Principles Of

Advertising
SEGMENTATION, TARGETING AND POSITIONING BY MUHAMMAD
RAHEEL
A market segment

 A market segment consists of individuals, groups, or organizations

with one or more similar characteristics that cause them to have
relatively similar product needs

 This market segment can be an ethnic group, a geographical

region, or a specific country.
The Pepsi Example

 To create one of the largest global food brands and secure the
company's lead in the multibillion-dollar global snack food market,
PepsiCo Inc.'s international snack-food division made a series of
marketing and operations changes that ranged from new
packaging and advertising campaigns for Lay's potato chips to
overhauled manufacturing techniques to higher quality standards
for all PepsiCo products sold abroad.
 To market the brand overseas, the company more than doubled its
advertising spending—to $50 million.

 To satisfy the new consumers' culturally determined tastes, PepsiCo

came up with a shrimp chip for the Korean market, a squid-peanut
snack for Southeast Asia, and "cheeseless" Cheetos for China.

 The company also built plants in targeted countries to assure the

quality of its international potato chip products.
Limits of Advertising

 The Lay's potato chip story exemplifies this definition. Just as Mattell
created a diversity of dolls for a diverse market, PepsiCo created
different flavors of potato chips for its foreign markets

 Advertising can't do it all in attracting consumers to buy a product

Further examples of tailored
offerings according to markets?
 McDonalds McArabia.
 Gelatin Free Halal Products in Muslim Countries.
 Right hand cars and left hand cars.
The Purpose of Market
Segmentation
 The purpose of using market segmentation is to enable a marketer
to design a marketing mix that more precisely matches the needs of
consumers in a selected market segment.

It also realized that not all consumers have the same tastes,
especially in the global markets
How marketing and Advertising
complement each other.
 Marketing and advertising people constantly scan the marketplace
to see what needs and wants various consumer groups have and
how they might be better satisfied.

 One of the techniques they use is market segmentation.

 In the United States, target marketing of different ethnic groups is

now common practice
Methods for Segmenting the
Consumer Market
 Demographic segmentation involves dividing the market on the
basis of demographic variables such as age, sex, family size, stage
of family life cycle, income, occupation, religion, race, and
nationality.

 Marketers rely on these demographic characteristics because they

are often closely linked to customers' needs and purchasing
behavior and can be readily measured.

 Advertisers have earmarked more dollars for Hispanic advertising in

the United States in recent years, especially in major markets such as
Los Angeles, New York, and Miami.
Geographic Segmentation

 People in one region of the country—or the world—have needs

and purchasing behavior that differ from people in other regions.

 The urban and rural divide In Pakistan and other countries.

Behavioristic Segmentation

 Firms can divide a market into groups according to the benefits they
seek, volume usage of the product, and brand loyalty.

 In example working mothers prefer buying off the rack clothing and
ready to cook meals.
Psychographic Segmentation

 Dividing the market on the basis of lifestyle and/or personality is

referred to as psychographic segmentation.

 The determination of lifestyles is usually based on an analysis of the

activities, interests, and opinions (AIOs) of the consumers.

 In example : Value and Lifestyle Program (VALS)

 The VALS program places American consumers in three broad
groups: outer-directed, inner-directed, and need-driven consumers

 The VALS studies have been used to select advertising media and
determine advertising content.

 A VALS 2 classification categorizes consumers into five basic lifestyle

groups— strugglers, action oriented, status oriented, principle
oriented, and actualizers
Methods for Segmenting the
Industrial Market
 Geographic Segmentation

 In some cases, marketers find it beneficial to segment an industrial

market geographically. Like those who segment geographically in
consumer markets, industrial firms can concentrate their efforts on
areas with high population growth rates.

 For example most multinationals aim to capture high population

density markets like China, India, Pakistan and Indonesia etc
Type of Organization

 SME sector
 Large Organization.
 Public or private sector organization.
 Startups
 Multinationals
Product Use

 The way an organization will use a particular product is another

basis for segmenting industrial markets.

 Basic raw materials, in particular, may be used in numerous ways.

 How an organization uses products affects the types and amounts

of products purchased and business purchasing procedures.
Computers, for example, can be used at an advertising agency for
designing graphics or used in a university environment for word
processing or accounting purposes
 A computer producer may segment the computer market by types
of use because companies' needs for computers depend on the
purpose for which computer products are purchased.
TARGET MARKETING

 Once marketers group consumers or possible product users by

shared characteristics (demographic, geographic, or other
variables), they can proceed to the next step: target marketing.

 The way this is accomplished determines the content, design, and

implementation of the company's advertising.

Once a company defines its target market, it knows exactly where to

focus its attention and resources.
 It can shape the product concept (e.g., special features for its
product); establish proper pricing; determine the need for location
of stores; and prepare the most convincing advertising messages.

 Once the target market has been selected, a company must find a
way to fit the product to the selected market and to sell the product
to that market. This is no small feat. Product positioning is one
method marketers use to sell the product by setting it apart from
competitors.
PRODUCT POSITIONING

 Product positioning has been defined as "the art and science of

fitting the product or service to one or more segments of the broad
market in such a way as to set it meaningfully apart from
competition.“

 Product positioning refers to the decisions and activities intended to

create and maintain a certain concept of the company's product,
relative to competitors' brands, in consumers' minds.
 In advertising, nothing is more important than informing prospects
how your product is different. The idea of consumer perception is
critically important in differentiating products because the
differences between products can be either real or perceived.
Perceptual Mapping
Real vs Perceived Differences

 Real: Real differences might include features, price, or quality.

 Differences created by perceptions are typically based on a

product's image.

 Whether the differences between products are real or extrinsic to

the product or service, all marketers/advertisers take steps to ensure
that these differences do exist.
Example of positioning

 Coca-Cola has long positioned itself as the all-American choice,

while Pepsi has attempted to portray itself as "hip" and "cool" to
make Coke seem "dull."
 Product positioning is a customer's perception of a product's
attributes relative to those of competitive brands. To position a new
product or reposition an existing one, marketers need to know how
consumers or industrial buyers in its target market perceive products
in that category.
Recap

 A company must be able to locate possible customers, wherever

they are, and then be able to understand and communicate with
them.
 Marketing, the process of creating, distributing, promoting, and
pricing goods, services, and ideas to facilitate satisfying exchange
relationships, is the answer.

 Advertising alone cannot do it all.

 The consumer market segmentation process differs from the

segmentation process for the industrial market, but each market
must be segmented if a company's advertising is to be successful.
 Once a target market has been segmented, advertising must
position and differentiate the product or service from its
competitors.
 Thank you!