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Segmentation is the process of classifying customers into groups which share some common characteristic Targeting involves the process of evaluating each segments attractiveness and selecting one or more segments to enter Positioning is arranging for a product to occupy a g g g p py clear, distinctive and desirable place relative to competing products in the mind of the consumer
Steps in Segmentation, Targeting, and Positioning
6. Develop Marketing Mix for Each Target Segment 5. Develop Positioning for Each Target Segment 4. Select Target Segment(s) 3. Develop Selection Criteria 2. Develop Profiles p of Resulting Segments 1. Identify Bases for Segmenting the Market
Market Segmentation An undifferentiated market Different needs in a market But one with many different purchase combinations Segments in a market The Market Segmentation Process Stage 1: Your Market and How it Operates Step 1 .Who Buys Customer profiling Step 3 .Forming Segments Combining similar customers Step 7 .Market Mapping Structure and decision makers Stage 2: Customers and Transactions g Step 2 .What is Bought Purchase options Step 4 .Why it is Bought Customer needs C d Step 6 .Who Buys What Customers and their purchases Stage 3: Segmenting the Market Step 5 .Segment Checklist Reality check 2 .
Limited resources are used to best advantage. targeted at those segments that offer the best potential 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 Tailoring brands/ promotions to local customer groups Individual Marketing Tailoring products/ programs to individual customers 3 . helping it to clarify its own positioning strategy 3. Competitor offerings and marketing positioning must also be analysed in this context so the company must consider what its competitive advantages and disadvantages are.Advantages of Segmentation 1. The process of breaking up a homogeneous market into heterogeneous segments forces the marketer to analyse and consider b th th needs of th market and th company’s id both the d f the k t d the ’ ability to competently serve those needs – thereby making the company better informed about its customers 2.
purchasing power.Criteria for successful Segmentation Measurable Size. Segmenting Consumer Markets Consumer Segmentation Behavioural Psychographic Profile Benefits sought Purchase occasion Purchase behaviour Usage Perceptions and beliefs Lifestyle Personality Demographic Socio-economic Geographic 4 . Segments must respond differently to different marketing mix elements and programs. Segments are large or profitable enough to serve. Substantial Differential Actionable Effective programs can be designed to attract and serve the segments. Accessible Segments can be effectively reached and served. profiles of segments can be measured.
Light. Type of Housing etc Heavy users. Sex. Regular Quality Benefits. Non Users. Non Users. Regular Quality Benefits. Economy Benefits Centralized. medium First-Time users. Occupation Extrovert.B2C Consumer-Base Segmentation Demographic Geographic Usage Rate User Status Benefit Sought Socio Economic Personality/Lifestyle Age. company size etc I d t t i t Country. region etc Heavy users. Economy Benefits Income. R li i etc A S R Religion t Country. county. Race. Light. Introvert B2B Industrial Base Segmentation Demographic Geographic Usage Rate User Status Benefit Sought Purchasing Organisation Industry type. decentralized 5 . medium First-Time users. County.
and How Who Why (benefits sought) 1 2 3 4 5 6 7 8 9 10 Segmentation Structure Selected Market Segment name Who buys Demographic Geographic Psychographic Other What is bought Where When How Why it is bought Price paid Product or service Channel Purchase frequency Payment method Benefits sought 1 2 3 4 5 6 7 8 6 . When.Micro-segments Micro-segment Application (if applicable) What is bought Where.
Prioritising & Selecting Segments Relative company competitiveness High High Low ? KEY Segment Attractiveness Present position Forecast position in 3 years No change Low Process of Market Segmentation and Promotion Mix The disaggregated market The segmented market 1 2 3 1 The target market 2 3 c1 c4 c7 c2 c5 c8 c3 c6 c1 c3 c5 c2 c4 c7 c6 c8 Customers are grouped into segments on the basis of having similar characteristics c1 c5 c2 c7 c6 Promotion mix targeted at segment 3 c3 c4 c8 The characteristics of individual customers are understood Segment 3 is judged to be most attractive and a promotion mix strategy is designed for that target market 7 .
Market Segmentation Strategies Traditional Approaches to Market Segmentation • M M k ti Mass Marketing • Differentiated Marketing – Multi-segment Approach – Market Concentration Approach • Niche Marketing Mass Marketing Strategy 8 .
Multi-segment Strategy Market Concentration Strategy 9 .
Niche Marketing Strategy Target Market A market is a set of all actual and potential buyers A target market is a group of people toward whom a firm markets its goods. or ideas with a strategy designed to satisfy their specific needs and preferences. Any marketing strategy must include a detailed (specific) description of this. services. d i ti f thi 10 .
Target Marketing Strategies Five Fi e basic strategies for target market selection: (1) Single Segment Targeting (2) Selective Targeting (3) Mass Market Targeting (4) Product Specialization (5) Market Specialization Basic Target Marketing Strategies 11 .
preferences and benefits desired (3) Examination of competitors’ characteristics and positioning (4) Comparison of product offerings with competitors (5) Identification of unique position (6) Development of a marketing program (7) Continual reassessment Differentiation and Positioning Differentiation Strategies – Product Descriptors • Product features • Advantages • Benefits – Customer Support Services – Image Positioning Strategies – Strengthen the Current Position – Repositioning – Reposition the Competition 12 .Differentiation and Positioning Relative perception Process of creating favorable relative position: (1) Identification of target market (2) Determination of needs. wants.
50lacs when they have more affordable (cheaper) models. these differences may not be meaningful to customers. A difference is worth establishing when it is: • • • • • • • Important Distinctive Superior Communicable Preemptive Affordable Profitable Potential Problems Under Positioning: buyers have only a vague idea of the brand.Positioning Although from the company’s perspective a product is judged to be different from the competitors’ products. Doubtful P iti i D btf l Positioning: b buyers may find it hard to believe the claims fi d h d t b li th l i (would you buy jewelry at Shopper’s Stop only because Shopper’s Stop was claiming to have the same supplier as Tribhuvandas Bhimji Javeri?) 13 . Thus. a company has to choose a way to distinguish itself (or its products) from competitors. Confused Positioning: confused image about the company/brand as a consequence of making too many claims or frequent repositioning. Over Positioning: Mercedes may make buyers think that they won’t find cars for less than Rs.
for the traveler… • Competitor Positioning: X is better than Y. for the one with a classical taste. for the cold weather. the cleanest. A relieves the pain in ¼ of the time in comparison to B etc… Positioning Strategies BREADTH OF PRODUCTS OFFERED Narrow Product Focused Wide Unfocused (Everything for everyone) Many NUMBER OF MARKETS SERVED Few F Fully Focused (Product and market focused) k f d) Market Focused 14 . • Use/application Positioning: for the summer. X has twice as much meat than Y. at work. make your teeth whiter….. for special occasions. the highest resolution. at night..Types of Positioning • Attribute Positioning: the larger. • User Positioning: for the fun seeker. bedroom wonderful TV image. etc… • Benefit Positioning: the most comfortable bedroom.
Position should be distinctive. Must establish position for firm or product in minds of customers 2. providing one simple. Position must set firm/product apart from competitors 4. consistent message 3.Principles of Positioning Strategy 1. Firm cannot be all things to all people--must focus Market-Positioning Strategies High Price Sony Vaio Laptops Low Quality High Quality Acer Laptops Zenith Laptops Low Price 15 .