Session 7

Segmentation, Targeting & Positioning

Market Segmentation

 Market Segmentation: division of the total

market into smaller, relatively homogeneous
groups.

 No single marketing mix can satisfy everyone.

Therefore, separate marketing mixes should be
used for different market segments.

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Levels of Market Segmentation
Mass Marketing
Same product to all consumers
(no segmentation)

Segment Marketing
Different products to one or more segments
(some segmentation)

Niche Marketing
Different products to subgroups within segments
( more segmentation)

Micromarketing
Products to suit the tastes of individuals or locations
(complete segmentation)
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 Steps in Segmenting Markets

1 2 3 4 5 6
Select Choose Select Profile Select Design,
a market bases descriptors and target implement,
for for analyze markets maintain
study segmen- segments marketing
tation mix

Note that steps 5 and 6 are actually marketing activities that follow market segmentation (steps 1 through 4).

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Bases for Segmenting Consumer Markets

Geographic
Nations, states,
regions or cities

Demographic
Age, gender,
family size and
life cycle, or
income
Psychographic
Social class, lifestyle,
or personality

Behavioral
Occasions, benefits,
uses, or responses

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Using Geographic Segmentation

 Demand for some goods and services can vary

according to the geographic region
 Most major brands get 40-80 percent of their sales
from what are called core regions
 Regional sentiments and culture is another important
segmentation factor:
 Rice and Fish favorite food in Bengal/Orissa
 N-E states have high commonalities

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Segmenting by age

 Sociologists attribute different consumer needs

and wants among various age groups to the
cohort effect.

 Cohort effect is a tendency among members of a

generation to be influenced and drawn together
by significant events occurring during their key
formative years, roughly 17 to 22 years of age

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Family Life Cycle Stages Segmentation

 The process of family

formation and
dissolution.
 The underlying theme
is that life stage, not
age per se, is the
primary determinant of
many consumer
purchases.

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Usage Rates

 Segmenting by grouping people according

to the amounts of a product that they buy
and use
 Markets often divided into heavy-user,
moderate-user, and light-user segments
 The 80/20 principle (“Pareto’s Law”) holds
that a big percentage of a product’s
revenues (roughly 80%) comes from a
relative small, loyal percentage (around
20%) of total customers

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Pharmaceutical industry segmentation

Wednesday, June 19, 2019 11

 Shopper Segments : India
DISCERNING “I am very particular about the brands and products I buy for my
SHOPPER IS IT GOOD
family. Offers are necessary but they have to be relevant to me” ENOUGH?

BARGAIN “If I find a good offer I will buy it even if I don’t need that product IS IT ON SPECIAL
HUNTER at that time” OFFER?

“The store that you shop at reflects your status… when I tell my
IMAGE SHOPPER IS IT UP
friends where I shop, they need to feel that I have some class…”
MARKET?

CONVENIENCE “I juggle so many things during the day, I want things that make
SHOPPER IS IT EASY?
my life easier, even if it means paying a little more ”

COMPETITIVE “I like visiting various stores to see what’s the latest…I get a high IS IT NEW?
SHOPPER when my friends ask my opinion of new launches”

“My life today is better than it was yesterday, and will be better
PROGRESSIVE IS IT BETTER
tomorrow… my shopping reflects this… I can afford so much more
SHOPPER THAN BEFORE?
now…”
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Criteria for Effective Segmentation

 Market segmentation cannot be used in all cases. To

be effective, segmentation must meet the following
basic requirements.
 The market segments must be measurable in
terms of both purchasing power and size.
 Marketers must be able to effectively promote to
and serve a market segment.
 Market segments must be sufficiently large to be
potentially profitable.
 The number of segments must match the firm’s
capabilities.

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Targeting-Evaluating Market Segments

 Segment Size and Growth

 Analyze sales, growth rates and expected profitability.

 Segment Structural Attractiveness

 Consider effects of: Competitors, Availability of
Substitute Products and, the Power of Buyers &
Suppliers.

 Company Objectives and Resources

 Company skills & resources relative to the segment(s).

 Look for Competitive Advantages.

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Market Targeting
Market Coverage Strategies
Company
Marketing Market
Mix

A. Undifferentiated Marketing
Company
Marketing Mix 1 Segment 1
Company
Segment 2
Marketing Mix 2
Company
Segment 3
Marketing Mix 3
B. Differentiated Marketing

Segment 1
Company
Marketing Segment 2
Mix
Segment 3

C. Concentrated Marketing
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 Five Patterns of Target Market
Selection
Single-segment Selective Product
concentration specialization specialization
M1 M2 M3 M1 M2 M3 M1 M2 M3
P1 P1 P1
P2 P2 P2
P3 P3 P3
Market Full market
specialization coverage
M1 M2 M3 M1 M2 M3
P = Product P1 P1
M = Market
P2 P2
P3 P3
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 Steps in Market Segmentation,
Targeting, and Positioning
Market Market Market
Segmentation Targeting Positioning
1. Identify 3. Evaluate 5. Identify
segmentation attractiveness possible
positioning
variables and of each concepts for
segment the segment each target
market segment
4. Select the
2. Develop target 6. Select,
profiles of segment(s) develop, and
communicate
resulting the chosen
segments positioning
Wednesday, June 19, 2019 MMFC_session 8_STP
concept 18
 Product Positioning

 Positioning is what you do to the mind of the

prospect. That is, you position the product in
the mind of the prospect.
-Al Ries and Jack Trout (1981)

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Positioning of Procter & Gamble
Detergents
Market
Brand Positioning
Share
Tide Tough, powerful cleaning 31.1%

Cheer Tough cleaning, color protection 8.2%

Bold Detergent plus fabric softener 2.9%

Gain Sunshine scent and odor-removing formula 2.6%

Era Stain treatment and stain removal 2.2%

Dash Value brand 1.8%

Oxydol Bleach-boosted formula, whitening 1.4%

Solo Detergent and fabric softener in liquid form 1.2%

Dreft Outstanding cleaning for baby clothes, safe 1.0%

LO 9
Ivory Snow Fabric & skin safety on baby clothes 0.7%

ArielWednesday, June 19,

Tough
2019 cleaner, aimed at Hispanic
MMFC_session 8_STP market 200.1%
Product Positioning Dimensions
 Product Attributes / Differences / Benefits

 Product User / Usage

 By Association

 Problem Solution

 Against a Competitor / Away from

Competitors
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Perceptual Mapping

A means of displaying or graphing, in two

or more dimensions, the location of
products, brands, or groups of products in
customers’ minds.

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Product Positioning using perceptual maps
High moisturizing
Zest
Tone 7
4
Lever 2000
Dove
5 2

Safeguard
Coast
Lux 8
Nondeodorant 3 Deodorant

1
Dial
Lifebuoy
Lava
6

Wednesday, June 19, 2019 MMFC_session 8_STP

Low moisturizing 24
 Exercise #: Beer Market
• How would you name vertical and horizontal axes?
• Which two attributes are most important to describe the horizontal axis?
Popular
Full Bodied Heavy with Men

Special
Occasions
Blue Collar Dining Out Premium
Good Value

Popular
Pale Color with
Women
On a
Budget Light Less Filling
Interesting web site to visit: www.ratebeer.com
 Exercise # Solution
• How would you name vertical and horizontal axes?
- Vertical: Heavy/Light
- Horizontal: Premium/Budget

• Which two attributes are most important to describe the horizontal axis?
- Premium
- Good value
 Exercise #: Beer Market
• Which beer is most popular with men?
• In what ways does Budweiser different from Miller or Coors?
Heavy Popular
Full Bodied Heavy with Men
Old Milwaukee
•
Budweiser
• Beck’s •
Meister Brau Special • Heineken
• Miller • Occasions
Blue Collar
Good Value • Dining Out Premium
• Coors
Budget Stroh’s Premium
• Michelob
• Coors Popular
Pale Color
Miller
Lite
• Light with

On a
• Women
Old
Budget Milwaukee Light Light Less Filling
Light
 Group Exercise #4- Solution
• Which beer is most popular with men?
- Beck’s

• In what ways does Budweiser different from Miller or Coors?

- More popular with men
- Heavier
- Less preferred for special occasion
 Joint Space Map of Beer Market
(Perception + Preference)

Heavy

Old Milwaukee
• Budweiser

•
3 Meister Brau
1
4
Beck’s •
• Heineken
• Miller •
•
• Coors
Budget Stroh’s Premium
2
• Michelob
5
• Coors
Miller
Lite
• Light
•
Old
Milwaukee Light
Light
Interesting web site to visit: www.ratebeer.com
 Exercise #: Beer Market
• Which beers are most likely to be purchased by consumer in segment #3?
• If you reposition Stroh’s, where would you move this product?
Heavy

Old Milwaukee
• Budweiser

3
• 1
4
Beck’s •
Meister Brau • Heineken
• Miller •
•
• Coors
Budget Stroh’s Premium
2
• Michelob
5
• Coors
Miller
Lite
• Light
•
Old
Milwaukee Light
Light
 Group Exercise #5- Solution
• Which beers are most likely to be purchased by consumer in segment #3?
- Old Milwaukee

• If you reposition Stroh’s, where would you move this product?

- Toward segment #5