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.)