Segmentation

Targeting Positioning

Steps in Market Segmentation, Targeting, and Positioning

Segmentation Targeting Positioning 5. Identify possible positioning concepts for each target segment 6. Select, develop, and communicate the chosen positioning concept

1. Identify segmentation variables and segment the market 2. Develop profiles of resulting segments

3. Evaluate attractiveness of each segment 4. Select the target segment(s)

Segmentation

Basic Market-Preference Patterns

(a) Homogeneous preferences (b) Diffused preference s (c) Clustered preferences

Comfort

Comfort

Time

Time

Comfort

Time

Levels of Market Segmentation

Mass Marketing Same product to all consumers (no segmentation)
Segment Marketing Different products to one or more segments (some segmentation) Niche Marketing Different products to subgroups within segments (more segmentation) Micro Marketing Products to suit the tastes of individuals and locations (complete segmentation) Local Marketing
Tailoring brands/ promotions to local customer groups

Individual Marketing
Tailoring products/ programs to individual customers

Steps in the Market Segmentation

Determine Market Boundaries
Decide Which Segmentation Variables to Use Collect and Analyze Segmentation Data Develop a Profile of Each Segment Target Segments to be Served

Design a Marketing Plan

Effective Segmentation
Measurable
Substantial
Size, purchasing power, profiles of segments can be measured. Segments must be large or profitable enough to serve. Segments can be effectively reached and served. Segments must respond differently to different marketing mix elements & actions.

Accessible
Differential

Actionable

Must be able to attract and serve the segments.

Bases for Segmenting Business Markets

Geographic
Region, City or Metro Size, Density, Climate

Demographic
Age, Gender, Family size and Life cycle, Race, Occupation, or Income ...

Psychographic
Lifestyle or Personality

Behavioral
Occasions, Benefits, Uses, or Attitudes

Segmenting Business MarketsContd.

Personal Characteristics

Demographics

Situational Factors

Bases for Segmenting Business Markets

Operating Characteristics

Purchasing Approaches

Targeting...

Evaluating Market Segments

Segment Size and Growth
- Analyze sales, growth rates and expected profitability for various segments.

Segment Structural Attractiveness

- 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.

Five Patterns of Target Market Selection

Single-segment concentration M1 M2 M3 P1 P2 P3 P1 Selective specialization M1 M2 M3 P1 P2 P3 Market specialization M1 M2 M3 Full market coverage M1 M2 M3 P1 P2 P3 Product specialization M1 M2 M3

P2
P3

P = Product M = Market

P1 P2 P3

Market Coverage Strategies

Company Marketing Mix A. Undifferentiated Marketing Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 3 B. Differentiated Marketing Segment 1 Company Marketing Mix Segment 2 Segment 3 C. Concentrated Marketing Segment 1 Segment 2 Segment 3 Market

Market Coverage Strategies Contd.

Undifferentiated Marketing
- Ignores the segment differences, and targets the entire market with one offer. - Mass Distribution & Mass Advertising, trying to leave an image on consumers mind. - Low costs involved in R&D, Production, Inventory, Transportation, Marketing Research, Advertising & Product Management.

Differentiated Marketing
- Different products for different segments e.g. Wipro - Boosts Sales. But higher costs are involved in all areas, from product manufacturing to delivery.

Positioning...

So, what exactly is Positioning?

Positioning, per se is the act of designing the companys offering and image to occupy a distinctive place in the mind of the target market.

So, what exactly is Positioning? Contd

In a nutshell, Positioning is not what you do to a product.. Positioning is what you do to the mind of the prospect!!

Product Positioning consists of 3 steps:

Identifying a set of potential competitive advantages. Selecting the right one(s). Effective signaling of the positioning concept to the target segment(s).

The BCG Competitive Advantage Matrix

Number of Approaches to Achieve Advantage
Few Many

Large Size of the Advantage

Volume

Specialized

Small

Stalemated

Fragmented

Method for Competitive Advantage Selection

Competitive Advanatage Company Standing Competitor Standing Importance of improving Standing (H-M-L) Affordability and Speed Competitors ability to Improve Standing (H-M-L) Recommended Action

(1-10)

(1-10)

(H-M-L)

Technology

HOLD

Cost

MONITOR

Quality

MONITOR

Service

INVEST

Major positioning errors to avoid...

Under positioning
- Buyers see the company just as any other company.

Over positioning
- Buyers may see the company too narrowly.

Confused positioning
- Buyers may have a confused image of the company.

Doubtful positioning
- Too many product features claimed by the company, leaves the buyers skeptical.

Positioning Strategies.. (by Ries & Trout)

Strengthen & Leverage current position in the minds of the consumer.
Search for a new un-owned position valued by enough customers & grab it. De-position/Re-position the competition. Exclusive Club strategy.

Last but not least, Psychological Positioning must be augmented by Real Positioning. Its not just a mind game after all!!

Case Study

Reliance Info-Comm

Segmentation
Segmentation Variables
Usage,Population Density,Age,Income etc.

Segmentation Profiles
Usage: High, Economy, Enterprise Population: Mega polis, Metros,Townships

Targeting & Positioning

Product/ Market

Enterprise

High Usage

Economy

Enterprise Data Terminal

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Packed with special applications like Sales Force Automation

India Mobile @21k

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Industry dependent On Oil And Gas

REFINERY POWER SECTOR ELECTRICITY TRANSPORT SECTOR CNG PETROCHEMICAL HIGH, LOW VERY LOW POLY DENSITY POLYETHY LENE, POLYPROP YLENE FERTILISER DOMESTIC FUEL LPG

PETROL ATF HSDO LDO FURNACE OIL LUBES GREASES BITUMEN WAXES

UREA

CRUDE OIL

GAS

The End