issues

based o n c e r t a i n
aregenerally
OF BUSINESS MARKETS
SEGMENTATION
APPROACHES FOR THE
we
common variables for the segmentaion as
have some
Organisational markets may needs and benefits,
markets. These may include-geographic,
discussed in case of c o n s u m e r
basis of purchase criteria
like
c o n s u m e r s o n the
the marketers can group
usage rate etc. Further, industrial labs etc. The sequential process
followed by a
contractors,
government organizations, second
(organizational size, industry) going to the
segmentation
company starting with
macro
customers groups o n the
basis of price, service,
(Distinguishing
stage of micro segmentation Different business buyers can be segmented o n

quality) can help marketers identify segments. procedures-centralized, decentralised;

the basis of usage like heavy, medium, light;
purchase
and so on. The
-

leaseservice
or contracts; criteria - price, quality, loyalty
purchase policies with the
business marketing lies with the diligent marketers coming
Success of business to
with different
Tiexible market offering. For example, a laptop company
may offer same model
different features to meet the demands
of some segment
configurations or with options of

members.
B. Market Targeting
the
Th market segments. Segmentation provides
ere are approaches for developing
various
identifies its market - segment
key to farget Once an organization successfully
y
to
target marketing
marketing.
ones can be effectively targeted.
PPOrtunities, it has to select how many and which particular
 and P o s i t i o n i n e
Segmentation,
Targeting 19
Market

7.10 variables
with a
View fo llentify smaller
combine several at a t t e r a caretul
approach to decide this is to markets is
arrived

di to target
spNific
A derision ditterent
market segments
clear profile target grours
t evaluation tor that detine
Aaudtion ot various factors and their

Nesie 0

Slinte
05re

4GGETE M A R

The common approach followed by marketers to evaluate identified market segments

involves the detailed examination of two broad issues:
1. Comparative study as to the attractiveness of the identified market segnments.
2. Organisation's position and ability to compete in such market segments.
As all segmentatiorn schemes may not prove useful, it is very important to rate the
effectiveness of every segment. The criteria usually followed tor this involves a careful
examination of the issues discussed below:
 B. MARKET TARGETING
SELECTION OF TARGET SEGMENTS AND TARGETING MARKET
STRATEGIES
A detailed evaluation of the various identified market segments is aimed at helping the
marketers to select finally one or more segments to enter. The selection is carefully based on
assessing the opportunities considering the competitors as well as company's own capabilities to
enter such segments. The chosen
segments are thus targeted with further decisions as the
marketing mix and positioning strategy.
These can be studied under four broad categories:
(a) Single Segment Targeting
Organisations preferring single segment targeting are generally of the view that there is no
gniicant difference in consumer characteristics concerning their products or services. This is
also known undifferentiated
as
targeting strategy
the absence of any division of consumer groups, marketers decide to develop a single
E n g mix to serve all categories of consumers. Such situations may be experienced due to
 Market Segmentation, eting and Positioni
7.14
company s
c o n s u m e r s or
to marketine
Iimitations as to marketing orientat oning
lack ot awareness among the
with all the economies of large setationn. It
follows mass-marketing philosophy
usually low
For example, a company that has established c. lished
research and development expenses.
like Maruti-Suzuki, may not be capable to fora strong market
presence on the small-car market, oray into the
car market with similar success.
large
However, single segment targeting is not a preterred choice as there
re is
is ala
have been successtul with
always scope for
differentiated demand. The company might single
because the consumers lack in the knowledge of the product
segment
or company's own attitss. either
t its
offerings will serveall customers all times. In reality, there are always consumers with
needs and smart marketers who are more focused can always enter the market noci
threat of competition.
great

(b) Multi-segment Targeting

When a company chooses to target more than one segment, it needs to design its marketi
ting
mix. Separate marketing mix for every segment to serve the needs of consumers with speci
cific
profile may prove very challenging. Therefore, marketers make eftorts for marketing strateo
tegy
that would serve two or more well defined segments. The company needs to have thorouoh
understanding of the consumer profile to have separate brands that can be developed to serve
serve
each of the segments. For example, face creams with different brands for oily, dry, roueh
pimple care etc. can be covered under one marketing mix to serve the different consumer
segments. Multi-segment strategies are always preferred as they result in higher sales volume,
market share and profits. Such strategies lay greater emphasis on product
design, promotion,
marketing research and distribution managements. Car market is a good example of multi-
segment targeting as most companies are offering small cars, sports utility vehicles, family cas
luxury cars to serve the different consumer groups.
(c) Concentrated Targeting
A focused
marketing approach may be to serve only one market segment with single
marketing mix. The strategy allows for deep understanding of the customer profile and
continuous research and development is undertaken to serve its selected target consumers. The
underlying philosophy of focused targeting is to serve well the needs of narrowly detined
market segment instead of
dividing resources over several different segments. Sometimes
company's own limitations of business strengths may force it to reject the idea of entering
several segments.

However, concentrated targeting poses greater risks as the survival of such companies ma
become questionable if such segment turns unprofitable face sudden decline. The brand an
image of thecompany get strongly linked with its product restricting customers' in
about the company doing imaginatno
something else. For example, Lamborghini cars are the premium
targeted to serve the interests of
upper segment of the market only. The car is not meant be
offered middle and lower segments. But to serve the varied interests of
to t
ffers different cars to serve its different premium upper segment Oluy
segments.
d) Customized Marketing
Customized or individual marketing is also known as one to one pany
marketing. Every
 7.15
Targeting and Positioning
Market Segmentation, if the company is
The approach can be followed only
customized marketing.
implement
not customers for its product, services. Now-a-
can needs of the
to the individual
capable of respondilg sufficient purchasing power
prefer to make choices
informed, with
who a r e well a r e not required
days customers such marketing strategies
desires. Corporate following
their unique is required for marketing
that fulfill not e v e n any
detailed i n f o r m a t i o n
own products ready, up with
the idea of designing
to have their consumers. For example, Dell came

needs. Raymonds,
purpose regarding potential ot the customers to serve the individual
demand o r desire size available in
laptops as per the service. As an
alternative to the standard
with "Made to measure specifications through central
also came-up as per
customer
to stitch the garment the individual
it offered to suit
market, the finish ot readymade garment
location having
manufacturing
measurenments-and specitications.

c . MARKET POSITIONING

Prod uct Positioning

85% Sik Look hot Coke

Short sieeves Prolect you
UV protetion

a company's offerings
with unique characteristics
The term 'positioning implies developing These may
customers' belief in the product of the company.
and distinctiveprientation as to
or use, durability etc.
The objective is to
include style, high quality, how price, easy application
minds of the target consunmer groups.7
Create distinctive image and occupy a specific place in the attitude and response
The positive perception, thus created, direttty inffuences customers
towards the company's products.
marketing strategy which is the net outcome of targeting
Market segmentation is basic to all
and positioning. Smart marketers identify the differentiated needs of consumer groups,
understand and profile their needs, and target those that can be satisfied in a superior way.

Finally, they position their product or services so as to target market to recognize the
attract
to develop images concerning the
Company's distinctive offerings. It is very important
Company's offerings and create desired positive perceptions in the minds of the target
consumer

to
8roups. A successful brand positioning helps in orientation with the target consumers as
Serving their specific interests in a unique way.

Characteristics of Positioning
Once a
company selects its target market, it needs to determine and design its
offerings that
iave differentiated value. Such superior values require successful communication to the target

Consumers to attract them.

 M a r k e t S e g m e n t a t i o n ,
Targeting and Pos

with
following characterict.
follow characteris
approach
7.16 has to
follow a n V
provide a
compa
s e g m e n t a t i o n

a company
market
caroc
For positioning,
The process
of
groups.
However, a
careful selection
segment:
c o n s u m e r

or bi.
trengthwit
market c o m p e t e n c i e s
d i f f e r e n t i a t e d

s
(i) Target of
duly supported
company
choices terms
of
market is not duls.
more
in
with one or assessed
chosen target
needs to
be if the
market futile
target mav prove
exercise
whole that
that the
the company shoul
c o m n a .

too. The
and
competencies.

It is very
essential
ld come
required
r e s o u r c e s

Advantages: win the attractionattraction of the

(ii)
Differentiated
Values or
difterential
advantage
to
of the consur targ
with some
superior
value o r
values to serve
the
interests
olve
up of the unique
The clarity
customers.
Ilt is veru ;m
clear positioning strategy.
Value to the
Customers:
ortant
Differentiated
values of tho
of the differentiated
Communication
with the
(iii) c o n s u m e r s

customers. The custo

of the target connect with
tool to co
orientation
facilitate
is the most popular the message
should be converse
Advertising and
ofterings distinctive ddvantages
well about the
know
unambiguously.

STRATEGIC POSITIONING

Derfor.
valuable position, requiring mance
refers to evolve a unique and
Strategic positioning with the rivals. Every
positioning requires a differer
compete
system_. The unique set of tasks
of tasks to
of a different set
resources, or management
product, equipments, human ultimate competitive edge
to marketer,
provides the
forming the strategic positioning
flow from difterent
sources such as (a) producing a sub-set ofth
Strategic positions may of the target market: le
the most or all the requirements
company's products (b) focusing on similar needs.
for the c o n s u m e r groups with
Differentiating accessibility approach
to evaluate and select set
To achieve sustainable competitive advantage it is very important
of the company. Strategic positioning
of tasks which should be compatible with the objectives
in individual tasks
generally aimed for long-run, however it is important to foster improvement
on continuous basis. At the same time, frequent changes should be avoided as they mav prove
costly and adversely affect the profits.

POSITIONING AND UNIQUE MARKETING MIX

To achieve the desired positioning, marketing mix and its uniqueness are the powerful tools
used by marketers to serve the interest of the customers of its target markets.
Aglifferentiated marketing mix may have any of the combinations of the following
Jay Product Differentiation
Product differentiation aims at
adding
unique features that cannot be matchec
some
Competitors. An exterisive research may provide lead to the
company for the need or s
particular Teatures in a
product among the customers'Aashirwad
Atta' ith multigrau
IS

good example of product differentiation.

(b) Promotional Differentiation
Approach for the orientation with the customers in a valued

unique manner can

Market Segmentation Targeting and Pos/tioning
7.17
images. rally, advertising with (unique meshageDcomprisiny emotions, story lines,
Generall

ertainment or humour, çelebrities may' prove beneficial connecting with the target customers.
entert

ations,
Customer relat persuasion and sales presentations form an important part of promotional
programme.

Distribution Differentiation
Ease of accessibility anconvenientbuying situationseeping; in view different group of
their needs can provide an edge to a Ompany over its rivals. Advancement of
customers and th
technology and time compressed customers have led to the new distribution methods like

internet marketing, telemarketing departmental market places etc. An appropriate strategy

requires understanding theneeds of the target consumers and evolve most suitable distribution
channel to serve best theindividualneeds oftarget markets.
(dPrice Differentiation
The target markets need to be assessed in terms oprice factor)for the offerings ot arny
company. The value composition of the offerings and price for thesame determines the response
of the target consumers. Further, the target markets can bdpriceinsensitive! moderate or nigniy

sensitive. A company may have established brand loyalty among consumers by serving their
desired value of the highest order Most products in this category are indicative of exclusive
the other
collection or symbol of status ot luxury ike BMWcars or Mercedes-Benz cars. On
but seldom
hand, highly price sensitive target markets are always look on for the better products
sensitive segment is ready to pay higher price for
prices.)Moderate price
ready to pay higher
additional features or enlarged benefits like in case of cellular phones or laptops.

POSITIONING WITH POINTS OF PARITY AND POINTS OF

OF

DIFFERENCES
the unfulfilled demands or
The whole process of market segmentation ainms at identifying
consumer groups desirous of specific
values. Any brand positioning while targeting such
markets requires intelligent and effective communication to the target consumers as to the points
to differentiate a brand from the
of parity and points of differences. It is very important
benefits or features provided by the brand and at
competitors. The focus should be on specific
can provide the same. The points
the same time with effective message that no other competitor
consumers who generally remember the
of differences are easy to capture the attention of target
brand for its differentiated features of the product. For example - Savlon highlighted its main
market dominated by Dettol
feature ('no-sting establish itself in the antiseptic lotion
yto
competition with other
However, the points of parity are also equally important to tight tough market with frame of
the
brands in the category For example the bran&l Fogg deodoranPhit
-

have both-point of difference as well as point of

referencefNo Gas, only Deo.)A brand may
has created brand in terms of taste and
parity. For example Subway in fast foods category at the
taste while competing with McDonald's and
healthy food'. It has points of parity for
Same time having point of difference as to healthy food.
brands to monitor points of parity on continuous
for the established
the new important
It is
basis as equally entrants would always look on for the points of differences from such brands

differences from the established brands like

ICICI and HDFC offering
Strong points of
 Market Segmentation, Targeting ane
and Positionins
7.18 of
ditterence ted to
adopted to
fight well
point
services to open
account from home
1s a

establishesh.
competitor SBI. that
succCsstul positionino
ning is the
clear

From the above discussion

it becomes

propOsition
and ensuring
that each com
onent of ability
marketif
create unique
value
that all the four elona
marketer to
It is very important ents of marketin
to its positioning. r e i n t o r c e each other, contrih.
mix conforming
the target
markets shall and convey
mix while positioning establish a brand.
w a y to
in a positive
s a m e message

POSITIONING
ESSENTIAL
ELEMENTS OF SUCCESSFUL
in terms of establishing connectivity
will
can be assessed
customers providtarge
Successtul positioning the minds of custon
created in
tavourable images
customers. The strong
values are the success mantras of positioning E ding
differential advantage or unique
tashion along with mple
comfort
positioned with unique trendy
Life style Apparel has
connect with target c o n s u m e r s .
strong
differentiated teatures to

NEW PERK RANGE

TAKE IT IGHTU

Similarly, Cadbury launched its new offering; Cadbury Perk in 1996, with its light chocolate
and wafer construct,
Cadbury Perk targeted the casual snacking
dominate space that was
primarily by chips & wafers. With a catchy jingle and tongue in cheek advertising, this 'anytime
anywhere' snack zoomed right into the hearts of teenagers. Cadbury Perk became the new
snack in town and its proposition "Thodi si pet pooja" went on to define its role in the m
As the years progressed, so did the messaging, which changed with catego
changes in the consune
way of life. To compliment Cadbury Perk's values, Cadbury Perk moved
beyond just own
hunger' to a "Kabhi bhi kaise bhi" position, because the urge for
Cadbury Perk could s rike
nytime and anywhere. With the rise of more value-fo late
ney brands in the water choco
»gment, Cadbury Perk unveiled two new Per offerings and XXL.
 AStICCeSsful positioning includes the following elements:
(i) Clarity
or
Smart marketers must intelligently target the markets that are clearly understood in terms
mer profile with clear-cut demarcation of the differentiated value proposition. It is equally
r t a n t to ensure that such distinguished value propositions are successfully communicatea
to
h e consumer thrOugh appropriate advertising. Advertising agencies may not always convey
he desired message to the target consumers as images, stories or jingles may not establish soun
the
and effective connectivity with the value proposition of the offering.
(ii) Consistency
Frequent switchovers in the positioning of a brand may create confusions in the minds or the

Customers. company With strong positioning of status and luxury switching over to product
A

performance may
fail to align itself with the new positioning. It is equally worth while to
consider that consistency does not imply permanence. The initial positioning of a company may
change to serve the customer demand with differentiated value proposition.
(iii) Honesty and Credibility
The ultimate success of with clearing the test to win the trust of the target
positioning lies
must ensure to deliver the
consumers for the claimed differentiated values. A company
made in positioning can be
promised utility or advantage. The trustworthiness of the promises
cellular phones to the
built through personal use of the product. The cellular marketers provide
values and thus
sales persons to understand and use to enable them to convey the distinguished
relations play an important
establishing credibility of the positioning. Advertising and public
which a company delivers what it
role but successful positioning depends upon honesty with
promises.
(iv) Competency
serve the interest of the
Positioning is aimed at offerings with something of unique value to
customers that no other competitor is providing.
The success of such positioning lies in the
distinct set of resources and processes enabling
ability and competency of a company to ensure all the resources that are
it to deliver distinguished values. Therefore, a company must possess
essential to create and process its that no other competitor can deliver.
offerings
(v) Brief and Catchy
The appeal and
The positioning of brand essentially depends on its clarity and preciseness.
a
and catchy. It should create clear image in the minds of
message to the customers should be brief
is the best to serve their interests.
the customers with strong reasons why the company's oftering
market positioning are the three major steps for
Market segmentation, market targeting and
marketers must always choose target markets in ar
target marketing. It is very important that
ethically and socially responsible manner.