Targeting & Seg Positioning

Amity Business School

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Amity Business SchoolMBA Class of 2010, Semester I

Target Marketing

Mamta Mohan [email protected]


STP process• 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


Issues• What are the different levels of market

segmentation?

• How can the company divide a market into segments?

• How can a company choose a most attractive segment?

• What are the requirements for effective segmentation?


Market Segment

• A large identifiable group within a market with similar wants, purchasing power, geographical locations, buying attitudes


Levels of segments:

• Mass marketing

• Micromarketing; segments, niches, local areas, and individuals


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 specialization

• Sufficient size, profit and growth potential


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


Individualized Marketing

• When the firm deals with each customer on a one – to – one basis

• Customerization- When products are customized for the customer


Bases for Segmentation• Geographic –territory demarcations

• Demographic – age, family size, sex, income,education, religion, generation social class etc.

• Psychographic – lifestyle, personality, values

• Behavioral –decision roles, user status, usage, Occasions, benefits, rate, buyers readiness, loyalty status, Attitude


Segmenting by Income and Segmenting by Income and Expenditure PatternsExpenditure Patterns

– Engel’s Laws,Engel’s Laws, as family income increases:• A smaller percentage of expenditures go for food• The percentage spent on housing and household

operations and clothing remains constant• The percentage spent on other items (such as

recreation and education) increases.


• Psychographic Segmentation Psychographic Segmentation – Divides a population into groups that have

similar psychological characteristics, values, and lifestyles

– Lifestyle: people’s decisions about how to live their daily lives, including family, job, social, and consumer activities

– The most common method for developing psychographic profiles of a population is to conduct a large-scale survey

• AIO statements• VALS and VALS 2

“Values and Lifestyles”



• Using Psychographic Using Psychographic SegmentationSegmentation – Psychographic profiles

produce rich descriptions of potential target markets

– Greater detail aids in matching a company’s image and its offerings with the types of consumers who are likely purchasers.


Behavioral variables

• Occasions – birthdays, lunchtime, vacations• Benefits – eg. travel – business, vacation,

educational• User status – non users, ex users, first time

users, regular users, potential users• Usage rate – light, medium, heavy


• Loyalty status – diehards, shifters, switchers• Buyer Readiness – unaware – aware – informed

– interested – desire – intention to buy• Attitude – enthusiastic, positive, indifferent,

negative, hostile


• Brand LoyaltyBrand Loyalty– Segmenting consumers grouped according to the

strength of brand loyalty felt toward a product– Frequent flyer programs of airlines and many hotels


Criteria for segmentation

• Measurable

• Substantial

• Accessible

• Differentiable

• Actionable


The Market Segmentation Process

• Develop a Relevant Profile for each Segment

• Forecast Market Potential

• Forecast Probable Market Share

• Select Specific Market Segments


Market Targeting( strategies)

• Single segment concentration

• Selective specialisation

• Product specialisation

• Market specialisation

• Full Market coverage

• -undifferentiated marketing

• -differentiated marketing


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


Differentiated Marketing• A separate market offering for every

segment• Marketing programs for every segment

could be different• Pushes up costs at various levels,

necessitating sufficient volumes for viability

• Generates inter-segment rivalry


– Positioning:Positioning: a marketing strategy that emphasizes serving a specific market segment by achieving a certain position in buyers’ minds

• Attributes• Price/quality• Competitors• Application• Product user• Product class


– Positioning mapPositioning mapGraphic illustration that shows differences in consumers’ perceptions of competing products

– RepositionReposition Marketing strategy to change the position of its product in consumers’ minds relative to the positions of competing products


Hypothetical Competitive Positioning Map for Selected Retailers

Documents

Targeting & Seg Positioning