MARKETING STRATEGY

Vidya Panicker
Session 3
NOTES ON STPD STRATEGIES
Most important and fundamental tools in the marketers toolkit:
SEGMENTING TARGETING POSITIONING DIFFERENTIATION

These tools provide the platform on which most effective marketing programs are built.
All must be well considered and implemented if the firm is to be successful in managing a given
product-market relationship.

SEGMENTATION
The first step in the process of product promotion is Segmentation
The division of a broad market into small segments comprising of individuals who think on the
same lines and show inclination towards similar products and brands is called Market
Segmentation.
Market Segmentation refers to the process of creation of small groups (segments) within a
large market to bring together consumers who have similar requirements, needs and
interests.
The individuals in a particular segment respond to similar market fluctuations and require
identical products.
In simpler words market segmentation can also be called as Grouping.
Eg.
Kids
Males
Females
Youth
Students
Professionals /office goers
Elderly
Tourists
Patients (suffering from a particular ailment)

Anheuser Busch (Budweiser) premium beer for beer connoisseurs

Oshkosh Corporation emergency crash, rescue vehicles, refuse vehicles etc.
Nike sports goods, gear & apparels
Caterpillar construction & mining equipment , financial services and insurance
Titan Sonata, Raga, Fastrack, Regalia, Edge, Bandhan, Nebula, Octane, and Xylys

TARGETING
Once the marketer creates different segments within the market, he then devises various
marketing strategies and promotional schemes according to the tastes of the individuals of
particular segment. This process is called TARGETING.
Once market segments are created, organization then targets them.
Targeting is the second stage and is done once the markets have been segmented.
Organizations with the help of various marketing plans and schemes target their products
amongst the various segments.
Nokia offers handsets for almost all the segments. They understand their target audience well and
each of their handsets fulfil the needs and expectations of the target market.
Tata Motors launched Tata Nano especially for the lower income group.

POSITIONING
Positioning is the last stage in the Segmentation Targeting Positioning Cycle.
Once the organization decides on its target market, it strives hard to create an image of its
product in the minds of the consumers. Marketers create a first impression of the product in
the minds of consumers through POSITIONING.
Positioning helps organizations to create a perception of the products in the minds of target
audience.
Ray Ban and Police Sunglasses cater to the premium segment while Fastrack sunglasses target
the middle income group. Ray Ban sunglasses have no takers amongst the lower income group.

Garnier & Nivea offer wide range of merchandise for both men and women.
Each of their brands has been targeted well amongst the specific market segments. (Men,
women, teenagers as well as older generation)
Men - Sunscreen lotions, Deodorant
Women - Daily skin care products, hair care products
Teenagers - Hair colour products, Garnier Light (Fairness cream)
Older Generation - Cream to fight signs of ageing, wrinkles
A female would never purchase a sunscreen lotion meant for men and vice a versa. Thats brand
positioning.

Basis of segmentation
1. Demographic
Gender, Age, Marital status, Income, Occupation, Education, Race, Ethnic origin
2. Geographic
Classification of market depending upon geographical areas
3. Psychographic
Value, Attitude and Lifestyle segmentation (VALS, VALS-2) based on social class,
lifestyle, personality characteristics
4. Behavioural
Segmentation based on loyalty, usage pattern, occasions, benefits, user status, usage rate,
buyer readiness stage

Why market segmentation ?

Not all individuals have similar needs.
Males, females, kids, office goers, teenagers, the elderly have different set of needs
Market Segmentation brings together individuals with similar choices and interests on a
common platform. It helps marketers to devise appropriate marketing strategies and promotional
schemes as per the tastes of particular market segments. It helps marketers to understand the
needs of the target audience and adopt specific marketing plans accordingly. Organizations can
adopt a more focussed approach as a result of market segmentation.

Why market segmentation ?

It gives the customers a clear view of what to buy and what not to buy.
A Rolex or Omega watch high income group
Zodiac or Van Heusen store - visited by higher mid level executives
Nano or Alto low income group
Mercedes or BMW Top level Executives
It helps the organizations to target the right product at the right customers at the right time.
Geographical segmentation classifies consumers according to their locations. It helps the
organizations to know and understand their customers better. It helps the organizations to
concentrate their hard work on the target audience and get suitable results.
VALS SEGMENTATION
(used for Psychographic segmentation)

VALS FRAMEWORK
VALS is a marketing and consulting tool that helps businesses worldwide develop and execute
more effective strategies.
The system identifies current and future opportunities by segmenting the consumer market place
on the basis of the personality traits that drive consumer behavior.

VALS applies in all phases of the marketing process, from new-product development and entrystage targeting to communications strategy and advertising.

The basic tenet of VALS is that people express their personalities through their behaviors.

VALS specifically defines consumer segments on the basis of those personality traits that affect
behavior in the marketplace.

Rather than segregating people with like activities, VALS uses psychology to segment people
according to their distinct personality traits.

VALS 2 SEGMENTATION

Principle oriented motivated by abstract and idealized criteria

Status oriented buy products to demonstrate their success
Action oriented guided by need for social or physical activity, variety and risk taking

VALS 2 ( VALUES, ATTITUDES AND LIFESTYLE SYSTEM) for Segmentation

Proprietary psychographic consumer segmentation system that classifies people into eight basic
lifestyle groups on the basis of two dimensions: resources and self-orientation. Resource
dimension includes education, income, intelligence, health, energy level, and eagerness to
purchase resources that, in general, increase from youth to middle age decline afterwards. Selforientation is divided into three parts (1) Principle oriented: having set views. (2) Status oriented:
influenced by other's thinking. (3) Action oriented: seeks activity, adventure, and variety.

The eight basic lifestyle groups are (1) Actualizers, (2) Fulfillers, (3) Believers, (4) Achievers,
(5) Strivers, (6) Experiencers, (7) Makers, and (8) Strugglers.

VALS-2 was developed by the US consulting firm Stanford Research Institute (SRI) as an
improvement on its original VALS (introduced in 1978), a system that divided people into three
basic lifestyle groups (Need driven, Outer directed, and Inner directed).

Different Targeting Strategies Suit Different Opportunities

Undifferentiated Marketing (mass marketing)
eg. Coke, Pepsi, Knorr, Kissan
Differentiated Marketing (segmented marketing)
Marriott International
Marriott Suites...Permanent vacationers
Fairfield Inn...Economy Lodging
Residence Inn...Extended Stay
Courtyard By Marriott...Business Travellers
HUL (Soap category) : Lifebuoy, Lux, Dove, Pears, Rexona, Breeze
Concentrated Marketing (niche marketing)
Luxury brands (elite class), Harley Davidson (for bike enthusiasts)
Micromarketing ( local and individual marketing)
- micromarketing involves research about actual attributes, spending habits, lifestyle and
attitudes of target customers (specific types of wine, breads etc.)
- focus is on customization of products
Mass Marketing no segmentation ; marketing to all eg. Pepsi, Lifebuoy
Segmented marketing - The company decides to operate in several market segments and designs
separate offerings for each. (Lux, Dove , Lifebuoy)
Concentrated Marketing - Instead of going for a small share of a large market, the company goes
for a large share of one or few submarkets or niches (Star Cricket, Vertu, Ezee)
Micro marketing - Practice of tailoring products and marketing programmes to suit tastes of
specific individuals and locations (Kaya Skin clinic, Specific communities on Bharat
Matrimony)
1. Local marketing
2. Individual Marketing

Types of Positioning
1. Physical Positioning Involves comparison of only the physical dimensions of
alternative offerings . Based on technical data rather than on market data.
2. Perceptual Positioning Many consumers are concerned with the benefits a product
provides rather than the physical attributes. Their attitude towards a product is often
based on social or psychological attributes.

Steps in the Positioning Process

Identify relevant set of competitive products serving a target market

Identify the set of determinant attributes that define the product space in which
positions of current offerings are located.

Collect information from a sample of customers and potential customers about

perceptions of each product on the determinant attributes.

Determine products current location (positioning) in the product space and intensity
thereof.

Determine customers most preferred combination of determinant attributes

Examine the fit between preferences of market segments and current position of product
(market positioning).
(Identify positions where additional new products might be placed )

Write positioning statement or value proposition to guide development and

implementation of marketing strategy

Types of Positioning Strategies

Mono Segment Positioning
Multi Segment Positioning
Imitative Positioning
Anticipatory Positioning
Adaptive Positioning
Defensive Positioning

.contd..

In consulting engagements with General Electric in the 1970's, McKinsey & Company
developed a nine-cell portfolio matrix as a tool for screening GE's large portfolio of strategic
business units (SBU). This business screen became known as the GE/McKinsey Matrix (as
shown below) and is used for Portfolio Analysis.
Implications of Alternative Positions within the Market Attractiveness/ CompetitivePosition Matrix for Target Market Selection, Strategic Objectives, and Resources
Allocation

Differentiation can be achieved on the following parameters

Form
Features
Performance quality
Conformance quality
Durability
Reliability
Reparability
Style
Design
THANKS

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