Segmentation, Targeting & Positioning

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Market Segment
A large identifiable group within a market with similar wants, purchasing power, geographical locations, buying attitudes etc.

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Steps in Market Segmentation, Targeting, and Positioning

Market Segmentation
1. Identify segmentation variables and segment the market 2. Develop profiles of resulting segments

Market Targeting
3. Evaluate attractiveness of each segment 4. Select the target segment(s)

Market Positioning
5. Identify possible positioning concepts for each target segment 6. Select, develop, and communicate the chosen positioning concept

Bases for Segmentation

Geographic Segmentation Demographic Segmentation Psychographic Segmentation Behavioral Segmentation

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Geographic Segmentation
Region Density Climate Population

Demographic Segmentation
Age Gender Income Occupation Education

Family Size & Family Life Cycle Religion

Psychographic Segmentation
Activities, Interests and Opinions(AIOs) Values, Attitudes and Lifestyles(VALs)

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Behavioral Segmentation
Personality/Lifestyle Social Class Occasion- Birthdays, Lunch-time, vacations Benefits Sought-travel ,business, vacation, educational Usage Rate-- light, medium, heavy

Behavioral Segmentation
User status non users, ex users, first time users, regular users, potential users Loyalty status diehards, shifters/switchers Buyer Readiness unaware aware informed interested desire intention to buy
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Local Marketing
When the marketing mix is altered to suit the local conditions e.g. Giving a higher/ lower discount than what s prevailing in the rest of the markets or implementing a different promotion scheme
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Individualised Marketing
When the firm deals with each customer on a one to one basis When products are customized for the customer

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Niche Marketing
What is an attractive niche ?
 A distinct set of needs  A premium can be charged  Not likely to attract competition  Gains certain economies through

specialisation

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Undifferentiated Marketing
Single product addressing all segments with a single marketing program. Mass production is possible giving scale economies Pushes price downwards enabling to attract price sensitive segments

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Differentiated Marketing
A separate market offering for every segment Marketing programs for every segment could be different Pushes up costs at various levels

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Mass Marketing versus Target Marketing

Mass Marketing: Views the market as a single market. Target Marketing: Recognizes and acts on differences within a market:
Optimum set of 4Ps is (likely) different for different segments

Target Marketing
Identifying those particular groups of customers which your product/service is capable of meeting their requirements (needs) most. Each of these groups constitute a market segment Selecting one or more segments to enter Establishing and communicating the product s key distinctive benefits in that market
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Target Marketing Strategies

Five basic strategies for target market selection:
(1) Single Segment Targeting (2) Selective Targeting (3) Mass Market Targeting (4) Product Specialization (5) Market Specialization

Basic Target Marketing Strategies

Criteria for Targeting: 9 W s

Who buys our product? Who does not buy it? What need or function does it serve? What are customers buying to satisfy the need ? Which way our product is targeted? What price are they paying? When is the product purchased? Where is it purchased? Why is it purchased?

3. POSITIONING
PRODUCT POSITION: The place the product occupies in consumers minds.
Function of perceptions, impressions and feelings

POSITIONING:
Attempting to influence how people see a product/service (products will occupy a position in a customer s mind)

Positioning
Kotler defined: designing an offer so that it occupies a distinct and valued place in the minds of the target customer.

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Positioning

Positioning:Image that customers have about a product in relation to the products competitors
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Volvo Cars
Volvo develops its car for buyers to whom safety is a major concern. Volvo positions its car as the safest a consumer can buy .

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Positioning Strategies
Product Attributes Benefits, Problem Solutions & Basic Needs Price & Quality Specific Use Against Other Products Against a Competitor

Questions???

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