Market

Segmentation,
Targeting and
Positioning
By : Prof Sameer Kulkarni
1
 The Starting Point
• Mass Marketing:
The Seller engages in –
3.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 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)
Micromarketing
Products to suit the tastes of individuals and locations
(complete 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

11
 Geographic Bases
• Region
• Density
• Climate
• Population
 Step 4. Market Segmentation
Bases for Segmenting Business Markets

Personal
Demographics
Characteristics

Bases
for Segmenting
Situational Business Operating
Factors 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
16
 Behavioral Bases
• User Status & Brand Loyalty
• Personality/Lifestyle
• Social Class
• Occasion
• Readiness to Buy
• Benefits Sought
• Usage Rate
 Step 8. Market Segmentation
Segments must respond differently to different marketing mix
elements & programs
Requirements for effective segmentation

• Size, purchasing power, profiles

Measurable of segments can be measured.

• Segments can be effectively

Accessible reached and served.

• Segments are large or profitable

Substantial enough to serve.

• Effective programs can be

designed to attract and serve
Actionable the segments.

18
 Evaluating Market Segments

• Segment size and growth

• Segment structural attractiveness
• Company objectives and resources

19
 Step 9. Market Targeting
Market Coverage Strategies
A. Undifferentiated Marketing

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

20
 Step 10. Market 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.
 Choosing a market-coverage
strategy
• Company resources
• Degree of product homogeneity
• Market homogeneity
• Competitors’ strategies

22
 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
 Posi ti oni ng i s the act
of des igning the
company ’s of fering
and image to occupy a
di stincti ve pl ace in
the the target
market’s mi nd.
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

26
 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 27
 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.

28
 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

30
 Product Differentiation

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

Dura- Relia- Repair-

Style Design
bility bility ability
 Services Differentiation

Ordering Customer
Installation

Miscellaneous
Ease Consulting

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

33
Image Differentiation

Media Atmosphere

Symbols

Events
 Important

Profitable Distinctive

Di fferences Worth
Estab lishi ng
Affordable Superior

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

36
 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