.
Company Objectives and Resources
Company skills & resources relative to the segment(s).
Look for Competitive Advantages.
 Choosing a market-coverage
strategy
• Company resources
• Degree of product homogeneity
• Market homogeneity
• Competitors’ strategies

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 Five Patterns of Target Market
Selection
Single-segment Selective Product
concentration specialization specialization
M1 M2 M3 M1 M2 M3 M1 M2 M3
P1 P1 P1
P2 P2 P2
P3 P3 P3
Market Full market
specialization coverage
M1 M2 M3 M1 M2 M3
P1 P1
P = Product
M = Market P2 P2
P3 P3
 Step 11. Market Targeting
Choosing a Market-Coverage
Company Strategy
Resources

Product
Variability

Product’s Life-Cycle
Stage

Market
Variability

Competitors’
Marketing Strategies
Positioning is the act
of designing the
company’s offering
and image to occupy a
distinctive place in
the the target
market’s mind.
Step 12: Positioning for Competitive
Advantage
• Product’s Position - the way the product is
defined by consumers on important attributes -
the place the product occupies in consumers’
minds relative to competing products.
Marketers must:
– Plan positions to give their products the
greatest advantage in selected target
markets

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 Positioning Strategies
• Positioning by specific product attributes
• Positioning by benefits
• Positioning for user category
• Positioning for usage occasion
• Positioning against another competitors
• Positioning against another product class

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 Steps to Choosing and Implementing
a Positioning Strategy
• Step 1. Identifying Possible Competitive
Advantages: Competitive Differentiation.
• Step 2. Selecting the Right Competitive
Advantage: Unique Selling Proposition
(USP).
• Step 3. Communicating and Delivering
the Chosen Position.

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 The BCG Competitive
Advantage Matrix
Number of Approaches
to Achieve Advantage
Few Many
Advantage

Large
Size of the

Volume Specialized

Small Stalemated Fragmented

 Product Differentiation
• Physical attributes
• Service differentiation
• Personnel differentiation
• Location
• Image differentiation

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 Product Differentiation

Conform-
Fea- Perfor-
Form Quality ance
tures mance
Quality

Dura- Relia- Repair-

Style Design
bility bility ability
 Services Differentiation

Ordering
Ordering Customer
Customer
Installation
Installation

Miscellaneous
Ease
Ease Consulting
Consulting

Services
Customer Maintenance
Customer Maintenance
Delivery
Delivery Training
Training &&Repair
Repair
Which differences to promote?
• Important to customers
• Distinctive
• Superior
• Communicable to customers
• Preemptive
• Affordable
• Profitable

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Image Differentiation

Media Atmosphere

Symbols

Events
 Important
Important

Profitable
Profitable Distinctive
Distinctive
Differences Worth
Establishing
Affordable
Affordable Superior
Superior

Preemptive
Preemptive
Perceptual Map
Positioning
map of
service level
versus
price. Source:
MARG, 2007

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 Positioning Strategies
• Product Attributes
• Benefits, Problem Solutions & Basic Needs
••Cholesterol Free Oil:Dhara

• Specific Use : Gift for all Events Titan

• Against Other Products: Tata salt Vs. Captain Cook
• Product User :Fashion loving , Well to do Consumers :Vimal
fabrics
• Against a Competitor
•Price & Quality