Revised - Marketing Management (Chapter 8) - STP

MARKETING MANAGEMENT
14th edition
8
Identifying Market
Segments, Market Targeting,
& Market Positioning
Hamidul Islam [Hamid]

Senior Assistant Professor, Department of Marketing
Faculty of Business Administration, AIUB
Steps in Market Segmentation,
Targeting, and Positioning
8-2
 Dividing a whole market into different
smaller groups of buyers with distinct needs,
characteristics or behaviours who might
require separate products or marketing mixes.
 The company identifies different ways to
segment the market and develop profiles of
the resulting market segments.
8-3
 Evaluating each market segment’s

attractiveness and selecting one or
more of the market segments to
enter.
8-4
 Setting the competitive positioning for the product and
creating a detailed marketing mix.
 Use of 4p’s in a way that create better value for the
customers and create an unique identity for the company.
8-5
Levels of Market Segmentation
The starting point for discussing
segmentation is Mass Marketing (Opposite
concept of segmentation).
In Mass Marketing, the seller

engages in the mass production,
standard price, mass distribution
and mass promotion for one
product for all the buyers.
8-6
Levels of Market Segmentation
The levels of market

segmentations are –
1. Segment Marketing
2. Niche Marketing
3. Local Marketing &
4. Individual Marketing
8-7
Levels of Market Segmentations
Segment Marketing
Targeting a different groups of customers
[from available alternative groups] who
share a similar set of needs and wants as
opposed MASS MARKETING.
MARKETING
The company can often better

design, price, disclose and
deliver the product or service to
the selected group and also can
fine tune the marketing program
and activities to better reflect
competitors’ marketing.
8-8
Niche Marketing:
A niche is a more narrowly defined specific
group seeking a distinctive/special mix of
benefits.
Marketers usually identify niches by
dividing a segment into sub-segments.
To attract the customers; marketers
can go for either differentiation or cost
leadership.
E.g., Archies, Hallmark- Cards with special
message, Nike- Sports wear, Nokia phones-
Bengali Versions for less educated people,
Aarong’s maternity wears.
8-9
Niche Marketing
8-10
Local Marketing:
Marketing programs tailored to the
needs and wants of local
[regional] customer groups.
E.g., Local Newspapers, Global bank’s local
operations, Movies dubbed in local
languages.
8-11
Individual Marketing
(Customerization):
The ultimate level of segmentation.
Segments of one, customized
marketing, one-to-one marketing
etc.
E.g., Special cars, Tailors, Lifestyle products,
Beauty saloon, Interior design, Event
management firms.
8-12
Individual
Marketing
8-13
Bases for Market Segmentation…
Segmenting Consumer Markets
8-14
Geographic Segmentation is dividing the market
into geographical units like nations, states,
regions, countries, cities, neighborhoods, etc.
SELECTED SEGMENTATION VARIABLES
Geographic Regions South, West, North, East, North-east, Hill Tracks, etc.
Nations/Nationality American, European, Indian, Bangladeshi, etc.
City or Metro Size Major Metropolitan Areas, Small Towns, Cities, Villages
Population Density Urban, Suburban, Ex-urban, Rural
Climate Temperate, Hot, Humid, Rainy
- The company can operate in one or few areas or it can operate
in all but pay attention to local variations.
- Geographical markets also vary in their product preferences
and requirements. 8-15
Geographic Segmentation
• Geographic Regions
• Nations/Nationality
• City or Metro size
8-16
• Population Density
• Climate Situation
8-17
Regions based
Products
8-18
Climate Situations based Products
Nationality
based
Products
8-19
Demographic Segmentation is the most popular
segmentation method because consumer
needs, wants, and usage often closely
associated with demographic variables and are
easier to measure than other types of variables.
- The marketers divide the market on variables such
as age, family size, family life cycle, gender,
income, occupation, education, religion, race,
generation, nationality and social class.
8-20
Demographic Segmentation
Age Under 5 yrs, 5-12, 13-19, 20-34, 35-49, 50-60, 60+ years
Gender Male, Female
Family Life Cycle Bachelorhood, honeymooners, parenthood, post-parenthood
and old age
Family Size Nuclear Family (2-5 members), Joint Family (5-10/10+ members)
Income Less than Tk. 10,000, Tk 10,000- Tk. 25,000, Tk. 25,000-
Tk. 50,000, Tk. 50,000- Tk. 75,000, Tk. 100,000 and over
Education Illiterate, High School Pass, SSC/ HSC, graduate, post-graduate
Occupation Unskilled workers, skilled workers, Blue Collar, White Collar,
Professionals (Doctors, Teachers, Engineers, etc.)
Religion Muslims, Hindus, Christians & Buddhists
Racial Group Tribal Groups such as Chakma, Marma, Garo, etc.
8-21
Age Groups
based Products
AGE
GROUPS
8-22
Gender
based
Products
8-23
Family
Life Cycle
Flow chart
8-24
Family Life Cycle

based
Products
8-25
Family Sizes
Based Products
8-26
Education levels
based Products
8-27
Income Based Products
8-28
Occupations Based Products
8-29
Religions based Products
8-30
Racial Celebrations
Based Products
8-31
Psychographic Segmentation is dividing the buyers into
different groups based on psychological/personality traits,
lifestyle or Social class (values).
- People within the same demographic group can exhibit very
different psychographic profiles.
Lifestyle Culture-oriented, sports-oriented, outdoor-oriented
Personality Compulsive (Habitual),
Gregarious (Outgoing, Social),
Authoritarian (Strict, Rigid),
Ambitious (Determined,
Striving)
8-32
Psychographic Segmentation
Personality
&
Lifestyle
based
Products
8-33
Psychographic Segmentation
Personality/ Choice based Products
8-34
Behavioral Segmentation is dividing the buyers
into groups on the basis of their knowledge of, attitude
toward, use of or response to a product.

Occasions Regular, Special, National
Benefits Quality, Service, Economy, Speed
User Status Non-user, Ex-user, Potential user, First-time user, Regular user
Usage Rate Light, Medium & Heavy usage rate
Loyalty Status Hard-core Loyal, Split Loyal, Shift Loyal & Switchers
Readiness Stage Unaware, Aware, Informed, Interested, Intending to buy
8-35
Behavioral Segmentation
Occasions Segmentation divides buyers into groups
according to occasions when they get the idea to buy,
actually make purchases, or respond to a product.
- E.g. Before cultural, social or religious occasions consumer
purchase more dress, gift items and home appliances. So
company can target these occasions.
8-36
Occasions Based Product Advertisements
8-37
Benefits Segmentation requires finding the major
benefits people look for in the product class. Buyers can
be classified according to the benefits they seek.
- E.g. Mobile phone companies identified several different
customer segment. Each segment seeks a unique
combination of benefits, like Voice call, Music systems,
Internet facilities and other Entertainments.
8-38
Benefits based Segmentation
8-39
User Status Segmentation divides buyers into ex-
users, potential users, first-time users, and
regular users of a product.
- Company can use different types of marketing strategies to
convince these various groups.
8-40
User status based product offerings
8-41
Usage Rate Segmentation divides buyers into light,
medium, and heavy product users.
- Heavy users are often a small percentage of the market
but account for a high percentage of total consumption.
8-42
Usage rate based product offerings Behavioral Segmentation
8-43
Buyer- Readiness Stage
A market consists of people in different stages of readiness
to buy a product.
 Some are Unaware of the product
 Some are Aware
 Some are Informed and Interested about the product
 Some Desire the product and intend to Buy.
8-44
Behavioral Segmentation Buyer- Readiness Stage
based Advertisements
Advertisement For
the Unaware Group
Advertisement for the Aware Group 8-45
Advertisement
for the unaware
group
Advertisement
for the aware
group
8-46
Loyalty Status
A market can be segmented by consumers’ loyalty level.
Consumers can be loyal to brands (Coke/ Pepsi), stores
(Agora/ Nandan), companies (Unilever/ Square Toiletries),
restaurants (KFC/ BFC), hospitals (United/ Apollo) etc.
- Buyers can be divided into four groups according to brand
loyalty status:
 Hard-core Loyals
 Split Loyals
 Shifting Loyals
 Switchers
8-47
 Hard-core Loyals – Consumers who buy only one brand
all the time for different types of products under a particular
category. They are the people who never changes the
brand at any cost. Extremely brand loyal consumers.
8-48
 Split Loyals – Consumers who are loyal to different brands
for different types of products under a particular category.
These consumers split their choice for different types of
products & brands; though a single brand has different types
of products.
8-49
 Shifting Loyals – Consumers who shift loyalty from one
brand to another (within the selective brands) for a single
type of product. Sometimes the post purchase experience
can force the consumer to shift the brand.
8-50
 Switchers – Consumers who show no respect to any
single brand. They can change the brand any time.
These consumers are frequent switchers, and they are
not brand loyal at all.
Flame Box, and Salmon brands by

Abul Khair Match Factory Ltd
VAROSHA brand by
Varosha Match
Industries Ltd.
Fire Box, Dolphin, and Fighter brands
by Akij Match Factory Ltd. 8-51
END of CHAPTER - 8

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MARKETING MANAGEMENT

Hamidul Islam [Hamid]

 Evaluating each market segment’s

In Mass Marketing, the seller

The levels of market

The company can often better

Family Life Cycle

Religions based Products

SELECTED SEGMENTATION VARIABLES

Occasions Based Product Advertisements

Benefits based Segmentation

Flame Box, and Salmon brands by

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