Running Head: Segmentation, Targeting and Positioning

Segmentation, Targeting and Positioning

Name of Student

Segmentation, Targeting and Positioning

Table of Contents
Introduction.................................................................................................................. 3
Segmentation Targeting and Positioning Of Nestle................................................................3
Market segmentation................................................................................................... 3
Geographic segmentation.......................................................................................... 3
Demographic segmentation........................................................................................ 4
Psychographic Segmentation...................................................................................... 4
Targeting strategy....................................................................................................... 5
Positioning strategy..................................................................................................... 5
Segmentation Targeting and Positioning Of Colgate-Palmolive................................................6
Market segmentation................................................................................................... 6
Geographic segmentation.......................................................................................... 6
Demographic segmentation........................................................................................ 6
Psychographic segmentation...................................................................................... 6
Behavioral segmentation............................................................................................ 7
Customer location.................................................................................................... 7
Transaction conditions.............................................................................................. 7
Positioning................................................................................................................. 7
Conclusion.................................................................................................................... 8
References.................................................................................................................... 9

Segmentation, Targeting and Positioning

Introduction
Segmentation, targeting and positioning are interrelated activities which are important to
achieving a successful Marketing Mix. In this assignment there would be analysis of two
companies who have successfully implemented these concepts in order to pursuit the targets and
goals of the business (Clifford, 2005).
The two companies that have been selected for this assignment are Colgate-Palmolive and
Nestle.
Segmentation Targeting and Positioning Of Nestle
Nestle is working in global scale and the major products of Nestle are the nutrition and milk
products, different confectionary products and beverages. Worldwide, Nestle has more than
millions of customers and with the help of their segmentation, targeting and positioning strategy
that they have implemented, they are the pioneers of their field.
Market segmentation
The basic concept of marketing derives the customer requirements i.e. the need analysis, and
how to satisfy that need better as compared to the competitors. There are different requirements
of different customers and it is not an easy task to identify the needs and wants of every customer
and try to fulfill the requirements of each individual customer. In market segmentation,
organizations or companies divide the market according to the niche in order to classify those
customers (Reutterer, 2006).
The market segmentation of Nestle is typically divided into 4 key areas:
Geographic segmentation
The geographic segmentation of Nestle is done using a three-dimensional approach in which the
company focuses on cities, regions and states. In these three dimensions, the further market is
divided into urban areas and rural areas. In order to segment the market geographically, the
geographic variables used by Nestle are:
Area: The product Slim Milk of Nestle is limited to urban ad semi-urban areas of each
country.
City: Different cities are divided as Class A and Class B.

Segmentation, Targeting and Positioning

Region: The process of distribution is held constant across the urban and rural areas.
Demographic segmentation
For the demographic segmentation, Nestle has divided the market into a number of different
groups which includes different variables like income, age, occupation, gender and many more.
Through segmenting the market into these variables, the marketers can easily distinguish
between the different consumer wants and needs (Natter, 2001).
Age
For the consumers with age groups between 20 to 40 years, the company believes that these age
group of consumers are a major share for the company as they are young and energetic
professionals who have a desire to lead a good and a healthy life but are having a limited time.
For consumers of middle and elderly age groups, the convenient and ready to use packaging of
the milk is suitable, but this is the age group which the company has less interest to focus
(Ozimec, 2010).
Gender
The product Slim Milk has been positioned for those consumers who wish to look good,
healthy and active.
Income
Most of the products of Nestle are considered as luxury brands, so this implies that the company
has a major focus on consumers who are earning good income.
Occupation
Athletes, students, health enthusiasts, sports enthusiasts and working professionals.
Psychographic Segmentation
For the purpose of psychographic segmentation, the company has divided in accordance with
following methods:
Benefits: health and quality.
User status: regular usage.

Segmentation, Targeting and Positioning

Lifestyle: students, working class executives and business class people.

Loyalty status: loyal and regular.
Personality: health conscious and hardworking
Attitude towards the product: grateful and enthusiasts (Verhoef, 2011).
Targeting strategy
After the careful market segmentation, the next stage is to reveal the actual target market into
which the company will be operating. On the basis of geographic, demographic, psychographic
and behavioral segmentation, the company derives the target market.
In regard to the geographic segmentation, the target market for Slim Milk are big cities. In regard
to the demographics, the targeted market is young and working professionals. For the
psychographic segmentation, the main target market is the class which is belonging to the social
and economic class. For the last segmentation type i.e. the behavioral segmentation, the actual
target market is are the old or regular users as well as the new users. The targeted market are the
hyper markets, departmental stores and grocery shops (Reiner, 2007).
Positioning strategy
by efficiently making the channel, people, services, products and the brand image, the final
strategy that the company implements is the positioning strategy that where to position the
products in comparison to the competitors.
The positioning of Slim Milk is only made in the upper-middle or the upper class, and the
product is positioned in a way that it is a luxury brand (Grier, 2005).

Segmentation, Targeting and Positioning

Segmentation Targeting and Positioning Of Colgate-Palmolive

In the process of market segmentation by Colgate, they divide the markets from with big
geography into smaller ones. This provides an easy access of the different segmentations to be
targeted. This procedure is only reliable where there are big target markets. The company has
been implementing this strategy to most of their products and making it an approach that is
typically being used by most of the companies globally. The basis of a typical market
segmentation of Colgate-Palmolive is based on the level of satisfaction of the consumer.
Market segmentation
Consumer market at Colgate is divided into the following basic segments:
Geographic segmentation
On the basis of different climatic conditions, areas division from rural to urban, population
factors and regions. For areas where the temperature are higher, Colgate offers sunscreen
ingredients into its soap products which protects the skin from UV rays. For a company like
Colgate, the climate condition is of most importance (Kumanyika, 2006).
Demographic segmentation
The company understands that the needs of a younger population is entirely different from that of
an elderly man. Furthermore, a young girl is more likely to use a soap for her face cleaning, in
contrast to it, a girl who is earning is more likely to use a face-wash instead of a simple soap. In
consideration of a gender based segmentation, it has been observed that young girls are more
likely to use personal or beauty care products as compared to younger boys of the same age.
Psychographic segmentation
It has been observed by a number of researches that its the life style of a person which
distinguishes them from the others and significantly affects their buying patterns or buying
preferences. There are many products that are offered by Colgate which are representing a
strategy that is based on different or niche lifestyle (Aaker, 2000).
A strategy that is based on lifestyle is a difficult strategy as compared to a normal strategy. It is
near to impossible to let know the latest trends of the market and make a product in accordance
with the current market trend.

Segmentation, Targeting and Positioning

Behavioral segmentation
The behavioral segmentation is comprised of two different aspects. The first aspect is the desire
of the product by the consumer and the second aspect is the rate at which the consumer is buying
that specific product. The concept of behavioral segmentation can been observed in case of
Colgate. Benefits which the toothpaste of Colgate can provide includes whiter teeth, good
quality, low price tags, no cavities, fresh breath and no plague. From the sales data, the use of the
product among the consumers can be determined. In each market, it can be observed that the
most number of sales that have been generated are from the sales of Colgate in toothpaste
category. Through this type of sales data, the marketers analyze the rate of sales in each targeted
market. Through this way the marketers implements the behavioral segmentation (Mensinger,
2007).
Customer location
The marketers of Colgate are very active and they know exactly where they are doing their
market and to what customers. In more than 25 countries, Colgate has set its market around the
world. In each of these countries, the company has implemented marketing segmentation
separately according to that particular market. Out of those countries, some are developed, some
are under-developed.
Transaction conditions
Order size of the product, rate of usage of the product and different buying situations are
included in the transaction conditions. However, the concept of transaction condition is not valid
in case of Colgate-Palmolive, the reason is that the product of Colgate is highly used product in
the market.
Positioning
The people at Colgate have managed successfully to sustain through the tough competition that
they are facing continuously from their competitors. All the other sources such as the
advertisement and media are also held responsible for the success in creating the positive brand
image of the product in a global scale (Thornton, 2006).
A top performer marketing person at Colgate once said:

Segmentation, Targeting and Positioning

It is all my pleasure to welcome you to the world of Colgate-Palmolive. The company is really a
brand that is serving in more than 195 countries

Segmentation, Targeting and Positioning

Conclusion
It can be seen that all the international brands in the world are using market segmentation in
order to better understand the market and the consumers wants and needs. So far, in this
assignment we observed that Nestle and Colgate-Palmolive are successful in achieving a
marketing mix that is successful for the success of the company in the global market place.
According to the requirements of each company, they are successfully implementing the market
segmentation, target market and positioning strategy in order to compete well in the global
market.

Segmentation, Targeting and Positioning

10

References
Aaker, J., 2000. Non-Target Market Effects and Viewer Distinctiveness: The Impact of Target
Marketing on Attitudes.
Clifford, D., 2005. The Winning Performance: How America's High Grow Companies Succeed.
Grier, S., 2005. Social marketing in public health.
Kumanyika, S., 2006. Targeting interventions for ethnic minority and low-income populations.
Mensinger, J., 2007. The context for choice: health implications of targeted food and beverage
marketing to African Americans.
Natter, M., 2001. The effect of incentive schemes and organizational arrangements on the new
product development process.
Ozimec, A., 2010. Geographical Information Systems-Based Marketing Decisions: Effects of
Alternative Visualizations on Decision Quality.
Reiner, G., 2007. Conditional market segmentation by neural networks: a Monte-Carlo study.
Reutterer, T., 2006. A dynamic segmentation approach for targeting and customizing direct
marketing campaigns.
Thornton, C., 2006. Crossover dreams: Consumer responses to ethnic-oriented products.
Verhoef, P. C., 2011. Segmentation-based competitive analysis with MULTICLUS and topology
representing networks.