Marketing Management-I

Lecture 5
 Segmenting decisions and profiling consumers

 Targeting strategies

 Positioning products

 Perceptual mapping
Segmentation
•Defining markets
•Dimensions to use
•Identifying segments
•Identifying segments to target
•Segmentation approaches
Positioning
•Understanding customer’s view
•Positioning techniques
•Evaluating segment preferences
•Differentiating the marketing mix
•Relationship between
positioning & targeting
 Customer user
needs

Generic
market Customer types
definition Product
market
definition
Geographic area

Product type
(good and/or service)
 People or organizations with needs or wants
Market and the ability and willingness to buy.

Market A subgroup of people or organizations sharing

one or more characteristics that cause them to
Segment have similar product needs.

Market The process of dividing a market into

meaningful, relatively similar, identifiable
Segmentation segments or groups.
 Market segmentation is the process that
companies use to divide large,
heterogeneous markets into small
markets that can be reached more
efficiently and effectively with products
and services that match their unique
needs
 Homogeneous preferences exist when
consumers want the same things

 Diffused
preferences exist when consumers
want very different things

 Clusteredpreferences reveal natural segments

from groups with shared preferences
Geographic

Demographic

Psychographic

Behavioral
 Geographic segmentation divides the
market into different geographical units such
as nations, regions, states, counties, or cities
 Demographic segmentation divides the
market into groups based on variables such
as age, gender, family size, family life cycle,
income, occupation, education, religion,
race, generation, and nationality
Age and Life Cycle
Life Stage
Gender
Income
Generation
Social Class
 Age and life-cycle stage segmentation is the
process of offering different products or using
different marketing approaches for different
age and life-cycle groups
 Gender segmentation divides the market
based on sex (male or female)
 Income segmentation divides the market into
affluent or low-income consumers
 Psychographic segmentation divides buyers
into different groups based on social class,
lifestyle, or personality traits
Behavioral segmentation divides buyers
into groups based on their knowledge,
attitudes, uses, or responses to a product
 Occasions
 Benefits sought
 User status
 Usage rate
 Loyalty status
Psychographic
Segmentation

Market segmentation on the basis

of personality, motives, lifestyles,
and geodemographics.
 Personality

Motives

Lifestyles

Geodemographics
Personality

Reflects a person’s traits,

attitudes, and habits.

Motives

Marketers might appeal to

emotional, rational, or status
motives, among others.
Decision Roles Behavioral Variables
 Initiator  Occasions
 Influencer  Benefits
 Decider  User Status
 Buyer  Usage Rate
 User  Buyer-Readiness
 Loyalty Status
 Attitude
Demographic characteristics

Decision style

Tolerance for risk

Confidence level

Job responsibilities
 A group of people or
Target
organizations for which an
Market organization designs,
implements, and maintains a
marketing mix intended to
meet the needs of that group,
resulting in mutually satisfying
exchanges.
 Segment size and growth

 Segment structural attractiveness

 Company objectives and resources

Undifferentiated Concentrated Multisegment
Strategy Strategy Strategy
Differentiated marketing – Colgate targets
different market segments with different
types of toothpaste.
 One-to-One
Has a Goal of…
Marketing is...

Individualized Cost Reduction

Information-Intensive Customer Retention

Long-Term Increased Revenue

Personalized Customer Loyalty

Positioning is…
developing a specific marketing
mix to influence potential
customers’ overall perception or
a brand, product line, or
organization in general.
Product position is the way the
product is defined by consumers on
important attributes—the place the
product occupies in consumers’
minds relative to competing
products
 Perceptions
 Impressions
 Feelings
Choosing a Differentiation and Positioning
Strategy
• Identifying a set of possible competitive
advantages to build a position
• Choosing the right competitive advantages
• Selecting an overall positioning strategy
Competitive advantage is the advantage over competitors
gained by offering greater value either through lower prices
or by providing more benefits that justify higher prices
1. Assess the positions occupied by
competing products

2. Determine the dimensions underlying

these positions

3. Choose a market position where

marketing efforts will have the
greatest impact
Choosing a Differentiation and
Positioning Strategy
Step 1: Identifying a set of possible competitive
advantages to build a position by providing
superior value from:
• Product differentiation on features, performance,
style or design
• Service differentiation through speedy,
convenient, or careful delivery
• Channels - coverage, expertise, and performance
• People – hiring and training better people
• Image – company or brand image
 Differentiation and Positioning
Step 2: Choosing the Right Competitive
Advantages
• A difference is worth establishing to the extent
that it satisfies the following criteria:
• Important – delivers a highly valued benefit to
target buyers
• Distinctive – offers in a more distinctive way
• Superior – superior to other ways
• Communicable – visible to buyers
• Preemptive – cannot easily be copied
• Affordable – buyers can pay for the difference
• Profitable
Step 3: Selecting an Overall Strategy
• Value proposition is the full mix of
benefits upon which a brand is
positioned.
• More for more
• More for the same
• Same for less
• Less for much less
• More for less
Possible value
propositions
 Attribute
Price and Quality
Use or Application
Product User

Product Class
Competitor
Emotion
 Important
 Distinctive
 Superior
 Communicable
 Preemptive
 Affordable
 Profitable
1. Determine consumers’ perceptions
and evaluations in relation to
competitors’.
2. Identify competitors’ positions

3. Determine consumer preferences.

4. Select the position.

5. Monitor the positioning strategy.

Perceptual Mapping is…
a means of displaying or graphing,
in two or more dimensions, the
location of products, brands, or
groups of products in customers’
minds.