Segmentation, Targeting &

Positioning
Segmentation
Segmentation
 Companies cannot connect with all
customers in large, broad or diverse
market.
 They can divide markets into groups of
consumers or segments with distinct
needs and wants.
Segmentation
 The process of dividing the total market
for a good or service into several smaller,
internally similar (or homogeneous)
groups.
 All members in a group have similar
factors that influence their demand for
the particular product.
Bases for Segmentation
 Geographic
 Demographic
 Psychographic
 Behavioural
Geographic Segmentation
 World Region or Country: North
America, Western Europe, European
Union, South Asia
 Region: North, South, East,West
 City: Metro, Class-1, Class- 2 cities,
 Rural, Semi-urban, Urban: Villages,
Towns
 Climate: Northern, Southern,Tropical
Demographic Segmentation
 Age
 Life
 Gender
 Family Size
 Income
 Occupation
 Education
 Socio- Economic Class
Psychographic Segmentation
 Lifestyle: Culture oriented, Sports
Oriented, Outdoor Oriented.
 Personality: Compulsive, Gregarious,
Authoritarian,Ambitious
 Social Class: High, Medium, Lower
Behavioural Segmentation
 Occasions: Regular, Special
 Benefits: Quality, Service, Economy, Speed
 User Status: Nonuser, Ex-user, Potential User,
First time User, Regular user
 Usage Rate: Light, Medium, Heavy
 Loyalty Status: None, Medium, Strong,Absolute
 Readiness Stage: Unaware, Aware, Informed,
Interested, Desirous, Intending to buy
 Attitude towards the Product: Enthusiastic,
Positive, Indifferent, Negative, Hostile
Benefits of segmentation
Segmentation enables marketers to:
 Identify and satisfy specific benefits sought
by particular groups.
 Divide the market into segments by
separating marketing programs.
 Select target market.
 Action the market segmentation plan.
Limitations of Segmentation
Segmentation limits:
 Mass production, which offers economies
of scale.
 Standardisation of service, which
increases delivery speed and efficiency.
Segmentation increases:
 Expense through production and
marketing of products to only specific
groups of the market.
 Promotion, administrative and inventory
costs.
Market Segmentation Process
The process involves:
 Identifying the needs and wants of
customers.
 Identifying the different
characteristics between market
segments.
 Estimating the market potential.
Conditions for effective Segmentation
A segmentation process must meet 3 conditions:
1. The characteristics used to categorise
customers must be MEASURABLE and the
data OBTAINABLE.
2. The segment itself must be ACCESSIBLE
through existing marketing institutions with a
minimum of cost and waste.
3. A segment must be SUBSTANTIAL large
enough to be profitable.
4. DIFFERENTIABLE
5. ACTIONABLE
Determining long term attractiveness
of a Segment
Michael Porter has identified five forces:
 Threat of intense segment rivalry
 Threat of new entrants
 Threat of substitute products
 Threat of buyer’s growing bargaining power
 Threat of supplier’s growing bargaining
power
Targeting
Targeting
 The target market should be compatible
with an organisation’s goals and image.
 The marketing opportunity presented by
the segment must match the company’s
resources.
 The business must generate a profit if it is
to continue its existence.
Targeting
 Full Market Coverage (Undifferentiated):
Ignore market segment opportunities.
 Multiple Segment Specialisation
 Single Segment Concentration
 Niche Marketing
 Individual Marketing (Customization)
Positioning
Positioning
 The place a product occupies in
consumers’ minds relative to competing
products.
Or
 Customers’ image or perception of a
particular brand or company, relative to
their perceptions of others in the same
category.
Positioning

eBay’s positioning: No
matter what “it” is, you
can find “it” on eBay!
Positioning Strategy
 Competitive advantages
 Points of Parity
 Points of Difference => Differentiation

Positioning results from differentiation and

competitive advantages.

Positioning may change over time.

Positioning Strategies
Positioning is assessed:
• In relation to a competitor.
• According to a product class or attribute.
• By price and quality.
Positioning can be in various forms,
although it always incorporates a
statement that identifies, (based on the
marketing mix) how a business wants its
products or services to be perceived
by the consumer.
 Selecting a Position
Factors to consider:
 Competition — look for a gap or niche.
 Customers — seek product attributes.
 Company image — what is the current image?
 Target market — have the needs of the target
market changed? Do we need repositioning?
 The marketing mix — does it support the
selected position?