8

Identifying
Market Segments
and Targets

Marketing Management
A South Asian Perspective, 13th ed
• Target marketing includes three activities:
market segmentation, market targeting, and
market positioning.
 What is a Market Segment?
A market segment consists of a group of
customers who share a similar set of
needs and wants.
 Why Segmentation is Necessary

• Consumer needs differs

• Differentiation helps
products compete
• Segmentation helps
identify media
• Makes the Marketing
Effort More Efficient
and Economic

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Segmentation Bases
Demographic Segmentation -

Age segmentation includes segments such as the baby

boomers and generations X and Y. Eg. Pepsi for gen Y.
Family life-cycle is based on the premise that many families
pass through similar phases in their lives and share major
life events such as marriage, birth of a child, and retirement.
Eg Johnson baby soaps for child , retirement plans, pogo for
kids ,shadi.com for unmarried
Gender- Dove for women, AXE for male
Income, education, and occupation tend to tie together and
lead to segmentation based on social class.Eg Nano for low
income people, trade india .com for businessman, HUL
washing powder on the basis of income
 Geographic Segmentation

• Based on geography – density of area

( urban ,rural),region ( UP, Raj,Delhi) etc
• People who live close to one another are
similar
• “Birds of a feather flock together”
• Eg Mitti cool – segment is rural,
• Eg Pharma cos. segment market on the basis of
region also.
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 Psychographic
In this elements like lifestyle, attitude, personality
form the base for segmentation
•Lifestyle Includes activities, interests, and opinions
•Attitude - +VE AND –VE
•Personality- extrovert ,introvert, aggressive,
innovator,
•Eg Café coffee day – segment is youth as they can
come and hang out
•Titan – sonata for value for money, fastrack for youth,
nebule for premium class.
•Nazar suraksha kavach for –ve attitude people.
•Samsumg S4 for innovators
•Maggi for time constrained individual
•Femina for modern thinking women
 Socio-Cultural

• In this Segmentation is done on the basis of

culture ( Indian , american), Religion , Social
class ( lower class, middle class, upper class)
• Eg Pvt Banking for upper classes
• Aastha channel for Hindus
Behavioural segmentation
• Usage rate- Usage rate is often based on whether a group of consumers are
heavy, medium, light, or nonusers of a product
• Eg. mobile operator
• Usage-situation segmentation
– Segmenting on the basis of special occasions or situations
– Example :
– chocolate and flowers for Valentine’s Day
– Archies card for various occasion
• Benefits sought – segmentation on the basis
of benefits sought like convenience,value for
money,long lasting etc
• Eg Amaron for long life benefit
• Cinthol for escape from body odour
• Maruti for value for money
 Loyalty status
• Customer loyalty is also used a basis for segmenting
the market and evolving a marketing strategy for each
segment.
• Based on loyalty status groups can be divided into-
• a) Hard core loyals- those who buy a brand all time
• b) Split loyals- those who are loyal two 2-3 brands
• c) Shifting loyals- those who shift loyalty from one
brand to another
• d) Switchers – those who are not loyal to any brand
• Eg in industries like banking, hospitality ,airlines
segmentation is done on this basis .
Effective Segmentation Criteria
Measurable-
Measurable- size
size ,purchasing
,purchasing power
power and and
other
other characteristics
characteristics can
can be
be measured
measured
Substantial-
Substantial- segment
segment should
should be be large
large
and
and profitable
profitable
Accessible-segment
Accessible-segment can can be be
reached
reached & & served
served
Differentiable-segments
Differentiable-segments
should
should respond
respond differently
differently to to
marketing
marketing mix
mix
Actionable-
Actionable- effective
effective
prog
prog can
can be
be framed
framed for for
serving
serving itit
 Targetting

• Targeting is the second stage of the (STP)

process. After the market has been separated
into its segments, the marketer will select a
segment or series of segments and 'target'
it/them. Resources and effort will be targeted at
the segment
• To target a segment a firm looks at its
attractiveness ( size,growth,profitability) and the
objective and resources of company .
 Targeting strategies

• Standardisation- firm offers same product to different

markets.It is also called mass marketing .The objective is to
achieve economies of scale.
• Eg- Coke and pepsi
• Differentiation- firm differentiates its product to suit different
segments.Eg Airlines- 1st class,business class and economy
• Focus- firm targets only a specific group .Also called as niche
when higher income group are targetted only .Eg BMW
 Target Market Selection
A)Single-segment concentration
•Through concentrated marketing, the firm gains a strong knowledge of the
segment’s needs and achieves a strong market presence.
•However, there are risks, a market segment can turn sour, or a competitor
may invade the segment.
•For these reasons, many companies prefer to operate in more than one
segment
•cancer hospital targeting cancer patients,mahindra
tractors for farmers
 Target Market Selection

B)Selective specialization
•The firm selects a number of
segments, each attractive.
•This multi-segment strategy
has the advantage of
diversifying the firm’s risks
•horlicks initially for kids above
3 but now also for 2 yrs
Bajaj initially scooters for
businessman etc but now bikes
for various segments
C)Product specialization
•1) The firm makes a certain product that it sells to several
different market segments. Eg microscope to schools
,colleges,univ,labs etc desktop to individual male,female,schools
D) Market Specialization
•1) The firm concentrates on serving many needs of a
particular customer group. Eg for sports loving people
shoes,track suits and other sports gear
 Patterns of
Target Market Selection
E)Full market coverage
•The firm attempts to serve all
customer groups with all the
products they might need.
•In undifferentiated marketing,
the firm ignores segment
differences and goes after the
whole market with one offer.
Window XP,WINDOWS 7
 What is Positioning?

Positioning is the act of designing the

company’s offering and image to occupy a
distinctive place in the mind of the target
market.
 Defining Associations
Points-of-difference Points-of-parity
(PODs) (POPs)
• Attributes or benefits • Associations that
consumers strongly are not
associate with a brand, necessarily
positively evaluate, and unique to the
believe they could not brand but may be
find to the same extent shared with other
with a competitive brand brands
Differentiation Strategies

Product Personnel

Channel Image
 Product Differentiation
• Product form- size,shape
• Features- added features along with basic product- zen
estillo vxi with airbags
• Customization- DELL,Levis
• Performance-low,high,avg- Honda high performance engine
• Conformance- degree to which all products are identical-if
all LED tv are identical in quality output then they have high
conformation
• Durability- product’s life. Nokia durable
• Reliability-probability that product will not malfunction at a
cetain time period.Maruti
• Style- Harley davidson
Design Differentiation
 Channel differentiation

• Eureka forbes – direct marketing

• Amway- multilevel mkting
• Lakme- 3 distict channels
• Neighbourhood shops for skin products like moisturiser,sun
screen lotions
• Bigger shops in central places for complete range of personal
care products
• Exclusive Hul lakme saloons for elite customers carrying
premium cosmetics etc
Personnel Differentiation:
Singapore Airlines
Image Differentiation-

SX4- Sturdy image

 Bases for positioning
1) Positioning by Product feature/Consumer Benefits
This is commonly used strategy and consists in associating an
object with a product feature or customer benefit.
• “Colgate is a cavity fighter.” or colgate with salt
moov- remove backache
gillette- one drop for smooth shave
Sometimes, a new product can be positioned with respect to
product characteristics that competitors have ignored.
• “The toothpaste with clove oil.”
2)positioning by competitor-This type of positioning strategy consists in
making consumers think that your brand is better than, or as good as the
competitors. The competition is used as the point of reference. This
positioning strategy can be used to advantage in certain cases.
••First, when the competitor has an established image that has been built up
over the years, this image can be used as “bridge” to communicate another
image. For example, if someone wants to know where a particular office is, it
would be easier to say it is next to the City Bank building rather than
describing the various streets to get there.
••Secondly, sometime it is not important how good customers think you are.
It is more important that they think that you are at least as good as the
competition
• IIPM – Dare to think beyond iim
4)Positioning on the basis of price
Harpic Rs 45
Zenith – MNC Quality indian price
5)Positioning by use occasion & time-Associating the product with a
specific use is another commonly used positioning strategy
Vicks vaporub for child’s cold at night
burnol for burns
Clinic All Clear: “The dandruff-control shampoo
6) Positioning by corporate identity
In this corporate credentials are used to position the product
Dokoma – a tata product
7) positioning by product category
• it is used so that brand is perceived to belong to another
product category
• dove- positioned as skin cleanser
8) Positioning by Product User
•This is a strategy of associating the product with a particular
type or class of user. One way of doing this is through celebrity
endorsements.
•E.g. Lux-earlier their positioning was ‘Filmi Sitaroan Ka
Saboon’, now new Aishwarya’s advertise says that by using Lux
you can also become a star
• 8)positioning through guarantee
pure it – issse behtar aur kahan 1cr
guarantee
 Repositioning
• It is the process of changing the positioning of products if it is faulty and
has failed to achieve desired results
• Eg repositioning of lifebuoy- earlier lifebuoy was positioned as healthy
soap for rural people . But now it is positioned for urban
• Milkmaid- milkmaid was positioned as convenient form of milk for tea but
later repositioned as a milk for all purpose including sweets
• Hamam earlier positioned as men’s soap but later positioned as family
soap
• Godrej Consumer Products Limited (GCPL) is aiming to reposition its
winter wear wash brand ‘Ezee’ into a premium clothes washing brand
• Nano- celebrate citiness
• Voltas – sensible cooling to all weather ac