Subject : Apparel Marketing

Unit 4: Positioning and strategies of positioning

Quadrant 1 – E-Text

Learning Objectives

The learning objectives of this unit are to:

Define Segmentation, Targeting, Positioning.

Understand bases of Fashion Consumer Segmentation.

Ascertain how to arrive at their target customers.

Define the concept of Positioning and strategies of positioning.

Apply the concepts above and identify Segments for a An Apparel Store or Brand.

4.1 Definition of Segmentation, Targeting and Positioning

The world market has nearly 7 billion customers, and they differ in many ways. But as

marketers, we have to arrive at a common ground on which they can be brought together and

classified, so that we can offer and serve the needs and wants better. Thus, the need for

segmentation. The levels of marketing segmentation starts from mass marketing and goes as

segment marketing, niche marketing and finally, micro-marketing. In mass marketing, a fashion

marketer has to mass produce, mass distribute, and mass promote products to all customers in the

same way.

Though a company might save a lot of money, time and energy, in the present scenario, with

today’s enlightened customers, it will not work. Hence, the need for segment marketing and

targeting.

Key Definitions

Segmentation

Dividing a market into distinct groups of buyers with different needs, characteristics, on behavior

who might require separate products or marketing mixes.

Targeting

The process of evaluating each market segments attractiveness and selecting one or more

segments to enter.

Market Positioning

Formulating competitive positioning in the minds of customers for a product and a detailed

marketing mix.

Steps in Market Segmentation, Targeting, Positioning

Philip Kotler and Gary Armstrong have recognised 6 steps in market segmentation, targeting and

positioning. Identify bases for segmenting the market. Develop profiles of resulting segments.

Develop measures of segment attractiveness. Select the target segments. Develop Positioning for

each target. Develop marketing mix for each target segment.

4.2 Bases of Segmentation

A market can be broadly classified as: Geographic, Demographic, Psychographic and

Behavioral.

Geographic

Geographic

World Region or Country North America, Western Europe, Middle East, Pacific Rim,

China, India

Country region North, South, East, West, North East

City or Metro Size Under 1,00,000, Between 1 – 5 Lakhs, Between 10 – 50

Lakhs, 50 – 100 Lakhs.

Density Urban, Suburban, Rural

Climate Northern, Southern

World Region or Country

Examples of a geographic basis of classification on the basis of world region or country, includes

North America, China, India, etc.,

Country Region

Examples of a geographic basis of classification on the basis of country region are: North, South,

East, West, North East etc.,

City or Metro Size

Examples of a classification done on the basis of city or metro size are:

Under 1,00,000, Between 1 – 5 Lakhs, Between 10 – 50 Lakhs, 50 – 100 Lakhs.

Density

Examples of a classification done on the basis of density are:

Urban, Suburban, Rural.

Climate

Examples of a classification done on the basis of climate are: Northern and Southern.

Demographic

A demographic basis of classification can be done on the basis of: Age, Gender, Family size,

Family Life Cycle, Income, Occupation, Education, Religion and Nationality.

Age

Examples of a classification done on the basis of age are: Under 1 year, 2 – 8 years, 9 – 12 years,

13 – 16 years, 16 – 22 years, 22 – 25 years, 25 – 30 years, etc.,

Gender

Examples of a classification done on the basis of gender are: Male, Female, Transgender.

Family Size

Examples of a classification done on the basis of family size are: 1 – 2 members, 3 – 4 members,

5 + members, etc.,

Family Life Cycle

Examples of a classification done on the basis of family life cycle are: Young, Single, Young

married, no children, Young, married with children, older, etc.,

Income

Examples of a classification done on the basis of income are: Under 50,000 per annum, 1 – 2

Lakhs per annum, 2 – 5 Lakhs per annum, etc.,

Occupation

Examples of a classification done on the basis of occupation are:

Professional, technical, managerial, doctors, designers, etc.,

Education

Examples of a classification done on the basis of education are: Illiterate, 10th pass, 10 + 2,

graduate, post graduate etc.,

Religion

Examples of a classification done on the basis of religion are: Hindu, Islamic, Christian, Sikhs,

Jains, etc.,

Nationality

Examples of a classification done on the basis of nationality are: North American, South

American, British, French etc.,

Psychological

A psychological basis of classification can be done on the basis of: Social Class, Life Cycle and

Personality.

Social Class

Examples of a classification done on the basis of social class are: Lawyer, Upper or Middle Class

etc.,

Life Style

Examples of a classification done on the basis of life style are: Achievers, strivers, strugglers

etc.,

Personality

Examples of a classification done on the basis of personality are: Compulsive, gregarious,

authoritarian, ambitious etc.,

Behavioural

A behavioural basis of classification can be done on the basis of: Occasional, Benefits, User

Status, Usage Rate, Usage Occasional, Attitude Towards the Product.

Occasional

Examples of a classification done on the basis of occasional are: Regular, special occasions etc.,

Benefits

Examples of a classification done on the basis of benefits are: Quality, service, economy,

convenience, speed etc.,

User Status

Examples of a classification done on the basis of user status are: Non user, ex user, potential

user, first user, regular user.

Usage Rate

Examples of a classification done on the basis of usage rate are: Light, medium, and heavy users.

Usage Occasional

Examples of a classification done on the basis of usage occasional are: Morning, evening, night,

bathing etc.,

Attitude Towards Product

Examples of a classification done on the basis of attitude toward the product are: Enthusiastic,

positive, indifferent, negative, hostile etc.,

4.3 How to Target

While evaluating the market segments, Fashion, marketers use: Segment size and growth.

Segment structural attractiveness. Company objectives and resources, while selecting the

lucrative segment to target.

After evaluating, the company must decide how many segments to serve. In the process, the

company may decide to adopt one of these market-covering strategies. Undifferentiated

marketing, Differentiated marketing, and Concentrated marketing.

The undifferentiated marketing strategy focuses on what is common in the needs of consumers.

It ignores differences, and goes with one offer to the entire market.

The differentiated marketing strategy, targets all segments, but designs separate marketing mix.

In the concentrate marketing strategy, the company targets one or few markets and tries to garner

a large share.

4.4 Positioning and Strategies of Positioning

“Positioning is not what you do to the product; it’s what you do to the mind of the prospect. It’s

how you differentiate your brand in the mind. Positioning compensates for our over-

communicated society by using an oversimplified message to cut through the clutter and get into

the mind.”

POSITIONINGTARGETING SEGMENTATION

- Al Ries

Basic Model of STP

Definition: Positioning is the perception of the brand’s or product’s key benefits and features,

relative to the offerings of competitive products in the mind of the target customer.

The overall positioning is created through the marketing mix of the brand. Positioning therefore

contributes to the creation of the brand identity.

The Importance of Positioning:

1. Communicating with the Customers: a clear positioning enables the marketing

communications team of the brand to deliver consistent marketing messages to the target

customer.

2. Differentiation: it enables the customers differentiate between the product offerings of

the brand compared to competing products.

3. Customer Loyalty: since the customer is able to appreciate and acknowledge the

differences in the product offerings by comparing key features, it leads to customer

loyalty and thereby sales.

4. Brand Equity: Greater customer loyalty, in turn results in higher brand equity, which not

only increases market share but also protects against competitive threat and reduces price

sensitivity.

1. By Product Attribute: Positioning focuses on one or two of the product’s best features/benefits. e.g. Colgate campaign - "Kya aapke toothpaste mein namak hai"

2. By User: Positioning focuses on the user "ideal target customer" and shows the product as a solution to his need or social prestige. e.g.Manikchand campaign - "Unche Log, Unchi Pasand" ; Bajaj Scooty Pep campaign - "Why should boys have all the fun?"

3. By Product Class: Positioning focuses on a leadership position in the overall market. e.g. In a soap-compares-itself-to-lotion, Palmolive dishwashing liquid claims that it softens hands while the user cleans the dishes.

4. Against Competition: Positioning focuses on implied or direct competition with a competitor. e.g. Sprite campaign - "Bujhaye sirf pyaas, baanki sab bakwas" (against Mountain Dew)

5. By Use/Application: Postitioning focuses on how the product is used by consumer, claiming that the product is the best solution for that particular task/use. e.g. Oral B campaign; Lifebuoy Campaign; Head & Shoulders Anti-dandruff shampoo campaign.

6. By Quality or Value: Postitioning focuses on the product's claim of either delivering high quality or high value compared to competitive products. e.g. Fevicol's campaign -"Yeh Fevicol ka mazboot zor hai, Tootega nahi"

5. Avoid Cannibalization: it enables brands following a multi-brand strategy to leverage

market opportunities without the risk of cannibalization as the customers are able to see

the specific differences in the multiple product offerings in the same category rather than

have a general approach towards the category itself.

The main objective of positioning is to achieve a high product or brand recall with the target

group while purchasing. Hence, it must perform the following tasks:

It should be able to Highlight the company’s product features compared to competition.

It should be able to Acknowledge key consumer evaluation parameters for different products

categories.

It should be able to Communicate the claims of the products in terms of benefits or attributes or

value.

In order to effectively perform the above tasks, a positioning statement must have the following

features:

It should communicate one consistent primary message. The message should have resonance

with the target group in terms of relevance and importance. The differentiation claimed should

be sustainable over a longer period of time to safeguard against competition. It should be

credible enough to inspire trust and belief in the target market.

The Major Positioning Strategies

Note: The brands can, however, choose a combination of these different positioning categories

to create their positioning statement.

The creation of positioning:

In today’s world of media proliferation and greater consumer access to information through

evolved technology, the consumer is constantly forming an image of the brand/product through

various touch-points.

The cumulative perception of all the information sources results in the company’s image in the

mind of the target group.

INFORMATION

SOURCE

WHY THIS IS A POSITIONING INFORMATION

SOURCE

IMC mix The firm’s communications mix has a big role to play as it

usually focuses on particular benefits and advantages of the

product.

Competitor claims Positioning is viewed on a relative basis, therefore the

competitors’ IMC mix (product claims) will also affect the

positioning of all products.

Product features The actual design and features of the product, particularly when

consumers use the product, has a major impact on the

perception of the product and its relative advantages.

Packaging One of the first experiences the consumer has the product is the

look and feel of the packaging.

Word-of-mouth Word-of-mouth communication between consumers has a high

level of credibility and cut through and will greatly influence

positioning.

Media, reviews Media discussion/articles or product reviews are also seen as

quite credible and independent and will influence consumers’

perception.

Retailer mix The type of retailers where the product is sold gives an

indication of the product’s quality and status.

Pricing The overall price points of the product act as a cue for quality,

and a high frequency of sales promotions may suggest lower

quality.

Source: ©2012 Market Segmentation Study Guide

The concept of repositioning

Repositioning is the task of implementing a major change in the target market’s perception of the

product’s key benefits and features, relative to the offerings of competitive products. In order to

create a successful repositioning statement, the firm has to change the target consumer’s

understanding of the brand or product.

Following are the key reasons for which firms consider re-positioning:

Decline in the relevance of existing benefits due to change in consumer lifestyle or needs.

Emergence of new competitive threat requiring the brand to move to a less competitive zone.

Incorrect initial positioning in terms of either Under-positioning or Over-positioning. Change in

the macro-environment requiring the firm to adopt a new positioning to stay competitive and

relevant in the market. Significant improvements in the existing product which requires the firm

to adopt a new position in order to communicate to the customers about the new benefits.

The concept of perceptual map

“Perceptual maps measure the way products are positioned in the minds of consumers and

show these perceptions on a graph whose axes are formed by product attributes.” (Kardes,

Cronley, & Cline, 2011).

“A perceptual map represents customer perceptions and preferences spatially by means of a

visual display” (Ferrell & Hartline, 2008).

Example of Perpetual Map

A perceptual map or positioning map is a tool that visually attempts to map the consumer’s

perceptions and understandings of the competitive products and their respective positioning in

the market. The most common presentation format for a perceptual map is to use two

determinant attributes as the X and Y axes of a graph.

Points-of-parity (POP) and Points-of-difference (POD)

While deciding a brand’s/product’s positioning in the market, the firm should ensure that

sufficient points-of-parity (POP) and points-of-difference (POD) are incorporated in the

positioning statement. The brand/product must be considered as having equal/similar (on par

with) key attributes or benefits as offered by the major offerings in the category (POP), but the

brand/product also needs to distinctive and differentiated from competitive products by having

unique attributes (POD).

However, a balance needs to be maintained between POP and POD because if there is too much

dependence on POP, the product might get into the trap of being perceived as a ‘me-too’ product

while too less reliance on points-of-parity might result in the consumer perceiving that the

product does not meet the basic needs of the consumers.

Points-of-difference (POD) The aspects of the product offering that are relatively distinct to the offerings of like competitors.

Points-of-parity (POP)

The aspects of the product offering that are largely similar to the offerings of like competitors.

Note: Both the definitions are with reference to the offerings of competitors and hence are

relative in nature. The word ‘aspects’ refers to the various product features, benefits and various

other aspects of marketing mix.

4.5 Identification of Segment of an Apparel Store or Brand

The domestic apparel market, which was worth INR 207,400 crore (~USD 38 billion) as of 2012,

is expected to grow at a compound average growth rate (CAGR) of 9% over the next decade.

The Indian Apparel Industry contributes about 14 percent to industrial production, 4 percent to

the GDP, and 17 percent to the country’s export earnings. It provides direct employment to over

35 million people. The use of segmentation enables the retailers to identify the target customers.

Retailers or Brands primarily focus on gender, age, occasion, income and lifestyle aspects while

segmenting their markets. This also allows them to differentiate their offerings compared to

competition and create USP for their Store or Brand.

Key Segments in an Apparel Store

The key segments used in the apparel store are: Gender-Related, Age-Related, Occasion-Related,

Price/Income-Related, Channel-Related.

Gender Related Segments

Menswear Segment

With a market size of INR 87,500 crore (USD 16 billion) in 2012, menswear is the largest

segment in India’s apparel market, accounting for 42% of the overall market. In comparison,

women’s wear makes up 38%, while kid’s wear comprises 20%, of the market. The menswear

market is expected to grow at a CAGR of 8.5% to reach INR 1, 31,000 crore (USD 24 billion) by

2017. (Source: Technopak)

The menswear market is expected to grow at a CAGR of 8.5% to reach INR 1, 31,000 crore

(USD 24 billion) by 2017. (Source: Technopak)

Menswear – Key Product Categories

Denim, active-wear and T-shirts are high growth categories within menswear segment with

CAGRs of 16%, 14% and 12% respectively. The acceptance of casual or ‘Friday’ dressing and

the availability of denim in Tier II and Tier III cities and rural India are contributing to the

growth of the category. The shift from formal attire to comfort-oriented casual attire is driving

the market for men’s T-shirts alongside the demand for denim.

Consumer Trends

The Indian male today, wants to experiment with innovative colours and silhouettes. There is an

increase in the demand for coloured bottom-wear with newer colours like red, green, orange, etc.

being accepted. There is also growth in the premium tailoring segment comprising of the fashion

designers and the bespoke / luxury segment. Customers in the super premium segment are

willing to pay a premium to ensure that their clothing is distinctive and indicative of their social

position.

Key brands in the menswear segment include: Louis Philippe, Allen Solly, Park Avenue, Zodiac,

Colour Plus.

The Women’s Wear Segment

The INR 78, 500 crore (USD 14.4 billion) worth women’s wear market contributes 38% of the

total apparel market of India. The growth of this market is more rapid than the menswear market.

With the relatively lower penetration of brands, and the growing disposable income of modern

women, this segment has become the focus of many Indian and international brands.

Indian ethnic wear, which includes sari, salwaar-kameez, and blouse, is the biggest category

within the segment with a 75% share of the entire women’s wear market. The market is expected

to grow at a CAGR of 9% to reach a figure of INR 121, 400 crore (USD 22.3 billion) by 2017.

High Growth Categories

Denim, innerwear, and tops/shirts/T-shirts are the high growth categories indicative of greater

penetration and acceptance of western clothing among Indian women. Denim is growing at

CAGR of 17%, women’s innerwear at 14%, and tops/shirts/T-shirts at 11%. Denim is

penetrating deeper among women in the metros and mini metros, especially among the younger

generation.

Consumer Trends

The trends of women’s empowerment and higher education, is leading towards greater

absorption of women in the workforce. This in turn is resulting in the demand for women’s

western wear. The working women in the metros and mini metros are accepting dresses, formal

suits, and business attire as a part of their corporate wardrobes.

Key Brands

Some key brands in the women’s wear segment include: Allen Solly, W, Biba, Vero Moda,

United Colours of Benetton (UCB).

Age Related Segments

According to the India Apparel Report, 2008 (Images Year Book, Vol IV), the size of kid’s wear

market is estimated to be at Rs. 30, 510 crore and expected to grow to Rs 58,000 crore by 2014.

Age is a distinguishing factor that helps apparel retailers to effectively target their prospective

customer groups. Many clothing manufacturers target teenage girls with their trendy new fashion

lines. Children's clothing retailers may also sell related items that appeal to children and their

parents. With the increase in exposure through TV channels, video games, internet etc., and the

influence of superheroes, cartoon characters and peer influence; children are becoming aware of

key fashion trends. The pester power of children in influencing parents to make purchase

decisions is being increasingly targeted by the marketers.

Here are the key age related market classification.

Infants (0 - 6 months)

Toddlers (7 months - 2 years)

Kids (3 - 8 Years)

Pre-teens (9 - 12 Years)

Teens (13-16 Years)

Mothercare, Catmoss, Disney, Lilliput and Gini & Jony are some of the key brands in the kids

wear segment.

Occasion Related Segments

The demand for occasion-specific clothing is rising within the menswear segment. For example,

active-wear at the gym in the morning; formal shirts, trousers, and suits during office hours;

smart casuals in the evening; and sleepwear at night. The demand for ethnic dressing at special

occasions like marriages and social functions is also a distinct trend. Further, the trend towards

focusing on healthy lifestyle while maintaining the fashion quotient of the wearer is leading to

the growth of fashionable sportswear, yoga wear etc., Retailers are leveraging this, fashion-

meets-fitness clothing requirement of the customer.

Formalwear

Formal wear refers to clothing suitable for formal social occasions, such as corporate / formal

meetings. Brands famous in the formal wear category are: Louis Philippe, Raymond’s and

Blackberrys.

Casualwear

Casual wear refers to clothing which emphasizes comfort and personal expression and is worn

for informal occasions. It gives the overall feel of “dressing down”, being relaxed and at ease.

Brands famous in the casual wear category are: Guess, FCUK, Calvin Klein and Banana

Republic.

Partywear / Clubwear

Clubwear is clothing that is worn to nightclubs or parties. It comprises of extremely stylish and

sensual garments. Brands famous in the party wear category are: Zod, V. and Provogue.

Active Wear

Active wear is sportswear that meets modern day sporting, fitness and fashion requirements.

Active wear uses the latest performance fabrics and technologies for meeting sporting and gym

based activities. These garments can be worn for various sports and are also stylish. Brands

famous in the active wear category are: Nike, Adidas, H&M and Uniqlo.

Price / Income Related Segments

Price and income related segments can be into discount stores or economy brands, mid-premium

stores and brands, premium and super-premium stores and brands, and Luxury stores and brands.

Discount Stores or Economy Brands

These retailers target the lower middle class to economy customers. Customers are motived to

purchase by deals and discounts.

It is a volume driven business with basic focus on product quality. Examples of this segment are

Big Bazaar, Easy Day, and Local stores.

Mid Premium Stores / Brands

These stores / brands target the middle class customers with value for money products. There is

focus on offering quality products at competitive prices. For example, Peter England and

Megamart.

Premium / Super Premium Stores / Brands

These stores are generally operated by major business houses or multi-national oganizations.

They offer extremely differentiated and high quality and high price products in keeping with

current fashion trends. They target the SEC A consumers with significant disposable income. For

example, Tommy Hilfiger, Polo Ralph Lauren and Diesel.

Luxury Stores / Brands

The growth of the Indian luxury market is driven by an increasing base of ultra-high net worth

households. These stores offer most elite and bespoke products and services and are targeted to

customers who are discerning spenders and appreciate fine luxury goods. For example: Chanel,

Prada and Gucci.

Luxury stores can be broadly be classified into two categories. Store based and non-store based.

Store Based

The Store Based segment can be further classified into: EBO (Exclusive Brand Outlet)

and MBO (Multi-Brand Outlet).

EBO (Exclusive Brand Outlet)

Exclusive Brand Outlets are stores that sell a single brand from the oulet.

For example, Reebok, Titan, Puma etc.

The benefits of an EBO or Mono-brand outlet is that the exclusive status leads to greater brand

equity among customers.

The retailer gets better margins as well better control on marketing mix and customer service.

MBO (Multi-Brand Outlet)

Multi-brand retail or Department stores are outlets where multiple brands are sold under one

roof. he major advantage of a MBO format is that it generates more footfalls because the

customer gets wider choice is. For example, Shopper’s Stop, Lifestyle, Big Bazaar, Central etc.

Non-store Based

The Non-Store Based segment can be further classified into: E-commerce and Catalogue

retailing.

E-commerce

Merchandise is sold through on-line portals. The customer gets access to wide range of choices,

has sufficient information to compare prices and can shop from the comfort of his home or

office. For example, Myntra.com, Fashion & You.com etc.

Catalogue Retailing

Catalogue retailing is a form of non-store retail format where the retail offering is communicated

through a catalogue to the consumers. However, such formats usually work better in combination

with a physical store format.

For example, HyperCity Argos (HyperCity Retail India Ltd, along with Shopper's Stop Ltd,

entered into a franchise agreement with Home Retail Group, UK, to offer a unique multi-channel

shopping experience to its customers.)

4.6 Conclusion

To summarize, in this unit you have learnt to differentiate various market segments. This will

help you to effectively identify and target potential customers.