Marketing Management (KMBN-105) UNIT-2

Market Segmentation, Targeting and Positioning:

Market segmentation is a process of dividing the entire market population into multiple meaningful
segments based on marketing variables like demographics (age, gender etc), geographic, psychographics
(lifestyle, behaviour) etc. Market segmentation in marketing is identifying a set of homogenous
segments having similar needs, properties & demands which can be used by a company to sell their
product/service more effectively.

Segmentation means to divide the marketplace into parts, or segments, which are definable, accessible,
actionable, and profitable and have a growth potential. In other words, a company would find it
impossible to target the entire market, because of time, cost and effort restrictions. It needs to have a
‘definable’ segment – a mass of people who can be identified and targeted with reasonable effort, cost
and time.

Once such a mass is identified, it has to be checked that this mass can actually be targeted with the
resources at hand, or the segment should be accessible to the company. Beyond this, will the segment
respond to marketing actions by the company (ads, prices, schemes, promos) or, is it actionable by the
company? After this check, even though the product and the target are clear, is it profitable to sell to
them? Is the number and value of the segment going to grow, such that the product also grows in sales
and profits?

Segmentation takes on great significance in today’s cluttered marketplace, with thousands of products,
media proliferation, ad-fatigue and general economic problems around the world markets. Rightly
segmenting the market place can make the difference between successes and shut down for a company.

Segmentation allows a seller to closely tailor his product to the needs, desires, uses and paying ability of
customers. It allows sellers to concentrate on their resources, money, time and effort on a profitable
market, which will grow in numbers, usage and value.

Factors Affecting Market Segmentation:

1. Measurability: Size, purchasing power, and profile of segment.

2. Accessibility: can be reached and served.
3. Substantiality: Large and profitable enough to serve.
4. Differentiability: Respond differently.
5. Actionable: Effective programs can be developed.

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Market Aggregation:

The term ‘market aggregation’ is used to refer to that marketing process in which a
particular product or service is marketed to a large set of audiences or consumers, having the
similar kind of needs and demands thus, giving a heavy brand exposure. Market aggregation is
also known as ‘mass marketing’ or ‘undifferentiated marketing.

Market aggregation is a marketing strategy in which marketing is done to a mass number

of people belonging to the same segment of demographics having similar kinds of needs and
wants.

In this type of marketing, certain standardized products or services are marketed to a large
number of consumers that out there want to purchase that product or service so that they can
satisfy their needs. Hence it is also given the name ‘mass marketing’.

The market aggregations are often referred to as a form of differentiated marketing. This is
because, in such type of marketing process, only a particular segment of customers is targeted
who are having the same kind demands.

But this is also known as the ‘mass marketing’ because although only a certain sector of the
entire demographics is targeted, this segments in itself are quite large and contain a large
number of people hoping to buy the same kind of products or services. Also, the marketers
who are into this market aggregation try to approach to such segments which have a large
number of people so that they can target all of these people and convince them into buying
their products or sales revenue.

Market aggregation Examples”

The process of the market aggregation in itself is a combination of various subsets of the
marketing technique that is being used. One of those subsets of the market aggregation is the
products differentiation. This is quite an essential aspect of the market aggregation which is
used by all the markets to make their products stand out in the market.

To make this possible, marketers use the differentiating technique which helps them prove that
their product is better than those of their rival selling a similar kind of product to the
consumers.

Let us consider an example to understand this. Suppose that there is any company name ABC
that sells towels. Now while selling these towels, what they do is that when the manufacturing
of those towels is going on, the company embroiders the name of their company into all of
those fabrics. This will help the consumers in realizing the brand.

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According to one recent study it was found out that, when the customers can recognize a brand
more than the other, the brand value of that company automatically rises. This way, over a
certain period of time, the consumers start to recognize that particular brand more valuable
than the others.

This way the brand superiority increasing which then, in turn, leads to establishing that
particular company firmly in the competitive market.

Basis for Segmentation:

1. Geographic Segmentation:
Geographic location is one of the simplest methods of segmenting the market. People living in
one region of the country have purchasing and consuming habit which differs from those living
in other regions. For example, life style products sell very well in metro cities, e.g., Mumbai,
Delhi, Kolkata and Chennai but do not sell in small towns. Banking needs of people in rural
areas differ from those of urban areas. Even within a city, a bank branch located in the northern
part of the city may attract more clients than a branch located in eastern part of the city.

2. Demographic Segmentation:
Demographic variables such as age, occupation, education, sex and income are commonly used
for segmenting markets.

(a) Age:
Teenagers, adults, retired.

(b) Sex:
Male and female.

(c) Occupation:
Agriculture, industry, trade, students, service sector, house-holds, institutions.

(i) Industrial sector:

Large, small, tiny.

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(ii) Trade:
Wholesale, retail, exporters.

(iii) Services:
Professionals and non-professionals.

(iv) Institutions:
Educational, religions, clubs.

(v) Agriculture and cottage industries.

(d) Income Level:

Above Rs. 1 lakh per annum, Rs. 50,000 to Rs. 1 lakh, Rs. 25,000 to Rs. 50,000 per annum, i.e.,
higher, middle and lower.

(e) Family Life-cycle:

Young single, young married no children, young married youngest child under six, young
married youngest child over six, older married with children, older married no children under
eighteen, older single, etc.

3. Psychographic Segmentation:
Under this method consumers are classified into market segments on the basis of their
psychological make-up, i.e., personality, attitude and lifestyle. According to attitude towards
life, people may be classified as traditionalists, achievers, etc.

Rogers has identified five groups of consumer personalities according to the way they adopt
new products:
(а) Innovators:
These are cosmopolitan people who are eager to try new ideas. They are highly venturesome
and willing to assume the risk of an occasional bad experience with a new product.

(b) Early Adopters:

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These are influential people with whom the average person checks out an innovation.

(c) Early Majority:

This group tends to deliberate before adopting a new product. Its members are important in
legitimising an innovation but they are seldom leaders.

(d) Late Majority:

This group is cautious and adopts new ideas after an innovation has received public confidence.

(e) Laggards:
These are past-oriented people. They are suspicious of change and innovations. By the time
they adopt a product, it may already have been replaced by a new one. Understanding of
psychographic of consumers enables marketers to better select potential markets and match
the product image with the type of consumer using it. For example, women making heavy use
of bank credit cards are said to lead an active lifestyle and are concerned with their
appearance. They tend to be liberated and are willing to try new things.

Psychographic classification may, however, be an oversimplification of consumer personalities

and purchase behaviour. So many factors influence consumers that an early adopter of one
product might well be a laggard for some other product and vice versa.

4. Behavioristic Segmentation:
In this method consumers are classified into market segments not the basis of their knowledge,
attitude and use of actual products or product attributes.

Any of the following variables might be used for this purpose:

(а) Purchase Occasion:
Buyers may be differentiated on the basis of when they use a product or service. For example,
air travellers might fly for business or vacation. Therefore, one airline might promote itself as a
business flyer while another might target the tourists.

(b) Benefits Sought:

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The major benefit sought in a product is used as the basis of classify consumers. High quality,
low price, good taste, speed, sex appeal are examples of benefits. For example, some air
travellers prefer economy class (low price), while others seek executive class (status and
comfort).

(c) User Status:

Potential buyers may be classified as regular users, occasional users and non-users. Marketers
can develop new products or new uses of old products by targeting one or another of these
groups.

Segmentation of Consumer:

Customer segmentation is the process of separating your customers into groups based on
certain traits they share.

Segmentation offers a simple way of organizing and managing your company’s relationships
with your customers. This process also makes it easy to tailor and personalize your marketing,
service, and sales efforts to the needs of specific groups. This helps boost customer loyalty and
conversions.

Why segment customers?

There are many reasons why customer segmentation is important. Here are some of the things
this process can help your business accomplish:

 Learning about your customers on a deeper level so you can tailor your content to their unique
needs and challenges

 Creating targeted campaigns and ads to resonate with and convert segments of customers

 Improving your customer service and customer support efforts

 Helping internal teams prepare for challenges different groups are likely to experience

 Increasing customer loyalty with customized content and interactions

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 Understanding who your most valuable customers are and why

 Communicating with segments of customers through preferred channels or platforms.

 Meeting specific groups of customers where they are

 Finding new opportunities for products, support, and service efficiently

Targeting:

The selection of potential customers to whom a business wishes to sell products or services.
The targeting strategy involves segmenting the market, choosing which segments of the market
are appropriate, and determining the products that will be offered in each segment. A business
offering multiple products can determine if the various segments should receive one generic
product (such as in mass marketing), or if each segment should receive a customized product
(multi-segment), based upon the market's diversity, maturity, the level of competition and the
volume of sales expected, also called targeting.

Basis for Identifying Target Customers:

It is essential for the organizations or marketers to identify the set of people whom they want
to target? Marketers must understand the needs and expectations of the individuals to create
its target market.

The target audience must have similar needs, interests and expectations. Similar products and
brands should entice the individuals comprising the target market. Same taglines and
advertisements attract the attention of the target audience and prompt them to buy.

To select a target market, it is essential for the organizations to study the following factors:

 Understand the lifestyle of the consumers

 Age group of the individuals
 Income of the consumers
 Spending capacity of the consumers
 Education and Profession of the people
 Gender
 Mentality and thought process of the consumers
 Social Status

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 Kind of environment individuals are exposed to

Always remember you would never be successful if you try to impress everyone. Be specific.
Identify individuals who show similar characteristics. Put them in one group to create target
market within a broad market.

Let us go through the below example:

Why do people use soaps ?

Some would use it against body odour. Some would use it to fight germs and infections
some for a fair and spotless skin. In the above case the product is same but the needs of the
individuals are different. Consumers have different reasons as to why they use soaps.
Target Audience 1

Against body odour - Soaps with a strong and lasting fragrance.

 Marketing professionals
 Sales Representatives
 People exposed to sun for a longer duration
 Individuals travelling by public transport
Target Audience 2

To fight germs and infections - Soaps with medicinal properties

 Individuals working in hospitals, nursing homes and research centres

 Individuals working in unhygienic conditions
Target Audience 3

For a whiter skin - Soaps which improve the skin tone of individuals.

 Teenagers
 College students
Target Audience 4

For a younger looking skin - Soaps which help get rid of wrinkles and fine lines of ageing

 Individuals between age group 30 – 50 years or above

Individuals with identical requirements form the target audience. A 20 year old girl can’t be
targeted along with someone who is 50 years old.

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Target Market Strategies:

There are Four Generic Target Marketing Strategies.

1. Undifferentiated Marketing

There may be no strong differences in customer characteristics. Alternatively, the cost of developing a
separate marketing mix for separate segments may outweigh the potential gains of meeting customer
needs more exactly. Under these circumstances a company will decide to develop a single marketing mix
for the whole market. There is absence of segmentation.

This strategy can occur by default. Companies which lack a marketing orientation may practice this
strategy because of lack of customer knowledge. It is convenient since a single product has to be
developed.

A company using an undifferentiated targeting strategy essentially adopts a mass-market philosophy. It

views the market as one big market with no individual segments. The company uses one marketing mix
for the entire market. The company assumes that individual customers have similar needs that can be
met with a common marketing mix.

The first company in an industry normally uses an undifferentiated targeting strategy. There is no
competition at this stage and the company does not feel the need to tailor marketing mixes to the needs
of market segments.

Since there is no alternate offering, customers have to buy the pioneer’s product. Ford’s Model T is a
classical example of an undifferentiated targeting strategy. Companies marketing commodity products
like sugar also follow this strategy.

Companies following undifferentiated targeting strategies save on production and marketing costs.
Since only one product is produced, the company achieves economies of mass production. Marketing
costs are also lower as only one product has to be promoted and there is a single channel of
distribution.

But undifferentiated targeting strategy is hardly ever a well considered strategy. Companies adopting
this strategy have either been blissfully ignorant about differences among customers or have been
arrogant enough to believe that their product will live up to the expectations of all customers, till
focused competitors invade the market with more appropriate products for different segments.

Therefore companies following this strategy will be susceptible to incursions from competitors who
design their marketing mixes specifically for smaller segments.

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Finding out that customers have diverse needs that can only be met by products with different
characteristics means that managers have to develop new products, design new promotional campaigns
and develop new distribution channels. Moving into new segments means that salespeople have to start
prospecting for new customers.

2. Differentiated marketing or multi-segment targeting

When market segmentation reveals several potential target segments that the company can serve
profitably, specific marketing mixes can be developed to appeal to all or some of the segments. A
differentiated marketing strategy exploits the differences between marketing segments by designing a
specific marketing mix for each segment.

A company following multi-segment targeting strategy serves two or more well- defined segments and
develops a distinct marketing mix for each one of them. Separate brands are developed to serve each of
the segments.

It is the most sought after target market strategy because it has the potential to generate sales volume,
higher profits, larger market share and economies of scale in manufacturing and marketing. But the
strategy involves greater product design, production, and promotion, inventory, marketing research and
management costs.

Another potential cost is cannibalization, which occurs when sales of a new product cut into sales of a
firm’s existing products. Before deciding to use this strategy, a company should compare the benefits
and costs of multi-segment targeting to those of undifferentiated and concentrated targeting.

The car market is most clearly segmented. There are segments for small cars, luxury cars, sports utility
vehicles, etc. Most car makers like General Motors, Ford, Toyota, Honda and others offer cars for all the
segments. Though Toyota entered the US market with small cars, it eventually chose to operate in most
of the segments.

3. Focus or Concentrated Targeting

Several segments may be identified but a company may not serve all of them. Some may be unattractive
or out of line with the company’s business strengths. A company may target just one segment with a
single marketing mix. It understands the needs, and motives of the segment’s customers and designs a
specialized marketing mix.

Companies have discovered that concentrating resources and meeting the needs of a narrowly defined
market segment is more profitable than spreading resources over several different segments. Starbucks
became successful by focusing exclusively on customers who wanted gourmet coffee products.

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The strategy is suited for companies with limited resources as these resources may be too stretched if it
competes in many segments. Focused marketing allows R&D expenditure to be concentrated on
meeting needs of one set of customers and managerial activities are devoted to understanding and
catering to their needs.

Large organizations may not be interested in serving the needs of this one segment or their energies
may be so dissipated across the whole market that they pay insufficient attention to the requirements
of this small segment. One danger that such niche marketers face is attracting competition from larger
organizations in the industry if they are very successful.

Companies following concentrated targeting strategies are obviously putting all their eggs in one basket.
If their chosen segments were to become unprofitable or shrink in size, the companies will be in
problem. Such companies also face problems when they want to move to some other segments,
especially when they have been serving a segment for a long time.

They become so strongly associated with serving a segment with a particular type of product or service,
that the customers of other segments find it very difficult to associate with them. They believe that the
company can serve only that particular segment.

Companies which start with concentrated targeting strategy but nurse ambitions to serve more
segments should make early and periodic forays into other segments.

The idea is to avoid being labelled as the company which exclusively serves a particular segment. The
association with one particular segment should not be allowed to become so strong that customers
cannot imagine the company doing something else.

Mercedes offers premium cars for the upper segment of the market only. It does not offer cars for the
middle and lower segments. But Mercedes segments the premium segment and offers different cars for
its different premium segments.

Some companies are focused in another way. They focus on heavy users—the small percentage of
customers that account for large share of a product’s sale.

The problem with such a strategy is that all the major players would be targeting this segment, and
hence serving this segment will involve high marketing expenditure, price cutting and low profitability. A
more sensible strategy is to target a small, less attractive segment rather than choose the same segment
that every company is after.

4. Customized Marketing

In some markets, the requirements of individual customers are unique and their purchasing power is
sufficient to make designing a separate marketing mix for each customer a viable option. Many service

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providers such as advertising, marketing research firms, architects and solicitors vary their offerings on a
customer to customer basis.

They will discuss face to face with each customer their requirements and tailor their services
accordingly. Customized marketing is also found within organizational markets because of high value of
orders and special needs of customers.

Customized marketing is associated with close relationships between the supplier and customer
because the high value of an order justifies large marketing and sales efforts being focused on each
buyer.

POSITIONING

A marketing strategy that aims to make a brand occupy a distinct position, relative to competing brands,
in the mind of the customer. Companies apply this strategy either by emphasizing the distinguishing
features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image
(inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through advertising. Once
a brand is positioned, it is very difficult to reposition it without destroying its credibility. Also called
product positioning.

POSITIONING STRATEGIES

1. Positioning by product attributes and benefits

It is to associate a product with an attribute, a product feature, or a consumer feature. Sometimes a

product can be positioned in terms of two or more attributes simultaneously. The price/quality attribute
dimension is commonly used for positioning the products.

A common approach is setting the brand apart from competitors on the basis of the specific
characteristics or benefits offered. Sometimes a product may be positioned on more than one product
benefit. Marketers attempt to identify salient attributes (those that are important to consumers and are
the basis for making a purchase decision).

2. Positioning by Price/Quality

Marketers often use price/quality characteristics to position their brands. One way they do it is with ads
that reflect the image of a high-quality brand where cost, while not irrelevant, is considered secondary
to the quality benefits derived from using the brand. Premium brands positioned at the high end of the
market use this approach for positioning the product.

Another way to use price/quality characteristics for positioning is to focus on the quality or value offered
by the brand at a very competitive price. Although price is an important consideration, the product

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quality must be comparable to, or even better than, competing brands for the positioning strategy to be
effective.

3. Positioning By Use or Application

Another way is to communicate a specific image or position for a brand to associate it with a specific use
or application. Surf Excel is positioned as stain remover ‘Surf Excel hai na!’ Also, Clinic All Clear – ‘Dare to
wear black’.

4. Positioning By Product Class

Often the competition for a particular product comes from outside the product class. For example,
airlines know that while they compete with other airlines, trains and buses are also viable alternatives.
Manufacturers of music CDs must compete with the cassette industry. The product is positioned against
others that, while not exactly the same, provide the same class of benefits.

5. Positioning By Product User

Positioning a product by associating it with a particular user or group of users is yet another approach.
Motography Motorola Mobile, in this ad the persona of the user of the product has been positioned.

6. Positioning By Competitor

Competitors may be as important to positioning strategy as a firm’s own product or services. In today’s
market, an effective positioning strategy for a product or brand may focus on specific competitors.

This approach is similar to positioning by product class, although the competition is within the same
product category in this case. Onida was positioned against the giants in the television industry through
this strategy. Onida colour TV was launched with the message that all others were clones and only Onida
was the leader— ‘Neighbour’s envy, owner’s pride’.

7. Positioning By Cultural Symbols

This is an additional positioning strategy wherein the cultural symbols are used to differentiate the
brands. Examples are Humara Bajaj, Tata Tea, and Ronald McDonald. Each of these symbols has
successfully differentiated the product it represents from competitors.

Product Differentiation Strategies:

Differentiation strategy is one of the most important marketing strategy in today’s business
environment. With so many brands and so many varieties of products and so much advertising noise, it
becomes very difficult but ultimately very necessary to differentiate your brand from competition. Thus,

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Differentiation strategy is being used by all top companies for their products. There are various ways to
differentiate your product.

(1) Innovation / Invention

The best way to implement differentiation strategy is to invent or innovate. By innovating or inventing,
you become the market leader because your product is the first entrant in the market. Inventions are of
course difficult and require regular R&D expenditure. But innovations are more practical and are a
Differentiation strategy used by technological companies like Apple and Google.

(2) Product-Level Differentiation

Observed in many industries, Differentiation strategy can be executed at product level too. Taking an
example of the tourism industry, tour packages of all companies are different and the tour package
might have its own differentiating factors. Some might be giving international tours whereas others will
be giving national and regional tours only. Thus, by incorporating product differentiation strategy at
product level, the brands can differentiate themselves from competitors in the eyes of the customer.

(3) Price Differentiation

The most used form of differentiation strategy is price differentiation. In the above example of tour
packages, some brands might give the luxury package whereas other brands might give a cheap and
affordable pricing. Mobile handset companies like Samsung and apple target the cream segment
whereas companies like Micromax and Xolo target the price sensitive segment. Price segmentation is
the biggest Differentiation weapon in the hands of marketers.

(4) Branding

Your promotion mix and the marketing communications of the company play a crucial role in the
differentiation strategy of your product. Companies like Pepsi and Coke rely heavily on their branding
efforts to convert the customer to their products. Thus, youngsters will like pepsi, young adults will like
Thums up, families will like Fanta, and Coke can be an all time favorite for everyone. Your promotion mix
helps you target the correct segment and hence plays a crucial role in differentiation.

(5) Packaging

If you go to any publications and ask them what are the critical factors in selling a book, the publication
agency will say that, after the story of the book, the top cover of the book plays a critical role in the
success of the book. In fact, many a times, customers might buy a book based on the top cover. Thus,
packaging is important. The same can be seen when you enter a mall and you have 100’s of shelves with
different types of cereals, soaps, shampoos, detergents etc. At such a time, the color, the packaging, the
taglines, the ease of handling can play an important role in converting the customer to your brand. The

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tetra pack introduced by Frooti in the Indian market was a wonderful example of Packaging playing a
role in differentiation strategy.

(6) Service Pre Sale and Post sale

Word of mouth marketing is another product differentiator and all brands targeting a niche audience
know the importance of word of mouth marketing. And how does word of mouth marketing happen?
Through very good pre and post sales service. Ever heard a friend say that not only does the restaurant
serve good food, but the service and the ambiance are awesome as well? That is the service I am talking
of. If your service is beyond customers expectation, than that can be a big boost to your differentiation
strategy.

(7) Point of Customer Interaction

There are A, B and C segment customers. You have to ensure that you take care of all kinds of customers
when they interact with your company. For this, you have to take care of point of interactions and
ensure that the customer has a good experience whenever he interacts with the company. In fact, banks
and retail showrooms regularly have audits to ensure that the front end staff is polite and helpful to
customers because this can be a major point for differentiation. A service company, which does not
have good interactions with the customer will always suffer in its profits and operations.

(8) User Convenience

The banking industry shows us an example of how User convenience can help you in your differentiation
strategy. The banks differentiate themselves with the type of net banking services they offer as well as
the number of ATM’s that they have in your vicinity. This is an excellent example of differentiation
through user convenience. If you are taking care of user convenience, the customer will always come
back to you. This is the reason why, even though there are so many big retail outlets in the market, the
smaller shops still run well. This is because they give personalized service to a handful of customers and
the customers find it convenience to shop at the local retail store.

(9) Offer Variety of Products

Another way to implement differentiation strategy is to attack the psychology of the customers. Many a
customer will tell you that they picked a brand just because the brand had more variety in the number
of products it offered. A customer, during prospecting, likes to have more variety so that he finds the
right product and can pick that product for himself. Thus, the more variety of products you offer, the
more chances you have of getting a higher positioning in the mind of the customer and therefore,
differentiating yourself from competition. This is a high investment strategy, because you need to invest
in a product line, but it is useful and profitable in the long run.

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Thus, there are many ways for implementing a differentiation strategy. What the company has to realize
is that it cannot sit back and enjoy the customer’s loyalty today. In this saturated business environment,
each and every company has to take steps to differentiate itself from competition and ensure that it has
a high positioning in the customers mind. An example of this is websites and google. If a website is not in
the top 10 pages of google, than it is likely to be ignored by 50-60% of the searchers on google. Thus, by
improving your website and your content, you can reach the top 10 on google and differentiate your
website from others.

Tasks involved in Positioning:

Positioning of brand, products and services is a continuous game for companies. It is a

reiterative process so that companies can continuous create a positive brand image in the mind
of the customer based on their product offering. The final objective of a good positioning
process strategy is to have a unique, distinct and strong positioning statement. The basic
positioning process steps are as given below:

1. Competition Identification: The first step in the positioning process is understanding the
competition and its products. Every company, brand, product or service has its unique position
in the market. For creating a unique positioning, it is critical to understand the competition
prevalent in the market in that particular sector. Perceptual mapping or brand mapping is often
used for competitor positioning process.

2. Product Characteristics Identification: The second step in the positioning process is to

evaluate all the qualitative characteristics, traits and uses of a product or service. The various
characteristics of a product can be in terms of its usage, sturdiness, benefit, problem-solving,
emotional connect etc.

3. Analyzing Customers: The third step in the positioning process is to understand the needs,
psychology, personality etc of the customer. Unless a company understands a customer, it not
create a proper positioning statement. Customer surveys, feedback forms etc can help
understand the customer better.

4. Comparative Qualitative Analysis: The fourth step in the positioning process is to compare &
analyses the data of competitors, qualitative customer inputs, external factors etc. On
comparison, the gaps in the market can be understood.

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5. Identify Unique Positioning: The fifth step in the positioning process is to identify a unique
problem area or a gap which the product or service is fulfilling. This enables a company to have
a strong and unique positioning vis-à-vis its competition.

6. Execute Marketing Plan: The sixth step in the positioning process is to create a strong
marketing plan which would help in communicating the value proposition offered by the brand.

7. Measure & Evaluate: The last step in the positioning process is to measure, evaluate and
constantly monitor the performance of the positioning of the brand in the mind of the
customer. This is very important as a customer perception might completely differ from the
message which the company is trying to portray. Sometimes, to rebrand or innovate or
improve, companies do a repositioning of its products and services.

Branding:

Branding is a process of creating a unique name and image for a product in the mind of
consumer, mainly through advertising campaigns. A brand is a name, term, symbol, design or
combination of these elements, used to identify a product, a family of products, or all products
of an organization.

Branding is an important component of product planning process and an important and

powerful tool for marketing and selling products.

Types of Brands:

The type of brand used depends on the particular entity using it. The following are some of the
most common forms of brands:

Corporate Brands: Corporate branding is a way for companies to market themselves in order to
give themselves an edge against their competition. They make a series of important decisions in
order to accomplish this, such as pricing, mission, target market, and values.

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Personal Brands: As mentioned above, branding isn't just for companies anymore. People use
tools like social media to build their own personas, thereby boosting their brands. This includes
regular social media posts, sharing images and videos, and conducting meet-and-greets.

Product Brands: This type of branding, which is also known as merchandise branding, involves
marketing one particular product. Branding a product requires market research and choosing
the proper target market.

Service Brands: This kind of branding applies to services, which often requires some creativity,
as you can't actually show services in a physical way.

Brand Equity:

Brand Equity is a qualitative measure of the brand’s positive recognition or goodwill in the
minds of the consumers considering the brand as an independent entity. Brand Equity is the
tangible and intangible worth of a brand. The degree of premium that a brand can charge on its
offering is a direct measure of the equity it possesses with its customers. Brand Equity is kind of
power that the brand has over its competitors or the generic brands and is developed over
time. It represents the overall value of the brand in the market.

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Elements & Components of Brand Equity

Brand equity is a function of several other qualitative parameters which a customer can
associate with a brand.
Some of the main components or elements of brand equity are as follows:
1.Brand Image
The image which is formed in customer's mind. Brand image is the most important parameter
when it comes to creating brand equity.
2.Brand Identity
The image what the company is trying to form. Brand identity is created by the company to try
to form positive brand image but it depends on how customers perceive.
3.Brand Awareness
Awareness is what is the level of awareness about a brand on products and services. Awareness
should be high for good brand equity.
4.Brand Loyalty
How loyal is customer to the brand and will buy the products again even if options are there.
High brand switching can lead to less brand equity.
5.Brand Association
Does the customer associate brand to a positive attributes or not? Sometimes association
something existing like event or celebrity can contribute to brand equity.
6.Customer Perception
What is the overall perception and experience of the customer related to the brand?
Since brand equity gives a qualitative outlook, it is quite complicated to define it through
numbers or a value.

Example of Brand Equity

Some examples of brand equity are as follows. Consumers pay more for a Garnier beauty
product than another local product. A brand can also have negative equity in cases where it
does not fit well with its consumers. As an example, Tata Nano users reported some fire
incidents with the product which led to its negative equity for a while.
Since brand equity is based on several parameters like brand image, brand identity, customer
perception etc., it is primarily a qualitative parameter for a brand or company.

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Brand Positioning:

Brand positioning has been defined by Kotler as “the act of designing the company’s offering
and image to occupy a distinctive place in the mind of the target market”.

In other words, brand positioning describes how a brand is different from its competitors and
where, or how, it sits in customers’ minds. A brand positioning strategy, therefore, involves
creating brand associations in customers’ minds to make them perceive the brand in a specific
way.

How to find a powerful brand positioning (3 simple steps)?

Step 1: In order to create a unique and successful positioning for your brand, you need to
analyze the following:

1. Understand what your consumers want

2. Understand what your company’s and brand capabilities are
3. Understand how each competitor is positioning their brand

Step 2: Once you’ve done that, you will need to choose a positioning statement that:

1. Will resonate with your consumers

2. Can be delivered by your company (capabilities)
3. That is different from your competitors

An easy way to define a brand positioning statement is to summarize it in three words. For
example, “vegan, traditional & feminine”. Try not to choose generic words such as “quality-
products, unique, successful” because this is the aim of every brand.

Step 3: The remaining challenge is to then reflect this brand positioning in everything that you
do (brand personality, packaging design, product, service, visual identity design,
communications, etc).

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