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Segmentation, Targeting andPositioning

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Steps in Market Segmentation,

Targeting,and Positioning

1. Identify

segmentation

variables andsegment the

market

2. Developprofiles of

resulting

segments

MarketSegmentation

3. Evaluate

attractiveness

of each

segment

4. Select the

targetsegment(s)

MarketTargeting

5. Identifypossible

positioningconcepts foreach target

segment

6. Select,develop, andcommunicate

the chosenpositioning

concept

MarketPositioning

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Why Segmentation ?

Not all buyers alike

Subgroups may be identified

Subgroups smaller and morehomogeneous

Easier to satisfy smaller groups

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How to Segment & Target?

1.

Breakmarketdown

2.

Groupintosegments

TARGET MARKET

3.

Choosetargetmarket

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Bases for Segmenting Consumer Markets

Occasions, Benefits,Uses, or Attitudes

Behavioral

Geographic

Region, City or MetroSize, Density, Climate Demographic

Age, Gender, Family size

and Life cycle, Race,Occupation, or Income ...

Lifestyle or PersonalityPsychographic

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Bases for Segmentation

Geographic

World Region or Country North america, Middle East, Western Europe, India, China

Country Region Northern India, Southern India, Eastern India, Western India

Density Urban, Rural, Suburban

City Size under 5000, 5000-20000, 20000-50000,50000-100000.

Demographic

Age under 6, 6-12, 13-19, 20-30, 30-45, 45-60, 60 and above

Gender Male, Female

Family Size 1-2, 2-4, 5+

Family Life Cycle Young single, young married no children, young married with children

Income under Rs.100000, 100000-300000, 300000-500000, 500000+

Occupation Professional, Technical, Officials, Self Employed, Unemployed

Education Literacy rate

Religion Hindu, Muslim, Sikkha, Christen

Generation Baby Boomers, Generation X, Generation Y

Nationality Indian, Japanese, American, French, German

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Bases for Segmentation

Life Style Extravagent, Rattional, Economic

Personality Extrovert, Introvert, Ambiovert

Behavioural

Occasions Regular, Special Occasion

Benefits Quality, Service, Economy, ConvenienceUser Status Non user, Ex user, Potential user, First time user, Regular user

User Rate Light user, Medium user, High user

Loyalty Status None, Medium, Strong

Radiness Stage Unaware, Aware, Interested, Desirous, Intending to buy

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Market Targeting

1. Evaluating Market Segment

Segment Size and Growth

Segment Structural Attractiveness

Company Objectives & Resources

2. Selecting Target Segment

3. Targeting Strategies

-Standardization

-Differentiation

-Focus

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Five Patterns of Target Market

SelectionSingle-segmentconcentration

Productspecialization

M1 M2 M3P1

P2P3

Selectivespecialization

M1 M2 M3

P1

P2P3

M1 M2 M3

Full marketcoverage

P1

P2

P3

Marketspecialization

M1 M2 M3P1

P2

P3

P1

P2P3

M1 M2 M3

P = ProductM = Market

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Choosing a Positioning

Strategy

Products Position - the way the product isdefined by consumers on important

attributes - the place the product occupiesin consumers minds relative to competingproducts.

Marketers must:

Plan positions to give their products thegreatest advantage in selected target markets,

Design marketing mixes to create theseplanned positions.

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Positioning

Positioning is an act of creating an imageof the product in the minds of customers.

Positioning involves the brands unique

benefits and differentiations in customersmind.

Ex: ComplanA complete planned food

VideoconIndian Multinational

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ServicesDifferentiation

i.e. Delivery, Installation,Repair Services, Customer

Training Services

ProductDifferentiationi.e. Features,

Performance, Style &Design, or Attributes

Image

Differentiationi.e. Symbols,

Atmospheres, Events

Personnel

Differentiationi.e. Hiring, TrainingBetter People Than

Competitors Do

Positioning StrategyIdentifying Possible Competitive Advantages

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Product Differentiation

Form

Fea-

tures

Perfor-

mance Quality

Dura-

bility

Relia-

bility

Repair-

abilityStyle Design

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Product Differentiation Form: size, shape or physical structure

Ex. Sony Handicam, Product of Asian sky shop

Features: These are the characteristics that supplements the productbasic functioning

Ex: Mobile phones with blue tooth, touch screen, recorder

Performance : Buyers will pay more for the better performance

Ex: Quick service offered in 5 star hotels

QualityEx: Mac DonaldsBurger, Barista Coffee, Surf Excel Powder

Durability

Reliability Ex: Godrej Almirah

Reparabilityeasy to repair

Style How well the product looks and feels to the customerEx: Parker Pens, Ray Ban Sun glasses,

Design Is the totality of features that affect how a product looks andworks in terms of customer requirements ( Pleasing look, easy to open,operate to repair, )

Ex: Gillette in electric shavers

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DeliveryEx: Home Delivery,Dominos

Services Differentiation

Ordering

Ease

Ex. Telephoneordering,

Internet

Maintenance

& RepairEx: LG

Samsung

Customer

TrainingEx: SPSS,

Data base

software

InstallationEx. Reliance

WLL phones,Airtel,

Tata Sky

Customer

ConsultingEx. Investment

Companies

Miscellaneo

us

Services

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Companies can gain a strong competitive advantage

through having better trained people. Trained

personnel exhibits following characteristics

Competence possess the required skills &

knowledge

Courtesy Friendly, respectful

Credibility Trustworthy

Reliability perform the service consistently and

accurately

Responsiveness respond quickly to the customers

problem

Communication make an effort to understand the

customer and communicate clearly

PERSONNEL Differentiation

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Channel Differentiation

Coverage

Expertise

Performance

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Media Atmosphere

Symbols

Events

Image Differentiation

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Differences Worth

Establishing

ffordable Superior

Profitable

Preemptive

Distinctive

Important

Which Differences to Promote

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Distinctive: Company can offer better than competitors

Superior: Customer might not obtain the same benefit

elsewhere

Profitable: Introduce the difference with profit

Preemptive: Competitors can not imitate the difference

easilyAffordable: Buyers can afford to pay for the difference

Communicable: The difference is communicable and

visible to the buyers

Important The difference delivers a highly valued benefit

to the target buyers

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Perceptual Map Stylish, Prestigious

Practical, Economical

Conservative,

OlderSporty,

Fast

Rolls Royce

Maruti Alto

BalenoAmbassador

Mercedes

Honda Accord

Ferrari

Maruti Omini

Swift

Palio