Segmentation,

Targeting,
Positioning

STP

https://www.youtube.com/watch?v=RcRFBVIvJHw

Market Segmentation
Dividing a market into smaller groups with distinct needs,
characteristics , or behavior that might require separate
marketing strategies or mixes
Targeting
The Process of evaluating each market segments attractiveness
and selecting one or more segments to enter
Differentiation
Actually differentiating the market offering to create superior
customer value

Positioning
Arranging for a market offering to occupy a clear, distinctive, and
desirable place relative to competing products in the mind of
target consumers

Why Segment the Market?

Facilitates Right Choice of Target Market

Facilitates Effective Tapping of the Chosen Market

Makes the Marketing Effort More Efficient and

Economic
Helps Identify Less Satisfied Segments and
Concentrate on Them
Benefits the Consumer as Well

Markets can be Segmented Using Several Bases

Demographic Segmentation

Age
Tweens, a new segment based on age
Gender
Women as a market segment for apparels
Adidas targets women in India
Purchasing capacity, a major base in
demographic segmentation

Buying Behaviour Segmentation

Usage-based segmentation
(Light/Medium/Heavy)
Start with current users of the brand
Tackle current users of competitors
brands
Tackle non-users, entering the category
for the first time
In India, in most categories, First Time
Users will mean a major segment

Buying Behaviour Segmentation (contd)

Benefit segmentation

Example of calorie watchers and health seekers: Diet Horlicks,

Diet Pepsi, Whole Wheat/ Brown Bread, Sugar Free

Volume segmentation

Quantity of purchase- actual or potential- is the base -CLV

Consumers segmented as light or medium or heavy users
Consumers segmented as bulk buyers and small scale buyers
Regular buyers and one-time buyers

Purchase occasion
Segmentation based on the specific occasion on which the
consumers buy the product

Attitude towards the product

Enthusiastic buyers, indifferent buyers, negative minded buyers

Loyalty to the brand

Extent of brand loyalty, another useful base

Buying Behaviour Segmentation is especially useful with new

products

Multi-Level Segmentation: A Market Can and Must be

Segmented Using Several Bases
The various bases discussed earlier are not mutually
exclusive; it is not an either or situation
Since customer characteristics stand distributed over
several variables, any market can be segmented through
several variables/ bases. They can also be used in
combinations
Multi-level segmentation enables sharper targeting and
choice of sharply focused marketing mix
Example of GM. GM identified 40 different customer needs in
passenger cars and correspondingly 40 different market
segments in which it would compete with its offers
http://www.srds.com/frontMatter/ips/lifestyle/reports/prizm.
html

Source: KPMG

Illustration: The time-starved consumers are ready to

pay a premium for better services and value
convenience

Selecting Target Market Segments

Indiv. Mrkting- Dell

Customized Vehicles
Service Industry : HNI

http://www.booktopia.com.au/
Gameday Boots
http://www.gamedayboots.com/#W10=|0

Unilever

Choosing a Targeting Strategy

Undifferentiated : Fords Model T

Firms resources limited------- Concentrated

marketing : Nycil
Multisegment Targeting : Horlicks

One-to-One Marketing : HNI customer

Choosing the Target Market

Evaluating the two segments

Is it sizeable?
Is it growing?
Is it profitable?
Is it accessible?

Is it compatible with the firms ambitions,

resources and capabilities?

Segment Attractiveness Analysis

Market Attractiveness (Size/Adaptability of consumer/Consumer resources)

Competitive Attractiveness (Entry barrier, Pioneer image, Potential & existing competition)

Channel Attractiveness

Internal Attractiveness (Core Competencies )

Organizational Goals

Market Gridding
Market Gridding means splitting the market based on the usage of the
product.

Home

Restaurant

Ice-Cream
Parlor

Factory

https://www.youtube.com/watch?v=OAEH3v_2r2g
Shopper Stops Bengali