1. CHAPTER - 7 Market Segmentation, Targeting and Positioning

2. STEPS IN MARKET SEGMENTATION, TARGETING AND POSITIONING
Identify bases for segmenting the market
Develop segment profiles
Target Marketing
Develop measure of segment attractiveness
Select target segments
Market Positioning
Develop positioning for target segments
Develop a marketing mix for each segment

3. MARKET SEGMENTATION
Dividing a market into smaller groups of buyers on the basis of needs, characteristics or behavior who might require separate products or marketing mixes.

4. SEGMENTING CONSUMER MARKETS
Major segmentation variables
Geographic segmentation
Behavioral segmentation
Demographic segmentation
Psychographic segmentation

5. Geographic segmentation
Dividing a market into different geographical units.
Country
City
Density (Urban, suburban, rural)
Climate (Northern, Southern)

6. Demographic segmentation
Dividing the market into groups based on demographic variables.
Age
Gender
Family life cycle
Income
Occupation
Religion

7. Psychographic segmentation
Dividing the market into groups based on social class, lifestyle and personality.
Social class
Lifestyle
Personality

8. Behavioral segmentation
Dividing the market into groups based on consumer knowledge, attitude, use or response to a product.
Occasions
Benefits
User status
Usage rate
Loyalty status

9. SEGMENTING BUSINESS MARKETS
Major segmentation variables
Demographics
Industry
Company size
Locations
Operating variables
Technology
User-nonuser status
Customer capabilities

10. Purchasing approaches Personal characteristics
Purchasing function organization
Power structure
Nature of existing relationships
General purchase policies
Purchasing criteria
Situational factors
Urgency
Specific applications
Size of order
Personal characteristics
Buyer-seller similarity
Attitudes toward risks
Loyalty

11. SEGMENTING INTERNATIONAL MARKET
Major segmentation variables
Geographic location
Economic factors
Political and legal factors
Cultural factors

12. TARGET MARKETING
The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.

13. EVALUATING MARKET SEGMENTS
Segment size and growth
Major structural factors affecting segment attractiveness
Competitors
Substitute products
Power of buyers
Powerful sellers
Company objectives and resources

14. SELECTING MARKET SEGMENTS
Target marketing strategies / Market coverage strategies / Levels of market segments :
Undifferentiated (Mass) marketing
Differentiated (Segmented) marketing
Concentrated (Niche) marketing
Micro-
Marketing
Targeting broadly
Targeting narrowly

15. Undifferentiated (mass) marketing
A market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.
Company Marketing Mix
Market

16. Differentiated (segmented) marketing
A market coverage strategy in which a firm decides to target several market segments and design separate offers for each.
Company Marketing Mix 1
Segment 1
Company Marketing Mix 2
Segment 2
Company Marketing Mix 3
Segment 3

17. Benefits of segment marketing over mass marketing –
The company can market more efficiently toward the consumers that it can serve best and most profitably.
The company can market effectively by fine-tuning its marketing mixes to the needs of carefully defined segments.
The company may face fewer competitors.

18. Concentrated (niche) marketing
A market coverage strategy in which a firm goes after a large share of one or a few submarkets with distinctive traits that may seek a special combination of benefits.
Company Marketing Mix
Segment 1
Segment 2
Segment 3

19. Benefits of niche marketing over mass/segment marketing:
Niches are Smaller and normally attract only one or a few competitors.
Marketers understand their consumers’ needs so well that their customers willingly pay a price premium.
It offers smaller companies an opportunity to compete by focusing their limited resources on serving niches that may be unimportant to or overlooked by larger competitors.

20. Micromarketing
A market coverage strategy in which a firm tailors its products and marketing programs to suit the tastes of specific individuals and locations.
Micromarketing includes –
Local marketing - Cities, neighborhoods and specific stores
Individual marketing – Mass customization

21. Choosing a market-coverage strategy
Company resources
Product variability
Product’s life-cycle stage
Market variability
Competitor’s marketing strategies

22. POSITIONING FOR COMPETITIVE ADVANTAGE
Market positioning is the process of arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers. A product’s position is the way the product is defined by consumers on important attributes – the place the product occupies in consumers’ minds relative to competing products.

23. CHOOSING A POSITIONING STRATEGY (3 steps)
Identifying possible competitive advantages :
Competitive advantage is an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices.

24. Positioning on specific product features
The most common basis for constructing a product positioning strategy are –
Positioning on specific product features
Positioning on specific benefits, needs or solution
Positioning on specific use categories
Positioning on specific usage occasions
Positioning on a reason to choose an offering over the competition
Positioning against another product
Positioning by cultural symbols

25. 2. Choosing the right competitive advantages :
How many differences to promote?
Which differences to promote?
The differences must have the following criteria -
Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable

26. 3. Selecting an overall positioning strategy :
Price
More
The same
Less
More
More for more
More for the same
More for less
Benefits
The same
The same for less
Less
Less for much less