SLM-Unit-07-MB0046

Marketing Management Unit 7

Sikkim Manipal University Page No. 121

Unit 7 Segmentation, Targeting and Positioning

Structure:

7.1 Introduction

Learning Objectives

7.2 Concept of Market Segmentation (S)

7.3 Benefits of Market Segmentation

7.4 Requisites of Effective Segmentation

7.5 The process of Market Segmentation

7.6 Bases for Segmenting Consumer Markets

7.7 Targeting (T)

7.8 Market Positioning (P)

7.9 Summary

7.10 Terminal Questions

7.11 Answers

7.12 Mini-Case

7.1 Introduction

Market segmentation is the first step in applying the marketing strategy. In

this process the marketers divide the market into homogeneous

sub-markets. On the basis of segmentation, the company will prepare and

follow different marketing programs for different segments to ensure better

customer relationship. This unit deals with the bases of market

segmentation, targeting and positioning in the minds of consumers.

Learning Objectives

After studying this unit, you will be able to

Explain the bases of market segmentation

Explain the concepts and benefits of market segmentation.

Mention the requisites of effective segmentation.

Describe the process of evaluating market segments.

Identify appropriate target market for given segment.

Develop positioning strategies and analyze the same on the basis of the

companies‟ product differentiation.



7.2 Concept of Market Segmentation

Market Segmentation is the process of dividing a potential market into

distinct sub-markets of consumers with common needs and characteristics.

Exhibit 1

Why Segmentation?

In India, majority of the Hindu married women, contrary of the part of the

country they belong to, sport a mangalasutra. But it‟s the design of the

pendant that differentiates Mrs. Sharma from New Delhi and a

Mrs. Venkataraman from Chennai.

In America, consumer marketers such as P&G and Unilever have created

different kinds of utensil cleaners, laundry care products for Hispanics

and African-Americans. The reason being that they have different

cleaning needs depending on the way they cook and the kind of clothes

they wear. One would have imagined given the famed Indian diversity

that marketers here would have produced a host of products and product

variants to cater to large differences that exist regionally, religiously and

not to mention by caste.

So why have marketers shied away from creating products specifically for

them – despite large grouping that have completely different needs. Or

for that matter how many companies have actually devised products that

are specific to a particular community? Traditionally large Indian

companies concentrated or cared only about the urban consumers giving

importance to metros and other important cities. Many marketing experts

believe that product designers and marketers in India have traditionally

been careful of not courting specific communities, in the fear of distancing

themselves from others- a case of what might well be labeled as pseudo

secular marketing. However, in not Targeting the specific ethnicities of

the Indian society, national companies are possibly losing a huge

opportunity to take their products to the next level of popularity. “A Niche

market only implies that it is focused, it need not necessarily mean

small,” says Anand Halve who runs Chlorophyll, a brand consulting firm.

He feels national brands have a mental block when it comes to thinking

regionally, as they are constantly searching for the lowest common

denominator. Parvati Mahadev, a consumer insights consultant with



Brandscapes puts it well when she says that by standardizing products,

one may end up meaning something to everybody, but fall short of

meaning “a lot to some people”.

Some marketing experts say catering to various social segments can

take place at several levels. First if the preferences are starkly different,

companies will have to design altogether different products (say Beef

products for Muslims). Second is where a difference in habit calls for a

change in design like a spicier wafer variant in Tamilians or Andhraites.

Another important aspect is communication and marketing for a product

to cater to various cultures. Ironically marketers who have chosen to walk

this path have been rewarded. Anchor Toothpaste, for example, changed

the paradigm for social targeting by introducing 100% vegetarian

toothpaste in early 2000‟s. The Gujarati based Anchor originally had in

mind only Gujaratis and Marwaris as the key communities for the

product. Similarly, Big Bazaar has been actively mapping tastes of its

customers and uses it for better assortment of products. Rajan Malhotra

CEO Big Bazaar points out that the chain actively stocks sticky dal in

places where there is a dominance of Gujaratis and spices where it sees

Tamilians.

Pizza hut, an international brand that believes in uniformity of its products

has chosen to do things differently in India. It has special vegetarian

outlets in Gujarat whereas in Hyderabad it does not serve pepperoni

items.

Asian Paints pushed the envelope the most. In the 1990‟s it put out a

series of ads – each of them targeted a specific community like Punjabis

or Tamilians. They were mainly aired in the run-up to a festival, like

Pongal (Tamil New Year) or Gudi Padwa (celebrated widely in

Maharashtra). It helped the brand build a “strong emotional connect” as

Amit Syngle, VP – Sales and Marketing, Asian Paints puts it.

According to Shiv Vishvanathan, a noted social scientist, uniform product

design is more a matter of pragmatism than hypocrisy. “Ethnicity or

customs cannot be core value for a large brand, as much as

competency,” he says.

But market watchers say food, media and certain daily utility articles are



objects where companies can gain the most by nuanced ethnic targeting.

Islamic experts say there is tremendous opportunity in items like alcohol-

free perfumes, special toothpastes, halal cosmetics, toiletries,

customized housing and even Islamic dolls.

Increasingly brands are trying to iron out the lovely and interesting kinks

(in their target audience) and making it one smooth landscape,” says

Mahadev, “while the net result is beautiful, I wonder whether this helps in

creating a more clear identity,” she added.

Most experts say in these days of media explosion, it is relatively easy to

reach out to various ethnicities of the country, Regional channels and

newspapers are dime a dozen. All it would make a different (and a

special) commercial in Bengali or Urdu. Nobody can complain anymore

that the costs of popularizing a new ethnic product are inhibiting. HUL

and its ad agency Lowe broke new ground here when they launched a

different set of ads for Surf Excel in the South, where the water is hard

and lather limited, quite contrary to the usual detergent ad with images of

frothing detergent. Clearly here was the case of recognizing that different

consumers have different needs.

Perhaps like in detergents, when parity or uniform products grow and

marketers are faced with stagnating volumes, they will take advantage of

the diversity that exists in India.

(Source: Brand Equity, The Economic Times, 25th November 2009)

7.3 Benefits of Market Segmentation

1. Understanding the needs of Consumers

2. To adopt better positioning strategies

3. Proper allocation of marketing budget

4. Helps in preparing a better competitive strategy

5. Provides guidelines in preparing media plan of the company

6. Different offerings in different segments enhance the sales

7. Customer gets more customized product

8. Helps Company to identify niche markets

9. Provides opportunities to expand market

10. Encourages innovation



7.4 Requisites of Effective Segmentation

To be useful, market segmentation must exhibit some characteristics that

are as follows:

1. Measurable and Obtainable: The size, profile and other relevant

characteristics of the segment must be measurable and obtainable in

terms of data. If the information is not obtainable, no segmentation can

be carried out. For example, Census of India provides the data on

migration and education level, but does not specify how many of the

migrated employees are educated and if educated how many are in

white collared jobs. If a company wants to target white color collared

employees who are migrated to particular city, it will not able to measure

the same. .

2. Substantial: The segment should be large enough to be profitable. For

consumer markets, the small segment might disproportionably increase

the cost and hence products are priced too high. For example, when the

cellular services started in India cost of the incoming calls and outgoing

calls were charged at Rs 12/minute. As the number of subscribers grew,

incoming calls became free. Further growth of subscribers resulted in

lowering tariffs for outgoing calls to the lowest level in the world.

3. Accessible: The segment should be accessible through existing

network of people at an affordable cost. For example, Majority of the

rural population is still not able to access the internet due to the high

cost and non-availability of connections and bandwidth.

4. Differentiable: The segments should be different from each other and

may require different 4Ps and programs. For example, Life Insurance

Corporation of India needs separate marketing programs to sell their

insurance plans, unit plans, pension plans and group schemes

5. Actionable: The segments which a company wishes to pursue must be

actionable in the sense that there should be sufficient finance,

personnel, and capability to take them all.

Activity 1:

Mention how a nearby hospital has segmented its customers and how

segmentation has helped the hospital in providing more services.



7.5 The Process of Market Segmentation

Figure 7.2

1. Identify existing and future wants in the current market

Marketers must examine the changing needs of the customer. This

process provides opportunity to examine whether customers are

satisfied with the existing products or not. If they are not satisfied what

are the features they are not happy with or what kind of features they

would like to have in the product at. It also helps to test the innovative

concepts that company has, commercially viable or not. For example,

Titan, wrist watch manufacturer from Tata group should analyze whether

customers are satisfied with the time accuracy in the watch. It should

also analyze what are the other features customers are looking for in

their watch. It may be style, calculator, voice recorder, jewels studded or

pulse monitor. In this case, time accuracy becomes the existing want

and other features become future wants.

2. Examine the attributes that distinguish segments.

In this process marketers should segregate different types of wants into

homogeneous categories. This may be on the basis of product features,

lifestyle or behavior. For example, Titan should analyze how style,

calculator, voice recorder, jewels studded and pulse monitor attributes



are different. Is there any possibility of bringing some of these features

together? If yes what are the attributes that makes it homogeneous. To

illustrate, student community may be interested in style and also want

calculator in their watch.

3. Evaluate the proposed segment attractiveness on the basis of

measurability, accessibility, and size.

Segments selected in the above steps should be evaluated against the

requisites i.e. measurability, accessibility, substantial, actionable and

differentiability. Company‟s further programs will depend on the outcome

of this process.

Titan should examine

a. How large is the student segment is, who like style and also want

calculator?

b. How to get the data pertaining to these students?

c. Whether this segment is accessible to existing Titan showrooms?

d. How this segment is different from current segments? If selected,

what value this proposed segment adds to the company?

Self Assessment Questions

1. ____________is the process of dividing a potential market into distinct

sub-markets of consumers with common needs and characteristics.

2. Measurability of the segment is assessed on

a. Size

b. Profitability

c. Required resources

d. All the above.

3. The requisite of segmentation which specify on 4Ps and programs is

a. Action

b. Substantial

c. Differentiability

d. All the above.

4. Future wants of the customer should be analyzed before identifying the

segments.

a. Yes

b. No



5. Segmentation encourages innovation

a. True

b. False

7.6 Bases for Segmenting Consumer Markets

Figure 7.3

1) Geographic segmentation: In this type of segmentation, the market is

divided into different geographical units such as nations, states, regions,

cities or neighborhoods. The company can operate in one or a few

Geographic areas or operate in all but pay attention to local variations.

For example, Bennett, Coleman and Co. Ltd divided markets according

to geographical units for their tabloids. In Bangalore, the tabloid is

known as Bangalore Mirror where as it is Mumbai Mirror in Mumbai.

2) Demographic Segmentation: In demographic segmentation the market

is divided into groups based on variables such as age, family size, family

life-cycle, gender, income, occupation, education, religion, race,

Consumer

Market

Segments



generation, nationality and social class. Demographic variables are the

most popular bases for distinguishing customer groups. One reason is

that consumers‟ wants, preferences and usage rates are often

associated with demographic variables. Demographic variables are easy

to measure. Even when the target market is described in non-

demographic terms, the link back to demographic characteristics is

needed in order to estimate the size of the target market and appropriate

media that should be used to reach it efficiently. Some of the

demographic variables used are :

a) Age and Life-Cycle Stage: Consumers‟ wants and abilities change

with age. On the basis of age, a market can be divided into four parts

viz., children, young, adults and old. For the consumers belonging to

the different age groups, different types of products are produced.

For instance, different types of ready-made garments are produced

for consumers of different age groups. A successful marketing

manager should understand the age group for which the product

would be most suited and determine a suitable marketing policy,

pricing policy, advertising policy etc...

For example, HUL launched „Pepsodent kids‟ toothpaste for small

children.

b) Gender: Gender segmentation has long been applied in clothing,

hair-styling, cosmetics and magazines. For example, Emami

segmented its personal care products on the basis of gender i.e.

Emami Naturally Fair for women and Fair and Handsome for men.

c) Income: Segmentation based on Income is a traditional practice

followed in product categories such as automobiles, clothing,

cosmetics and travel. However, income does not always determine

the best customers for a given product.

For example, Baja Auto limited, a leading automobile company,

manufactures different bikes for different commuters on the basis of

the Income levels. For entry level (income less than Rs 35000) it is

Bajaj CT 100, for mid segment (income greater than Rs 35000 but

less than Rs. 60000) it is Pulsar and for the upper segment (income

greater than Rs 60000) Avenger and Eliminator are positioned

respectively.



3) Psychographic Segmentation: In Psychographic segmentation, buyers

are classified into different groups on the basis of life-style or personality

and values. People within the same demographic group can exhibit very

different psychographic profiles.

a) Life-style: People have different life-styles and products they

consume express their life-styles. Many companies seek

opportunities in life-style segmentation. But life-style segmentation

does not always work.

Figure 7.4

One of the most used psychographic profiling schemes is called

VALSTM. Developed by SRI International, Inc., its first version, groups

the entire U.S. population into eight groups, based on the identities

they seek and implement via marketplace behaviors.

The Eight VALSTM Group: Using the self-orientation and resources

dimensions, VALS defines eight segments of adult consumers who

have different attitudes, exhibit distinctive behavior and decision

making patterns. These segments are Innovators Thinkers,

Achievers, Experiencers, Believers, Strivers, Makers and Survivors



Innovators are successful, sophisticated, active, take-charge people

with high self-esteem and abundant resources. They are leaders in

business and government and are interested in growth, innovation,

and change. They seek to develop, explore and express themselves

in a variety of ways, sometimes guided by principles and sometimes

by a desire to have an effect or to make a change. They seek to

develop, explore and express themselves in a variety of ways. Image

is important to them, not as evidence of status or power but as an

expression of their taste, independence, and character. They

possess a wide range of interests, are concerned with social issues,

and show a cultivated taste for the finer things in life. For example,

CEO‟s of MNC‟s, Entrepreneurs belong to this category.

Thinkers are mature, satisfied, comfortable, reflective people who

value order, knowledge, and responsibility. Most are well educated

and in (or recently retired from) professional occupations, content

with their career, families, and tend to center around the home.

Thinkers have a moderate respect for the status quo institution, but

they are open minded to new ideas and social changes. They tend to

base their decision on firmly held principles and consequently

appear calm and self-assured. Thinkers are conservative, practical

consumers who value performance, service, and price more than

personal values (e.g., social and emotional values). For example:

Senior professionals, Politicians can make up this segment.

Achievers are successful career or work oriented people who like to

feel that they are in control of their lives. They value predictability

and stability over risk. They are deeply committed to work and

family. Work provides them with a sense of duty, material rewards,

and prestige. Their social lives are centered on family, religion and

career. Achievers follow conventional lives, are conservative in

nature, and respect authority and status quo. Image is important to

them. They favor established prestige products and services that

show success to their peers. For example, Successful professionals

like Doctors, Lawyers belong to this segment.

Experiencers are young, enthusiastic, impulsive, and rebellious.

They seek variety and excitement, savoring the new, the offsets, and



the risky. They are still in the process of formulating life values and

behavior patterns and quickly become enthusiastic about new

possibilities but are equally cool also. At this stage in their lives they

are politically uncommitted, uninformed, and highly unsure about

what they believe. Their energy finds an outlet in exercise, sports,

outdoor recreation, and social activities. Experiences are avid

consumers and spend much of their income on clothing, fast food,

music and movies For example; Young IT professionals belong in

this category.

Believers are conservative, conventional people with commitment to

family, religion, community, and the nation. Living by a moral code is

very important to them. As consumers, Believers are conservative

and predictable and favor domestic products and established

brands. Their income, education, and energy levels are modest but

sufficient to meet their needs. For example, Middle income groups

belong to this category.

Strivers seek motivation, self-definition and approval from the world

around them. They strive to find a secure place in life, and may lack

economic, social, and psychological resources. Strivers are

concerned about the opinions and approval of others. Money defines

success for them and they often feel that life has given them a raw

deal as they find they don‟t have enough money. Strivers are

impressed by possessions, but what they wish to obtain is often

beyond their reach. For example, low income groups are a part of

this market segment.

Makers are practical people who have constructive skills and value

self-sufficiency. They live within a traditional context of family,

practical work and physical recreation and have little interest in what

lies outside that context. Makers experience the world by working in

it, building a house, raising children, fixing a car, or canning

vegetables and have enough skills, income and energy to carry out

their projects successfully. Makers are politically conservative,

suspicious of new ideas, respectful of government authority and

organized labor, but resentful of government intrusion on individual

rights. They are unimpressed by material possessions other than



those with a practical or functional purpose such as tools, utility

vehicles, and fishing equipment. For example, Trade Union leaders,

Human activists may belong in this segment.

Survivors tend to be chronically poor, ill-educated, low skilled,

elderly and concerned about their health. Preoccupied with the

urgent needs of the present moment, they do not show a strong self-

orientation. Their chief concerns are security and safety. Survivors

are cautious consumers. They represent a very modest market for

most products and services but they are loyal to favorite brands. For

example, Retired employees, senior citizens can easily belong to this

segment.

b) Personality: When Marketers use personality variables to segment

the markets, they endow their products with brand personality that

corresponds to consumer personalities. For example, Raymond

advertises its fabrics with the tag „The Complete Man.‟

c) Social Class: It has a strong influence on the consumer preferences

and the products they buy or consume. For example, when buying

cars, clothing, home furnishings, leisure activities, reading habits

etc., Social class becomes the key factor. Many companies design

products and services for specific social classes. For example, TATA

Nano was introduced in the market as a One-Lakh Car that could be

affordable by middle and lower income groups.

4) Behavioral Segmentation or Consumer Response Segmentation:

In behavioral segmentation, buyers are divided into groups on the basis of

their knowledge or attitude towards the use of, or response to a product.

Some marketers believe that behavioral variables are the ideal primary

factors for creating market segments. Some of the behavioral factors are:

a) Occasions: According to the occasions, buyers develop a need,

purchase a product or use a product. It can help firms expand product

usage. A company can consider critical life events to see whether they

are accompanied by certain needs. For example, Tanishq a TATA

enterprise offers gold schemes and promotions for Akshaya Thrutiya

(auspicious day to purchase jewellery)



b) Benefits: Buyers can be classified according to the benefits they seek

from the products. For example, Peter England, a Madhura garment

brand positioned its wrinkle free trousers on the basis of benefits.

c) User Status: Markets can be segmented into non-users, potential

users, first time users and regular users of a product. Each market

segment requires a different marketing strategy. The company‟s market

position will also influence its focus. Market leaders will focus on

attracting potential users, whereas smaller firms will try to attract current

users away from the market leader. For example, Kishkinda resort near

Hampi classifies its customers according to this characteristic. Resort

believes that locals falls into non- user category, affluent class come to

Hampi as potential users, foreigners as first time users, rich people near

Hampi who frequently come there as regular users.

d) Usage Rate: Markets can be segmented into light, medium and heavy

product users. Heavy users are often a small percentage of the market

but account for a high percentage of total consumption. Marketers prefer

to attract one heavy user rather than several light users and so, they

vary their promotional efforts accordingly.

For example, Alan Paine textile brand, offered 4 cotton trousers for

Rs. 999. Here, the Company is interested in getting profits from sales

volume rather than its selling price.

e) Loyal Status: Consumers have varying degrees of loyalty to specific

brands, stores and other entities. Buyers can be divided into four groups

according to brand loyalty status.

a) Hard-core Loyals: Consumers who buy one brand all the time. For

example, customer may be using only BSNL cellular services though

there are different options available.

b) Split Loyals: Consumers who are loyal to two or three brands. For

example, consumer may go for tax savings schemes of post offices

and Life Insurance Corporation of India

c) Shifting Loyals: Consumers who shift from one brand to another.

For example, consumer who used Nokia cell phones starts buying

Sony- Ericsson mobiles.



d) Switchers: Consumers who show no loyalty to any brand. When

there is a low involvement and few significant perceived brand

differences consumer try to purchase different brands in the

category. For example, a customer who bought Cinthol wants to try

Medimix, Mysore Sandal, Himalaya, Santoor, Chandrika etc…

A company can identify its product‟s strengths by studying its Hard-core

Loyal. By studying its Split Loyal, the company can pinpoint which

brands are most competitive with its own. By looking at customers who

are shifting away from its brand, the company can learn about its

marketing weaknesses and attempt to correct them.

f) Buyer-Readiness Stage: A market consists of people in different

stages of readiness to buy a product. Some are unaware of the product,

some are aware, some are informed, some are interested, some desire

the product and some intend to buy. The relative number makes a big

difference in designing a marketing program. For example, People may

be aware of Aqua guard but don‟t know much about it.

Activity 2:

Identify the bases by which companies have segmented their markets for

these products (taking help from the television ads and other

advertisements): Nakshatra diamonds, Cinthol soaps, Domex toilet

cleaner and Parker pen.

7.7 Targeting

Targeting is defined as a group of people or organizations for which an

organization designs, implements and maintains the marketing mix.

Once the bases for segmentation are selected, the marketer has to identify

the people or organization to whom the product is meant. Organizations

may not differentiate their customer or it may have different customer for

different products. In the next section we will study how to identify the target

customers.

Selecting Target Market Segments

Depending upon the emerging patterns of market segmentation,

homogeneous preference (showing no natural segments as in case of soft



drinks sale by Pepsi and Coca-Cola), diffused preference (showing clear

preferences as in case of automobile market), and clustered preference

(market showing natural segments as in case of occupation having impact

on the types of clothes worn), a company chooses its market segmentation

strategy.

A) Undifferentiated Marketing: It is a market coverage strategy in which

the company treats the target market as one and does not consider that

there are market segments that exhibit uncommon needs. The company

focuses on the centre of the target market to get maximum advantage.

The feature of „one product-all segments‟ calls for presenting one

marketing-mix for the target market. For example, the Coca-Cola

Company sells Coke, Limca, Thums-up etc., and does not distinguish

the target audience.

B) Differentiated Marketing: It is a market coverage strategy in which the

company goes for proper market segmentation as depicted by its

analysis of the total market. The company, therefore, goes for several

products or several segment approach which calls for preparing different

marketing mixes for each of the market segment. This strategy is

followed by Hindustan Unilever Limited which sells different soaps (Life

Buoy, Lux, Rexona, Liril, Pears etc.) and each of them has its own

market. Thus, the company creates segments in the soap market and

not in toiletries market (including soaps, detergents, toothpaste, etc.)

C) Concentrated Marketing: It is a market coverage strategy in which

company follows „one product-one segment‟ principle. For example,

Ashok Leyland produces large chassis of machine which can be used

for buses and trucks. The manufacturer gets maximum knowledge about

the segment‟s needs and therefore acquires special reputation. This

strategy can also help small companies to stand against a large

corporation because small companies can create niches in its one-

product one-segment approach by providing maximum varieties.

Choosing a Market Coverage Strategy: The following table depicts an

overview of the three market coverage strategies: Table 7.1 provides a

snap-shot view.



Table 7.1: Comparison of Market Coverage Strategies

Focus Undifferentiated

Marketing Differentiating

Marketing Concentrated

Marketing

Product One/Few Many One/Few

Segment All Many One/Few

Marketing-Mix One Many One/Few

Given the comparison of different coverage strategies, it is easy to identify

the relevant strategies as shown in Table 7.2.

Table 7.2: Choosing a Market Coverage Strategy

Undifferentiated

Marketing

Differentiating

Marketing

Concentrated

Marketing

Constrained

Firm Resources More suitable Least suitable Most suitable

Common usage

Products Most suitable More suitable Least suitable

Different need

Satisfying products Least suitable Most suitable More suitable

Given the above table, the firm‟s resources and the product‟s requirement in

its present form (by all or few) would decide the choice of a particular

market- coverage strategy. Finally, the competitor‟s adaptation of a

particular strategy should be considered for deciding the company‟s own

strategy. For example, Coca-Cola starts segmenting soft drinks market and

targets family, Pepsi cannot ignore it because it would be suicidal for them

(segmentation would provide differentiation of products more easily).

7.8 Market Positioning

Each firm needs to develop a distinctive positioning for its market offering.

Positioning is the act of designing the company‟s offering and image to

occupy a distinctive place in the target market‟s mind. Many marketers

advocate promoting only one central benefit and Rosser Reeves called it as

“a unique selling proposition”. Some of the USPs includes “best quality”,

“best service”, “Lowest price”, “best value”, “safest”, “more advanced

technology” etc. If a company hammers away at one of these positioning



and delivers on it, it will probably be best known and recalled for its

strengths.

Not everyone agrees that single-benefit positioning is always best. Double-

benefit positioning may be necessary if two or more firms claim to be best

on the same attribute. There are even cases of successful triple-benefit

positioning.

As the companies increase the number of claims for their brand, they risk

disbelief and a loss of clear positioning. In general, a company must avoid

four major positioning errors.

1) Under positioning: Some companies discover that buyers have only a

vague idea of the brand. The brand is seen as just another entry in a

crowded marketplace.

2) Over-positioning: Buyers may have too narrow image of the brand.

3) Confused Positioning: Buyers might have a confused image of the

brand resulting from the company‟s too many claims or changing the

brand‟s positioning too frequently.

4) Doubtful Positioning: Buyers may find it hard to believe the brand

claims in view of the product‟s features, price or manufacturer.

Positioning maps:

Two dimensional graphs of how a product, brand or company is perceived

versus competition.

Before identifying the positioning strategies for the product, marketer

prepares its perceptual maps. These maps are drawn on important buying

dimensions of consumer for company products as well as competitor

products.

How to construct Position maps?

1. Evaluate the buying dimensions of customer

2. Select two buying dimensions of consumer; for example price and

quality.

3. Identify the relative market share: relative market share is the ratio of

company‟s market share to its largest competitors‟ share.

4. Draw the circles according to relative market share on two dimension

graph



Position map for Toilet soaps

Figure 7.3

Bases for positioning the product

Overcoming the positioning difficulties enables the company to solve the

marketing-mix problem. Thus seizing the “high-quality position” requires the

firm to produce high quality products, charge a high price, distribute through

high-class dealers and advertise in high-quality media vehicles.

The bases for positioning strategies are:

1. Attribute Positioning: A company positions itself on an attribute such

as size or number of years in existence. For example, Sunfeast

positions its snacky brand as bigger lighter and crisper. (Figure 7.5)



Figure 7.5 Figure 7.6

2. Benefit Positioning: The product is positioned as the leader in a certain

benefit.

Automotive: Hyundai Santro

Headline: India's best-loved family car is now also India's simplest car to

drive.

Subhead: Hyundai introduces Santro Zip plus Automatic.

No shifting gears, no clutch, no problems.

Baseline: The simplest car to drive. (Positioning)

3. Use or Application Positioning: Positioning the product as best for

some use and application. For Example, Kenstar positioned its product

as unexpectedly cold. (Figure 7.7)




4. User Positioning: Positioning the product as best for some user group.

In this advertisement (Figure 7.8) of Parle –G, the boy was positioned as

rock star. This advertisement basically targets the kids and boys.

5. Competitor Positioning: The product claims to be better in some way

than a particular competitor. In this advertisement (Figure 7.9)

Mathrubhumi base line says ‘In the wake of ABC results, Mathrubhumi

celebrates the addition of 33,960 copies while nearest competitor

laments the loss of 7,258 copies. Planners, take note‟. It is directly

mentioning its and competitor's newspaper sales figures.


6. Product Category Positioning: The product is positioned as the leader

in a certain product category. Bajaj CT 100 was positioned as leader in

the entry segment bikes. (Figure 7.10)

7. Quality or Price Positioning: The product is positioned as offering the

best value.

Figure 7.11



The vegetable oil brand Dhara positions itself as „anokhi shuddata, anokha

asar‟. This means, company offers unique purity and unique effect.

Activity 3:

Are you able to note down the targeting and positioning strategies of the

particular brand of shampoo (or soap) that you use. Suggest how your

shampoo (or soap) can be effectively positioned in the market so that

more people will buy it.

Self Assessment Questions

6. In _____________segmentation, buyers are divided into different

groups on the basis of life-style or personality and values.

7. By studying its _________________ a company can pinpoint which

brands are most competitive with its own.

8. _______________ is a market coverage strategy in which company

follows „one product-one segment‟ principle.

9. ______________ is the act of designing the company‟s offering and

image to occupy a distinctive place in the target market‟s mind.

10. __________ are consumers who buy one brand all the time.

7.9 Summary

Market Segmentation is the process of dividing a potential market into

distinct sub-markets that is, having consumers segments with common

needs and characteristics.

The size, profile and other relevant characteristics of the segment must

be measurable and obtainable in terms of data.

Target marketing helps the marketer to identify the markets – the group

of customers for whom the product is designed.

Buyers can be classified into four groups based on brand loyalty status:

o „Hard-core Loyals‟ are those consumers who buy one brand all the

time.

o „Split Loyals‟ is those consumers who are loyal to two or three

brands.



o „Shifting Loyals‟ are those consumers who shift from one brand to

another.

o „Switchers‟ are those consumers who show no loyalty to any brand.

Positioning is the act of designing the company‟s offering and image to

occupy a distinctive place in the target customers‟ mind.

List of Key terms

Segmentation

Target markets

Market positioning

Segmentation Bases

Differentiation

Concentrated Marketing

7.10 Terminal Questions

1. What do you mean by segmentation? What are its benefits?

2. Discuss the various bases for segmenting consumer markets.

3. Explain the methods of selecting target market segments.

4. Write a note on positioning of the product.

5. What are the requisites of effective segmentation?

7.11 Answers

Answers to Self Assessment Questions:

1. Market segmentation

2. Size

3. Differentiability

4. Yes

5. True

6. Psychographic

7. Split Loyals

8. Concentrated Marketing

9. Positioning

10. Hard-core Loyal



Answers to Terminal Questions:

1. Refer to 7.2 & 7.3

2. Refer to 7.6

3. Refer to 7.7

4. Refer to 7.8

5. Refer to 7.4

7.12 Mini-Case

Business profile of Dabur Foods Ltd.

"There are a lot of juicewalaas in city markets, so juice is not

something Indian consumers had not seen before. And, we felt if we

give them juices in a packaged form, which is more hygienic, it should

do well" – Amit Burman, CEO, Dabur Food Ltd.

Dabur has launched Dabur Amla Flower magic hair oil. It is targeted at

college-going girls. It contains Amla and the scents of white flowers

such rajnigandha, mogra and jasmine. It costs Rs. 38 for a 100 ml pack

and Rs. 20 for a 50 ml pack - Brand line, The Hindu November 19th 2009

Dabur India Ltd (Dabur India), a part of the Dabur Group, was

incorporated in 1975 for manufacturing and marketing FMCG, ayurvedic and

pharmaceutical products. The pharmaceutical division of the company was

demerged in 2003. In Apr 2006, three entities, Balsara Hygiene Products

Ltd, Balsara Home Products Ltd and Best Cosmetics Ltd were merged with

Dabur India.

Business Profile: Dabur India operates with four divisions namely, consumer

care, consumer healthcare, foods and international business division. The

consumer care caters to six FMCG segments of hair care, oral care, health

supplements, digestives, home care and skin and baby care. Some of its

major brands include, Vatika, Meswak, Hajmola, Babool and Odomos

among others. Consumer healthcare deals in ayurvedic products under the

brands Honitus, Nature Care and Shankpushpi among others. Dabur India

operates its food business through Dabur Foods Ltd that offers juices,

nectars, drinks and food additives under the brand names Real, Active and

Coolers among others.



Here is an extract of the interview:

In Brand Speak, Amit Burman, Chief Executive Officer, Dabur Foods Ltd.,

speaks to exchange4media's Nikhil Gupta, on its brand strategy, psyche

of Indian housewife and buying patterns in the processed food category.

Q. How is your brand 'Real' fruit juice doing in the market?

A. We launched it in the year 1999, and over the years it has shown us

very good growth. From last year to this year, it grew at about 30%. I

believe its good growth but then we are starting from a very small

base, for a category, which is at a very nascent stage as compared to

its potential today.

Q. What kind of background research you had done before

launching your products – 'Real' fruit juice and 'Homemade'

cooking pastes?

A. When we launched 'Real', we didn't do much of market research, as

we clearly saw there was a gap in the market. And looking at the

Indian consumers, and there are so many juicewalahas in the market,

so juice was not something Indian consumers had not seen before.

So, we felt if we give them juices in a packaged form, which is more

hygienic, it should do well. In other categories, 'yes,' before launching

'Homemade,' we did a lot of research. What we found was that in a

typical Indian household, cooking as an activity could be split to two

parts. One is the negative activity, which involves preparation of right

mix of spices and pastes for the food. The other one being the

positive activity, which consists of what an Indian housewife ads on

top which makes the final food different in your house than my house.

That is where she gets the pride from serving guests, husband, her

family, that's something she doesn't wants to loose. So, we decided

rather than if we focus on the positive labour, we would be taking

away this feeling of pride from her, so we focused on the negative

labour, where ginger paste from my house and your house is crushed

the same way, garlic paste in my house and your house is crushed

the same way. So, we are focusing on what is around the main meal

and we are not focusing on the main meal.



Q. How did the market react to 'Homemade' pastes?

A. Most of the products that we have launched actually try to create a

category. Even today there is no national level player except us

present in the market.

Q. How fast is the 'Homemade' range growing sales wise?

A. Sales are not growing that fast. In India, there is an inherent problem

in the processed food category; they compare the commodity with the

market prices. If they were to go out and buy 200g of ginger, it should

be equal to so many grams of paste. They don't look at the

processing part, that processing is free in their minds. Similarly, what

happens is when the commodity prices are going high our product

starts selling more. Also, what we have seen is that a housewife

usually keeps a bottle of Ginger paste of a garlic paste in the

refrigerator and it‟s only used as an emergency. But in regular use,

that is something we are trying to create, it should be a regular use

item.

Q. What is the USP of Homemade?

A. The USP as I explained, one insight that we got from the consumer,

that the taste of spices grinded on Silbatta (grinding stone) is different

from the taste we get from the mixer. We incorporated that in our

manufacturing process, we actually use stone grinding to give the

same taste to the consumers. We also ran an ad campaign, which

has a tagline, saying, "Homemade Ka Paste, Swad Silbatte Wala."

Q. Going further, how do you maintain a check at the retailers level

that the products are being displayed properly at the point-of-

purchase (pop) since the bottles are usually not clean, which

creates a perception that it might be very old?

A. See, the manufacturing date is printed over there, but in terms of

cleaning the bottles and all, when our sales officers visit the stores;

his first job is to check that the products are displayed properly and

the bottles are kept clean.

Q. Just exploring one thought, wont it be better if the "Homemade"

pastes are delivered to the housewife at home, since a lot many



times she would feel awkward picking it up from the shop

shelves?

A. That's a good suggestion, but rather shying away from sending it to

their house; we have to build a brand to tell that consumer that it as

good as fresh. It‟s an inherent problem; people in India will never

agree that something that is packaged is fresh. Thus, the onus is on

every player in the processed food industry to change the perception

to- whatever is on the shelf is fresh.

Q. Going back to 'Real' fruit juice. Who is the typical target

consumer? And are you trying to compete with Softy Drinks as

category?

A. In 'Real', we have two range of juices one is Real fruit juice other is

Real Active juice. The Real fruit juice is targeted towards the

housewife and kids, and the Real Active juice is targeted towards the

young adults between the ages of 24 to 35. We are very clearly

focused on the in-home segment and soft drink is more out- of- home

impulse purchase.

Q. How do you maintain the balance in availability of product on the

counter as well as the freshness of the product?

A. I think it has been a learning experience, in terms of distribution.

Very clearly, in processed foods as a category, the date of

manufacturing is very critical to the consumer. So, we worked on our

products, and now our products are about 35 days from date of

manufacture.

(Source: www.exchange4media.com)

A MBA student after reading the above business profile of Dabur Foods

Ltd., and the excerpts from the interview wants to identify the bases for

segmenting consumer markets for Dabur‟s different products. She needs

help in knowing the strategies that were adopted by Dabur in targeting these

segments and how products were positioned in the Indian market. She is

also curious to know the global opportunities that Dabur may have with its

variety of products.

Documents

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