SEGMENTATION TARGETING & POSITIONING 1

Prof.Smeeta.K KLE CBA, Hubballi

STP

Prof.Smeeta.K KLE CBA, Hubballi 2

 Market Segmentation:
 Dividing a market into distinct groups with distinct
needs, characteristics, or behavior who might require
separate products or marketing mixes.

Prof.Smeeta.K KLE CBA, Hubballi 3

 What is Mass Marketing?
 In mass marketing, the seller engages in the mass
production, mass distribution, and mass promotion
of one product for all buyers.
 Ex: Henry Ford epitomized this strategy when he
offered the Model-T Ford in one color, black, Coca-
Cola also practiced mass marketing when it sold
only one kind of Coke in a 6.5-ounce bottle

Prof.Smeeta.K KLE CBA, Hubballi 4

Levels of Market Segmentation

 Segment Marketing
 Niche Marketing
 Local Marketing
 Individual customer
Marketing

Prof.Smeeta.K KLE CBA, Hubballi 5

 Segment Marketing
 Segmentation is essentially the identification of
subsets of buyers within a market that share
similar needs and demonstrate similar buyer
behaviour.
 The world is made up of billions of buyers with
their own sets of needs and behaviour.
 Segmentation aims to match groups of purchasers
with the same set of needs and buyer behaviour.
Such a group is known as a 'segment'.

Prof.Smeeta.K KLE CBA, Hubballi 6

Prof.Smeeta.K KLE CBA, Hubballi 7
 Niche Marketing
 A niche is a more narrowly defined customer group
seeking a distinctive mix of benefits
 Marketers usually identify niches by dividing a
segment into sub segments.
 Concentrating all marketing efforts on a
small but specific and well defined segment
of the population.

Prof.Smeeta.K KLE CBA, Hubballi 8

 What does an attractive niche
look like?
 The customers have a distinct set of needs; they
will pay a premium to the firm that best satisfies
them; the niche is fairly small but has size,
profit, and growth potential and is unlikely to
attract many other competitors; and the nicher
gains certain economies through specialization

Prof.Smeeta.K KLE CBA, Hubballi 9

 Local Marketing
 Target marketing is leading to marketing programs
tailored to the needs and wants of local customer
groups in trading areas, neighborhoods, even
individual stores.
 Local marketing reflects a growing trend called
grassroots marketing. Marketing activities
concentrate on getting as close and personally
relevant to individual customers as possible

Prof.Smeeta.K KLE CBA, Hubballi 10

 Individual customer Marketing
 The ultimate level of segmentation leads to "segments of
one," "customized marketing," or "one-to-one marketing.“

Prof.Smeeta.K KLE CBA, Hubballi 11

Types of segmentation

Prof.Smeeta.K KLE CBA, Hubballi 12

 Geographic
 Dividing a market into different geographical units
such as nations, states, regions, countries, cities,
etc..
 Region- Pacific, Mountain, Atlantic, Asia, South
Africa, Etc
 City or Metro
 Density- Urban, Sub-urban and Rural
 Climate- Northern ,Southern

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Prof.Smeeta.K KLE CBA, Hubballi 14
 Demographic Segmentation
 Dividing the market into groups based on
demographic variables such as age, gender, family
size, income, occupation, education, religion, race,
and nationality.
 Age: Based on age on can have the 1) Infants 2) Child
Market Teen Market 3) Youth Market 4) Middle Aged Market
5)Elders Market
 Genders: On the basis of gender, the consumer market
may be classified into male market female market.
 Social Class: Companion design their products and
services for particular social classes. There are three social
classes: 1 Upper classes 2. Middle classes 3. Lower class
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Prof.Smeeta.K KLE CBA, Hubballi 16
 Behavioral Segmentation
 The customer can also be divided into certain segments on the basis of
their knowledge, attitude, use, or response to a product.
 Occasions : (Marriages, festival occasasions)

 Benefits sought : (Colgate- White teeth stops bad breath, Vicco

vajradanthi and neem gives ayurvedic benefit)

 User Status: (Ex-users, first users, regular users, Potential users)

 Usage rate: (Light, Medium, and heavy user segments)

 Loyality status: (Hard core loyals, Split Loyals(Two r Three brands),

Shifting Loyals (Shift from one brand to another), Switchers (No loyalty
to any brand))

Prof.Smeeta.K KLE CBA, Hubballi 17

 Psychographic Segmentation
 Psychographic Segmentation groups customers according to
their life-style and buying psychology.
 Many businesses offer products based on the attitudes,
beliefs and emotions of their target market The desire
for status, enhanced appearance and more money are
examples of psychographic variables.
 In psychographic segmentation, elements like life style,
attitude, self-concept and value system, form the
base. A person’s pattern of interests, opinions, and
activities combine to represent his or her lifestyle.

Prof.Smeeta.K KLE CBA, Hubballi 18

Segmenting Consumer Markets

Prof.Smeeta.K KLE CBA, Hubballi 19

 Using Multiple Segmentation
Bases
 Marketers rarely limit their segmentation analysis
to only one or few variables. Rather, they are
increasingly using multiple segmentation bases in
an effort to identify smaller, better defined target
groups.
 Ex: Banks

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Process of market segmentation

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 Types of Market
 Consumer Market (B TO C)
 Industrial Market (B to B)

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Prof.Smeeta.K KLE CBA, Hubballi 23
 Segmenting Business Markets
 Demographic
 Industry: Which industries should we serve?
 Company size: What size companies should we serve?
 Location: What geographical location should we serve?

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 Segmenting Business Markets
 Operating Variables
 Technology: What customer technologies should we
focus on?
 User or nonuser status: Should we serve heavy users,
medium users, light users, or nonusers?
 Customer capabilities: Should we serve customers
needing many or few services?

Prof.Smeeta.K KLE CBA, Hubballi 25

 Segmenting Business Markets
 Purchasing Approaches
 Purchasing-function organization: Should we serve companies with
highly centralized or decentralized purchasing organizations?
 Power structure: Should we serve companies that are engineering
dominated, financially dominated, and so on?
 Nature of existing relationships: Should we serve companies with
which we have strong relationships or simply go after the most
desirable companies?
 General purchase policies: should we serve companies that? Service
contacts? Systems purchases? Sealed bidding?
 Purchasing criteria: should we serve companies that are seeking
quality? Service? Price?

Prof.Smeeta.K KLE CBA, Hubballi 26

 Segmenting Business Markets
 Situational Factors
 Urgency: Should we serve companies that need quick
sudden delivery or service?
 Specific application: Should we focus on certain
applications of our product rather than all applications?
 Size of order: Should we focus on large or small orders?

Prof.Smeeta.K KLE CBA, Hubballi 27

 Segmenting Business Markets
 Personal Characteristics
 Buyer-seller similarity: should we serve companies
whose people and values are similar to ours?
 Attitudes toward risk: Should we serve risk-taking or
risk-avoiding customers?
 Loyalty: Should we serve companies that shoe high
loyalty to their suppliers?

Prof.Smeeta.K KLE CBA, Hubballi 28

 Requirements of Effective
segmentation
 Measurable
 Accessible
 Substantial
 Differentiable
 Actionable

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 Target Marketing
 The process of evaluating each market segment’s
attractiveness & selecting one or more segments to
enter.
 Consists of a set of buyers who share common needs or
characteristics that the company decides to serve

Prof.Smeeta.K KLE CBA, Hubballi 30

 Evaluating Marketing Segments
 Involvement of 3 factors
 Segment size and growth
 Segment structural attractiveness
 Company objectives and resources

Prof.Smeeta.K KLE CBA, Hubballi 31

 Selecting Target Market
Segments
 Defining Target Market 
 Levels of Target Marketing
 Undifferentiated Marketing (very broadly)
 Differentiated Marketing (somewhere in between)
 Concentrated Marketing
 Micromarketing (very narrowly)

Prof.Smeeta.K KLE CBA, Hubballi 32

 Undifferentiated Marketing
 A market-coverage strategy in which a firm decides
to ignore market segment differences & go after
the whole market with one offer.

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 Differentiated Marketing
 A market-coverage strategy in which a firm decides
to target several market segments and designs
separate offers for each.

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 Concentrated Marketing
 A market coverage strategy in which a firm goes
after a large share of one or a few segments or
niches.
 Normally used when company resources are
limited
 Company gains a better understanding of the
niches it caters & special reputation may be gained.

Prof.Smeeta.K KLE CBA, Hubballi 35

 Micro Marketing
 The practice of tailoring products and marketing
programs to the needs of specific individuals and
local customer groups.
 Rather then seeing a customer in every individual,
micro-marketers see INDVIDUALS in every
customer
 Local Marketing
 Individual Marketing

Prof.Smeeta.K KLE CBA, Hubballi 36

 Choosing a Target- Marketing
Strategy
 requires consideration of :
 Company resources
 The degree of product variability
 Products life-cycle stage
 Market variability
 Competitors’ marketing strategies

Prof.Smeeta.K KLE CBA, Hubballi 37

 Target Marketing
Socially Responsible Targeting
 Some segments, especially children, are at special
risk
 Many potential abuses on the Internet, including
fraud Internet shoppers
 Controversy occurs when the methods used are
questionable

Prof.Smeeta.K KLE CBA, Hubballi 38

Positioning for
Competitive
Advantage

Prof.Smeeta.K KLE CBA, Hubballi 39

 Positioning
 The way the product is defined by consumers on important
attributes ---- The place the product occupies in consumers’
minds relative to competing products.
 Positioning is the act of designing the company's
offering and image to occupy a distinctive place in
the minds of the target market.
 Typically defined by consumers on the basis of important
attributes.
 Involves implanting the brand’s unique benefits and
differentiation in the customer’s mind.
 Positioning maps that plot perceptions of brands are
commonly used.
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 Product Position
 The way the product is defined by consumers on
important attributes-the place the product
occupies in consumers’ minds relative to competing
products.

Prof.Smeeta.K KLE CBA, Hubballi 41

Choosing the right Competitive
advantage/ Positioning Strategy

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Prof.Smeeta.K KLE CBA, Hubballi 43
 Choosing the Right Competitive
Advantages
 How many differences to promote?

 Unique Selling Proposition (USP) USP is to

promote only one benefit to the target market for
each brand and stick to it.
 e.g. Crest Toothpaste (Anti cavity Protection) Wall-
Mart (Always Low Prices)

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 Positioning Errors to Avoid
 Under positioning:-Buyers have only a vague idea
of the brand.
 Over Positioning:-Buyers may have too narrow an
image of the brand.
 Confused Positioning:- Leaving buyers with a
confused image of a company.
 Doubtful Positioning: Claiming a benefit that
customers will doubt that the brand can actually
deliver.

Prof.Smeeta.K KLE CBA, Hubballi 45

 Major Value Propositions
 More for more
 More for the same
 The same for less
 Less for much less
 More for less

Prof.Smeeta.K KLE CBA, Hubballi 46

 Major Value Propositions
 More for More Proposition:
 Providing the most upscale product or service and
charging a higher price to cover the higher costs.
 e.g. Mercedes-Benz auto mobiles, Rolex watches

More for The Same Proposition

Providing a brand offering comparable or even better
quality to that of competitor/s’ upscale one but at a
Lower or The Same Price.
e.g. Toyota lexus, MARUTI SUZUKI, MOBILES

Prof.Smeeta.K KLE CBA, Hubballi 47

 Major Value Propositions
 The Same for Less Proposition:
 Providing equivalent quality products at a Lower Price. It
can be a powerful value proposition.
 e.g. Wall-Mart, BIG BAZAR

 Less for Much Less Proposition

 Providing lower performance or quality products as
required by the consumers at a Much Lower Price.

Prof.Smeeta.K KLE CBA, Hubballi 48

 More for Less Proposition
 Providing even better or the best products or
services compared to the competitor/s at Lower or
the Lowest Prices.
 e.g. Dell Computers, Procter & Gamble

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Prof.Smeeta.K KLE CBA, Hubballi 50
Prof.Smeeta.K KLE CBA, Hubballi 51
 Developing a Positioning
Statement
 Developing a Positioning Statement A Positioning
Statement summarizes company or brand
positioning by targeting the segment, developing a
need, delivering the brand name and its concept,
and pointing out the competitive advantage or
difference.

Prof.Smeeta.K KLE CBA, Hubballi 52

 Communicating and Delivering
the Chosen Position
 Communicating and Delivering the Chosen Position
Keeping a permanent channel to Communicate the
desired position to target consumers and taking
actions in order to deliver the position the company
wants to build relative to competing products.

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