Segmentation, Target and

Positioning
prashant@iimcal.ac.in
The Substance of Marketing
Want To Enter the Watch Business!!!

You Must Make A Set Of Important
(Marketing Related) Decisions!!!

WHAT ARE THESE DECISIONS???
The Probable Decisions are!!!
To which consumer should I sell my
watches?
How should I define the consumer I hope to
serve?
Should I think in terms of geography,
perhaps the country in which my consumer
lives?
Or may be the consumers income or sex or
fashion orientation is more important?
The Probable Decisions are!!!
What Product or Products should I offer?
For example should I offer digital or analog,
ornate or simple, multifunction or single
function?
How much should I charge for each watch?
Should I offer discounts to people who pay
cash or who buy in large amounts?
The Probable Decisions are!!!
Should I sell direct to consumers or through
stores, and if through stores, what type of
stores?
Do I want to offer my product in several
types of outlet or only in one type?
How do I select and service the particular
outlets I Chose?
Finally, How do I convince the store to carry
my brand?
The Probable Decisions are!!!
How should I communicate to the
consumers to whom I wish to sell?
Do I use advertising, and if so in what
media?
How do I reach the stores? Do I use sales
people?
Should the salespeople visit the stores or
should they just telephone them?
Views on the Marketing Processes
5-C Analysis
Customer
Competitor
Company
Collaborators
Context
S-T-P Marketing
Segmentation
Targeting
Positioning
4 Ps Marketing Plan
Product
Pricing
Promotion
Place
The Functional View
Views on the Marketing Processes
Understanding
Customer
Value
Creating
Customer
Value
The Process View
Capturing
Customer
Value
Delivering
Customer
Value
Sustaining
Customer
Value
Understanding Customer Value
Psychological
Functional
Economic
Steps in Market Segmentation,
Targeting,and Positioning
1. Identify
segmentation
variables and
segment the
market

2. Develop
profiles of
resulting
segments
Market
Segmentation
3. Evaluate
attractiveness
of each
segment

4. Select the
target
segment(s)
Market
Targeting
5. Identify
possible
positioning
concepts for
each target
segment

6. Select,
develop, and
communicate
the chosen
positioning
concept

Market
Positioning
Why Segmentation ?
Not all buyers alike
Subgroups may be identified
Subgroups smaller and more
homogeneous
Easier to satisfy smaller groups
How to Segment & Target?
1.
Break
market
down
2.
Group
into
segments
TARGET MARKET
3.
Choose
target
market
Basic Market-Preference
Patterns
(a) Homogeneous
preferences
Quality
E
c
o
n
o
m
y

(c) Clustered
preferences
E
c
o
n
o
m
y

Quality
(b) Diffused
preferences
E
c
o
n
o
m
y

Quality
Bases for Segmenting
Consumer Markets
Demographic
Sociographic
Lifestyle
Geographic
Behavior
Consumption
Predispositions
Bases for Segmenting
Business Markets
Geography
Organizational charateristics
Purchase behavior
Usage patterns
Organizational predispositions
Size, purchasing power, profiles
of segments can be measured.
Segments can be effectively
reached and served.
Segments are large or
profitable enough to serve.
Measurable
Accessible
Substantial
Differential



Actionable
Segments must respond
differently to different marketing
mix elements & programs.
Effective programs can be
designed to attract and serve
the segments.
Step 1. Market Segmentation
Requirements for Effective Segmentation
Segment 1
Segment 2
Segment 3
Segment 1
Segment 2
Segment 3
Company
Marketing
Mix
Company
Marketing
Mix
Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 3
Market
A. Undifferentiated Marketing
B. Differentiated Marketing
C. Concentrated Marketing
Step 2. Market Targeting
Market Coverage Strategies
Company Resources
Product Variability
Products Stage in the Life Cycle
Market Variability
Competitors Marketing Strategies
Step 2. Market Targeting
Choosing a Market-Coverage
Strategy
Step 3. Choosing a Positioning
Strategy
Products Position - the way the product is
defined by consumers on important
attributes - the place the product occupies
in consumers minds relative to competing
products.
Marketers must:
Plan positions to give their products the
greatest advantage in selected target markets,
Design marketing mixes to create these
planned positions.
Positioning
The way consumers perceive the brand
relative to its competition
ID competitive advantage
Stress salient characteristics
Differentiate
Services
Differentiation
i.e. Delivery, Installation,
Repair Services, Customer
Training Services
Product
Differentiation
i.e. Features,
Performance, Style &
Design, or Attributes
Image
Differentiation
i.e. Symbols,
Atmospheres, Events
Personnel
Differentiation
i.e. Hiring, Training
Better People Than
Competitors Do
Identifying Possible Competitive
Advantages
Five Patterns of Target Market
Selection
Single-segment
concentration
Product
specialization
M1 M2 M3
P1

P2

P3


Selective
specialization
M1 M2 M3
P1

P2

P3


M1 M2 M3
Full market
coverage
P1

P2

P3
Market
specialization
M1 M2 M3
P1

P2

P3
P1

P2

P3


M1 M2 M3
P = Product
M = Market
Gender
F
M
Age
14 - 21 22 - 29
G
e
o
g
r
a
p
h
y

Japan
Western
Europe
U.S.
Segment Cross-Classification:
Aerobic Shoes