7/10/2021

Dr. Ekta Srivastava

ektasrivastava@iimk.ac.in
FC-08, Phase V, IIM Kozhikode Campus

Market Segmentation, Targeting & Positioning

Introduction

To be used only for instruction purpose at IIMK

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STP

• Identify and profile distinct groups of buyers (market segmentation).

• Select one or more market segments to enter (market targeting).

• For each establish and communicate benefits of offering (market

positioning)

To be used only for instruction purpose at IIMK

What is a Market Segment?

• A market segment a relatively homogeneous group of consumers

who will respond to a marketing mix in a similar way

To be used only for instruction purpose at IIMK

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What is Segmentation?

• Art of segmentation involves the ability

to creatively carve out refreshingly new
consumer groups which are large and
distinctive.

To be used only for instruction purpose at IIMK

Bases for Segmenting Consumers

Geographic

Demographic

Behavioral
Psychographic To be used only for instruction purpose at IIMK

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Demographic Segmentation

Age and Life Cycle

Life Stage
Gender
Income
Generation
Social Class

To be used only for instruction purpose at IIMK

Psychographic Segmentation

• Personality traits
• Lifestyle
• Values

To be used only for instruction purpose at IIMK

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Behavioural Segmentation
Usage occasions
User status

Usage frequency
Buyer-readiness
Loyalty status
Decision roles User and Usage

Needs and Benefits To be used only for instruction purpose at IIMK

Types of Segmentation
• Based on benefits sought by customers (need-based)

• Based on observable characteristic of customers

(demographics/geography/lifestyle/ usage behavior)
• Easily identifiable and addressable with a marketing message

To be used only for instruction purpose at IIMK

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Steps in Segmentation
1. Understand the benefits that customers seek
2. Segment the market and develop prototypical customer profiles
based on benefits
3. Find the observable variables which are most likely to discriminate
among the benefit segments

To be used only for instruction purpose at IIMK

Effective Segmentation Criteria

Measurable

Substantial

Accessible

Differentiable

Actionable

To be used only for instruction purpose at IIMK

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Levels of Segmentation

To be used only for instruction purpose at IIMK

Evaluating and Selecting Segments: Targeting

Multiple segment
Single/niche-segment specialization
concentration

Full market coverage

Individual Marketing

To be used only for instruction purpose at IIMK

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Target Market Selection

Key- Understand Differentiation

Collect and compare data of the company and competitors to evaluate who is most likely to succeed
• Ability to conceive and design – R&D capability/budget, patents/copyrights etc.
• Ability to produce (quality and quantity) – production technology/capacity
• Ability to market
• Ability to finance
• Ability to manage/ execute

Focus on CSFs in a product category

Produce competitor capability matrices, one matrix for each segment
Does not predict competitive reactions

To be used only for instruction purpose at IIMK

Market Targeting: Porter’s Five Force

Threat of Bargaining
Substitute Power of
Products Customers
Bargaining
Threat of power of
New Suppliers
Entrants
Rivals

To be used only for instruction purpose at IIMK

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Patterns of Target Market Selection

To be used only for instruction purpose at IIMK

Patterns of Target Market Selection

To be used only for instruction purpose at IIMK

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Patterns of Target Market Selection

To be used only for instruction purpose at IIMK

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