• MARKET SEGMENTATION

• MARKET TARGETING
• POSITIONING
 Market Def
• A market refers to the group of actual and or
potential customers (individual, organisations and
government) that have a need that the products or
services can satisfy and who have the money,
authority and desire to buy the those products
profitably
• A market is simply people or organisations with needs
or wants and with the ability and willingness to buy.
• A group of people or an organization that lacks any
one of these characteristics is not a market
• A market is not a place or building but rather the
system of activities that foster an exchange process.
 MARKET Segmentation
• It is not possible for a firm to produce to
satisfy everyone in the market. The firm can
however, satisfy a group of customers.
• Dividing the entire market will give the firm a
good picture of the customers it wants to
serve profitably.
• Buyers in any market differ in their wants,
resources, locations, buying attitudes, and
buying practices
 Market Segmentation defined
• Market segmentation is the process of dividing
a market into smaller groups or segments with
distinct needs, characteristics, or behavior
that might require separate marketing
strategies or mixes.
• These segments consists of customers who
will respond similarly to marketing strategies
and who share traits such as similar interests,
needs, or locations
 Segmenting Consumer Markets
• There is no single way to segment a market. A
marketer has to try different segmentation
variables, alone (single variable segmentation) and
in combination (multiple variable segmentation), to
find the best way to view market structure.

• The following are the variables that might be used

in segmenting consumer markets – Geographic,
demographc, psychographic, and behavioral
variables
 Geographic Segmentation
• This refers to dividing the market into different
geographic units, such as nations, regions, states,
countries, cities etc.
• A company may decide to operate in one or few
geographical areas or operate in all areas but pay
attention to geographical differences in needs and
wants
• Companies these days are localizing their products,
services, advertisement and sales efforts to fit the
needs of individual regions, cities and other localities
 Demographic Segmentation
• This divides the market into segments based on the
population and their characteristics such as age,
life-cycle stage, gender, income, occupation,
education, religion, ethnicity etc.
• Demographic factors are the most popular basis for
segmenting customer groups. This is because even
when marketers have first defined segments using
other basis, they must know a segment’s
demographic characteristics to assess the size of
the target market and reach it efficiently.
 Psychographic Segmentation
• This divides buyers into different segments
based on social class (lower, working class,
upper), lifestyle (Achievers, strivers and
survivors) or personality characteristics
(outgoing, authoritarian).
• People in the same demographic group can
have very different psychographic
characteristics
 Behavioural Segmentation
• This divides buyers into segments based on their
knowledge, attitudes, uses, or responses to a
product.
• Occasion – buyers can be grouped according to
occasions when they get the idea to buy, actually
make their purchases, or use the purchased items.
• Benefit Sought - A powerful form of segmentation is
grouping buyers according to the different benefits
that they seek from the product.
• Benefit segmentation requires finding out what the
major benefits people look for in a product class,
the kinds of people who look for each benefit and
the major brands that deliver each benefit
Requirement for effective segmentation
• Measurable – The size, purchasing power, and
profiles of the segments can be measure
• Accessible – The market segments can be
effectively reached and served
• Substantial – The market segments are large or
profitable enough to serve. It would not pay,
for example , for an automobile manufacturer
to develop cars especially for people whose
height is greater than seven feet
 Requirements for effective segmentation
Cont.
• Differentiable – The Segments are conceptually
distinguishable and respond differently to different
marketing mix elements and programmes. If they
respond similarly, they do not constitute a separate
segment

• Actionably – Effective programmes can be designed for

attracting and serving the segments. Eg, although one
small airline identified seven market segments, their
staffs may be too small to develop separate marketing
programmes for each segment
 Market Targeting
• This involves breaking a market into segments
and then concentrating your marketing efforts
on one or few key segments consisting of the
customers whose needs and desires most
closely match your product or service offering
Target Market Selection Strategies
• Undifferentiated Marketing

• Differentiated Marketing

• Concentrated Marketing

• Micromarketing
 Undifferentiated Marketing
(Mass Marketing)
• With the undifferentiated (mass marketing)
strategy, a firm might decide to ignore market
segment differences and target the whole
market with one offer.
• This strategy focuses on what is common in the
needs of the consumers than what is different.
• The company designs a products and a
marketing programme that will appeal to the
largest number of buyers.
 Differentiated Marketing
• With the Differentiated Marketing (Segmented
marketing) strategy, a firm decides to target
several market segments and designs separate
offers for each.
• This gives the company hope for higher sales and
a stronger position within each market segment.
• Developing a stronger position within several
segments creates more total sales than
undifferentiated marketing across all segments
 Concentrated Marketing
• When using a concentrated marketing (niche
marketing) strategy, instead of going after a small
share of a large market, a firm goes after a large
share of one or a few smaller segments or niches.
• Through concentrated marketing, the firm
achieves a strong market position because of its
greater knowledge of consumer needs in the
niches it serves and the special reputation it
acquires
 Micromarketing
• Differentiated and concentrated marketing tailor their
offers and marketing programs to meet the needs of
various market segments and niches. At the same
time, however, they do not customized their offers to
each individual customer.
• Micromarketing is the practice of tailoring products
and marketing programmes to suit the tastes of
specific individuals and local customer segments.
• Rather than seeing a customer in every individual,
micro marketers see the individual in every customer
 Positioning

• Having chosen a strategy for reaching their

firm’s target market, marketers must then
decide how best to position the product.
• The concept of positioning seeks to put a
product in a certain position or place, in the
minds of prospective buyers
 Positioning Cont.
• Developing a specific marketing mix to
influence potential customers overall
perception of a brand, product line or
organization in general is known as Positioning

• Position – The place a product, brand, or

group of products occupies in consumers’
minds relative to competing offerings.
 Positioning Cont.
• Marketers use a positioning strategy to
distinguish their firm’s offerings from those of
competitors and create promotions that
communicate the desired position

• Possible approaches include positioning

products according to the following categories
 Positioning Strategies
• Attributes (Toyota cars – fuel efficiency)
• Benefits - Pepsodent toothpaste reduces cavities
• Price/Quality - Benz
• Competitors – Competitors provide two positioning strategies
Positioning directly against competitors eg Techno and Samsung
Positioning away from competitors – 7up is uncola alternative to coke and pepsi
• Activity - Milo for Sports
• Product user - Johnson & Johnson improved the market share for its baby
shampoo by repositioning it towards new user category – adults who
washed their hair frequently and needed a gentle shampoo
• Origin – Place of manufacture
• Personality – Nike Sports shoes associated with Michael Jordan
• Usage occasion – good morning oats, After Eight (after dinner mint to share)
• Product class (bath oil rather than soap)
 Repositioning
• Sometimes changes in the competitive
environment force marketers to reposition a
product.
• Repositioning a product means changing the
position it holds in the minds of prospective
buyers relative to the positions of competing
products.
• Repositioning may even be necessary for
successful products or firms