UNIT-2

SEGMENTATION, TARGETING AND POSITIONING

SEGMENTATION- it is related to the division of market so as to make the market a
definable segment, a mass of people who can be identified and targeted with reasonable
effort, cost and time. Segmentation provides a clarity to the customer in the crowded market.
Through segmentation the marketer is able to provide the product to the consumer as per their
needs, desired, uses and paying ability.

TARGETING- in this strategy the marketer breaks the market into smaller segment so that a
specific group of consumers can be targeted. The consumers are targeted on the basis of their
unique characteristics and needs focuses on them.
The types of target market of often segmented by characteristics such as:
 DEMOGRAPHIC- age, gender, education, marital status, race religion
 PSYCHOGRAPHICS- values, beliefs, interests, personality, lifestyle
 BUSINESS INDUSTRY
 GEOGRAPHIC AREA- neighbourhood, area code, city, region, country

IMPORTANCE OF TARGETING IN MARKET

 Speak directly to a defined audience- targeting becomes successful when the
marketer is able to convey the information to the consumers directly. It is important
that the consumers must understand what the marketer is actually trying to
communicate about their product and service.

 Attract and convert high-quality leads- the decided communication about the
product must be in such a manner that maximum number of consumers are attracted
towards the product. It is important that consumers clearly identify the brand and
image through the unique selling strategy to target the consumers.

 Build deeper customer loyalty- this ability helps the marketer to stand out from their
competitors by reaching consumers on a more personal level which creates a long-
lasting relationship. It is very important that the consumers take the brand as their
own and finds the right way of their personal identity through the sued brands.

 Improve products and services- with deeper consumer relationship marketer always
gets the insight of the room of improvement of their product, this makes the marketer
to keep their product always updated as per the demand of the present scenario and
consumer thought process.

 Stay focused- at this point it is important for the marketer to remain focused about the
idea that his loyal customers must stay with them. Therefore the marketer has to
remain focused about the changing requirement of their consumers and then
 accordingly they must keep their product updated with better services as demanded by
the customers.

FACTORS INFLUENCING MARKET SEGMENTATION

Market includes a large number of buyer who vary from each other in so many different
aspects, right from their age, gender, religion, to financial status, social class, kind of job they
are into and so many different aspect. This makes the segmentation of the market is
challenging one. Therefore, there are various factors which influence market segmentation
 Resource of the organisation- segmentation needs a lot of monetary investment
therefore the financial condition of the organisation plays a vital role as the factor of
segmentation. If the organisation is not well established and resourceful then it cannot
do the segmentation in a fruitful manner.

 Product lifecycle- this factor also influences the market segmentation very deeply.
Every product has a life cycle from introduction, growth, maturity, saturation and
decline. Segmentation is done when the product is at the stage of growth and maturity.
The better and more focused the segmentation at this stage of the product the life
cycle of the product increases in the market.

 To provide more offers to the consumers- the market segmentation can only be
successful when the marketers remains focused to their consumers and offer them bets
of the products.

 Opportunities for growth- the more sensible and appropriate segmentation will be
done by the marketer the better he will have the opportunity of growth for the product
and services.

 Understanding the market- segmentation can only be done when one understands
the market sensibly and seriously and then after understanding the market mood the
fulfilment of the need is another crucial factor.

MARKET AGGREGATION

It refers to that marketing process in which a particular product or service is marketed to a

large set of consumers with same kind of demands and needs. Market aggregation means
mass marketing or undifferentiated marketing.
Market aggregation is done to large number of consumers who belong to the same
segmentation. It helps the marketer to move on with reduced cost of marketing, reduced cost
of manufacturing and also the reduced cost of consumers. It is related to the products which
are the necessities of the consumers like sugar, toothpaste.
 USES
Market aggregation is used in many different fields. There are many products which are high
in demand and use. There are certain products which are high in everyday demand.
Depending upon the usage of the product and service the concept of market aggregation
works out. Market aggregation generally refers to that approach of marketing in which a large
group of consumers are sold the same product. It is also related to that aspect of marketing in
which a large number of product is marketed to individual customers.
ADVANTAGES
1. Reduces production cost and marketing cost which can ultimately reduce cost for the
consumers.
2. An excellent way for marketers to enhance product differentiation.
3. Consumer can differentiate their product from similar products available in the
market.
4. Helps the marketers to identify which brand is superior to the other. Also helps the
companies to maintain a good relationship with their consumer and to gain consumer
loyalty.
5. Companies get more opportunity to promote their products and brands in a broader
market because more consumers are involved in it.

DISADVANTAGES
1. The strategy of market aggregation lacks product diversity, which means while
promoting any specific product to a certain group of people no other products or
services are promoted. Focus is only on one product, no diversification in the
marketing.
2. Market aggregation fails to identify the ability of the markets, as it fails to understand
the actual need of the specific group of customers.
3. In market aggregation the marketers targets a large number of the consumers for one
specific good which open the door for the rivals to promote their other products in the
market to the same and different consumers.
4. In mass aggregation the company can only satisfy the needs and wants of one
particular group of people. Therefore, they do not go on meeting the needs of every
single individual in the market.

BASES OF SEGMENTATING CONSUMER MARKET

The four bases of segmenting the consumer market are:-
 DEMOGRAPHIC SEGMENTATION
 GEOGRAPHIC SEGMENTATION
 PSYCHOGRAPHIC SEGMENTATION
 BEHAVIOURAL SEGMENTATION
 1. DEMOGRAPHIC SEGMENTATION- here the segmentation is done on the basis
of age, gender, income, occupation, family, education, religion, race and nationality.
It is the most popular bases of segmentation because under this segmentation the
marketer very successfully becomes capable of catering the needs, wants and
demands of the consumers therefore, the satisfaction is very strongly provided to the
consumers.

2. GEOGRAPHIC SEGMENTATION – here the segmentation is done on the basis of

different geographical units such as nations, sates, regions, cities or neighbourhoods.
As for instance a national newspaper publishes the same news all over the nation in
different languages to cater the consumers of different languages. Other geographic
factors like climate, terrain, natural resource, and population density also plays an
important role as these factors influences the needs and demands of the consumers at
a very significant level.

3. PSYCHOGRAPHIC SEGMENTATION- here the segmentation is done on the

basis of consumers’ lifestyle and personality traits. There are certain cases behaviour
which are executed under the core guidance of a person’s liking, lifestyle and
behaviour.

4. BEHAVIOURAL SEGMENTATION – here the segmentation is done on the basis

of the consumers’ knowledge of product, attitude towards the product, use of product
and response to a product. This segmentation is also related to the occasions, user
status, usage rate, and loyalty-status, buyer-readiness stage.

The segmentation basis is also related to the following points:-

 INCOME- this is a major factor of purchasing among the consumers. It is a deciding
factor about the need of the consumer. Being an decisive factor the category of
Income is divided into 3 groups
HIGH INCOME GROUP
MID INCOME GROUP
LOW INCOME GROUP

 PLACE – the living place of the target consumer is one such factor which may not
seem important on the superficial level but deep down it strongly affects the buying
decision of the consumers.

 OCCUPATION- the aspect of occupation looks very similar to that of income in the
buying decisions. The kind of occupation a person has the living style happens to be
the same therefore the consumer makes decision of buying the things in the same
manner. For an example a product which may be a need for the entrepreneur can be
considered as a luxury for a service holder person.
  USAGE- every consumer is differentiated on the basis heavy, medium or light user of
product. Here the awareness about the product plays a very decisive role.

TARGETING CONCEPTS, TYPES AND IMPORTANCE

The idea of targeting is related to the breaking the markets into segments so that the marketer
could focus on specific needs and desires of the consumers which very closely match the
product and service offered. Therefore, it is the key to attract new business, increasing sales
and making the business a success. Through the technique of targeting the whole focus is put
on a defined specific group within the market.

FIVE DIFFERENT TYPES OF TARGETING

1. BEHAVIOURAL TARGETING – it is commonly popular as audience targeting. It
is the practice the habits and behaviours of consumers which are kept under target
like- web browsing behaviour, pages visited, searches performed, links clicked and
product purchased.

2. CONTEXTUAL TARGETING- it is related to the placement of products through

the advertisements in the right place. With right place the meaning is to place the
product according the content and context suitable to the product advertised. By
placing the advertisements in any particular magazine or website it is believed that the
consumers of that particular website or the reader of that particular magazine will
definitely use the advertised product too.

3. SEARCH RETARGETING – it is related to the advertising of the products which

are the related products bought by the consumers. As for instance if somebody buys
the dinner set then there is high probability that he would also look for dining mats
and covers, a buyer who will furniture may look for the leather couch. Such
advertisements become successful because they have the power to remain connected
with the intent of consumers.

4. SITE RETARGETING- it is related to the showcasing or display of the product to

the users who visit that shop or website for shopping. This technique of targeting is
different from search targeting in two ways- it is not keyword based, it is targeting the
consumers who are actually aware of the product. This brand recognition makes the
return on investment quite high.

5. PREDICTIVE TARGETING – it is related to all those web browsing data from

behavioural targeting. Artificial learning and machine learning helps to analyse the
data and predict future buying patterns based on previous history. AI and machine
learning helps a lot in affecting the future buying behaviour of the consumer.

IMPORTANCE OF TARGETING
 Targeting in marketing strategy adds a holistic aspect to the market. It impacts the
advertisements, customer experience, branding and business operation. While working on the
targeting once must focus on the below mentioned points:-
1. Speak directly to a defined audience- the messages delivered through marketing
leaves a deep impact on the consumers and helps the consumers to understand the
information more clearly. The message behind the brand, tagline, slogans or any
stories all these help the consumers to create their own understanding about the
product to buy.

2. Attract and convert high-quality leads- it is important for the companies to set up a
direct message for their consumer. When spoken directly to the audience about the
product attracts the targeted buyer very strongly. The message formulated for the
audience is for the specific group and thus succeeds in leading the consumers.

3. Differentiate your brand from competitors – it is very important for the marketers
to frame and convey the message for specific consumers rather to provide it to all.
This helps the brand to stand out from its competitors and stand closely to the loyalty
of their consumers. The moment consumers get aware about the uniqueness of the
brand and the unique strategy of selling they prefer to choose the product. Here the
consumers feels like getting special treatment from the marketer therefore he develops
a strong buying urge which helps the marketer to grow in the business.

4. Build deeper customer loyalty- the strength and strategy of reaching out the
consumers at their personal level actually pioneers the loyalty in the customer. The
approach on more personal and human level establishes a longer-lasting relationships.
The moment consumer feels that the marketer is the safeguard and provider of their
need and demand they tend to buy the product thus developing a deeper consumer
loyalty.

5. Improve product and services- it is very important for the marketers to work
consistently on the improvement and development of the product. To develop this
understanding the marketers need to be the same level of thought process as their
consumers are. Thus, by being at the same with consumers the marketer develops the
better understanding of adding up the improved features in their product.

6. Stay focused- targeting in marketing helps the market to support and enhance their
brand. By staying focused the marketer actually succeeds in making the right
strategies and initiatives in the right direction of their brand. A focused approach
helps to use resources, time and budget properly so that proper success of the brand
could be reached.

There are four generic target marketing strategies:-

1. Undifferentiated Marketing- every customer varies in their characteristics, the
cost of developing separate marketing mix for separate segments sometimes could
not meet the customer needs more exactly. Therefore the company prefers to go
 on with a single marketing mix but then misses out the segmentation. In this
strategy the company essentially adopts a mass-market philosophy. The company
views the market as one single big market. Ford’s Model T is a classical example
of an undifferentiated targeting strategy. Companies marketing commodity
products like Sugar also follow this strategy

2. Differentiated marketing or multi-segment targeting-