1. Market Segmentation, Targeting and Positioning By : Prof Sameer Kulkarni

2. The Starting Point Mass Marketing: The Seller engages in –
Mass marketing>mass production>mass distribution>and mass promotion
ONE PRODUCT FO ALL BUYERS.
It creates the largest potential market>leads to lower costs>lower prices>higher margins

3. Segment Marketing Role of Marketer
The marketer does not create the segments
The marketer identifies the segments and decide which one to target
The company can better design>price>disclose& deliver the product to satisfy the target market.

4. Benefits of Segmentation
Effective use of resources
Gain a focus
Create Value for a target market
Positioning

5. Steps in Market Segmentation, Targeting, and Positioning
1. Identify bases for
segmenting the market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Positioning
5. Develop positioning for
target segments
6. Develop a marketing
mix for each segment
Marketing Segmentation HOA Chapter 9

6. Step 1. Market Segmentation Levels of Market Segmentation
Mass Marketing
Same product to all consumers
(no segmentation, i. e. a commodity)
Segment Marketing
Different products to one or more segments
(some segmentation, i.e. Thumsup)
Through Market Segmentation, Companies Divide Large, Heterogeneous Markets into Smaller Segments that Can be Reached More Efficiently And Effectively With Products and Services That Match Their Unique Needs.
Marketing Segmentation HOA Chapter 9

7. Steps in Market Segmentation, Targeting, and Positioning
1. Identify
segmentation
variables and
segment the
market
2. Develop
profiles of
resulting
segments
Market
Segmentation
3. Evaluate
attractiveness
of each
segment
4. Select the
target
segment(s)
Market
Targeting
5. Identify
possible
positioning
concepts for
each target
segment
6. Select,
develop, and
communicate
the chosen
concept
Market
Positioning

8. Basic Market-Preference Patterns
(a) Homogeneous
preferences
Sweetness
Creaminess
(b) Diffused
preferences
Creaminess
Sweetness
(c) Clustered
preferences
Creaminess
Sweetness

9. Step 2. Market Segmentation Levels of Market Segmentation
Mass Marketing
Same product to all consumers
(no segmentation)
Segment Marketing
Different products to one or more segments
(some segmentation)
Step 2. Market Segmentation Levels of Market Segmentation
Niche Marketing
Different products to subgroups within segments
(more segmentation)
Micromarketing
Products to suit the tastes of individuals and locations
(complete segmentation)
Local Marketing
Tailoring brands/ promotions to local customer groups
Individual Marketing
Tailoring products/ programs to individual customers

10. Bases for Segmenting Consumer Markets
Geographic
Region, City or Metro
Size, Density, Climate
Demographic
Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ...
Lifestyle or Personality
Psychographic
Occasions, Benefits, Uses, or Attitudes
Behavioral

11. Step 3. Market Segmentation Geographic Segmentation
International
National
Regional/City
Marketing Segmentation HOA Chapter 9

12. Geographic Bases
Region
Density
Climate
Population

13. Step 4. Market Segmentation Bases for Segmenting Business Markets
Personal
Characteristics
Demographics
Bases
for Segmenting
Business
Markets
Operating
Characteristics
Situational
Factors
Purchasing
Approaches

14. Step 5. Market Segmentation Demographic Segmentation
Dividing the market into groups based on variables such as:
Age
Gender
Family size or life cycle
Income
Occupation
Education
Religion
Race
Generation
Nationality
Most Popular Bases & Easiest to Measure
Marketing Segmentation HOA Chapter 9

15. Step 6. Market Segmentation Psychographic Segmentation
Divides Buyers Into Different Groups Based on:
Social Class
Lifestyle
Personality
Marketing Segmentation HOA Chapter 9

16. Step 7. Market Segmentation Behavioral Segmentation
Dividing the market into groups based on variables such as:
Occasions
Benefits
User status
Usage rate
Loyalty status
Readiness stage
Attitude toward product
Marketing Segmentation HOA Chapter 9

17. Behavioral Bases User Status & Brand Loyalty Personality/Lifestyle
Social Class
Occasion
Readiness to Buy
Benefits Sought
Usage Rate

18. Step 8. Market Segmentation Segments must respond differently to different marketing mix elements & programs Requirements for effective segmentation
Measurable
Accessible
Substantial
Size, purchasing power, profiles
of segments can be measured.
Actionable
Segments can be effectively
reached and served.
Segments are large or profitable enough to serve.
Effective programs can be designed to attract and serve the segments.
Marketing Segmentation HOA Chapter 9

19. Evaluating Market Segments
Segment size and growth
Segment structural attractiveness
Company objectives and resources

20. Step 9. Market Targeting Market Coverage Strategies
Company
Marketing
Mix
Market
A. Undifferentiated Marketing
Company
Marketing Mix 1
Segment 1
Company
Marketing Mix 2
Segment 2
B. Differentiated Marketing
Company
Marketing Mix 3
Segment 3
Segment 1
Company
Marketing
Mix
Segment 2
Segment 3
C. Concentrated Marketing
Marketing Segmentation HOA Chapter 9

21. Step 10. Market Targeting Evaluating Market Segments
Segment Size and Growth
Analyze sales, growth rates and expected profitability
for various segments.
Segment Structural Attractiveness
Consider effects of: Competitors, Availability of
Substitute Products and, the Power of Buyers &
Suppliers.
Company Objectives and Resources
Company skills & resources relative to the segment(s).
Look for Competitive Advantages.

22. Choosing a market-coverage strategy
Company resources
Degree of product homogeneity
Market homogeneity
Competitors’ strategies

23. Five Patterns of Target Market Selection
Single-segment
concentration
Selective
specialization
M1 M2 M3 P1 P2 P3
Product
specialization
M1 M2 M3 P1 P2 P3 P1 P2 P3
M1 M2 M3
P = Product
M = Market
Market
specialization
M1 M2 M3 P1 P2 P3
M1 M2 M3
Full market
coverage P1 P2 P3

24. Step 11. Market Targeting Choosing a Market-Coverage Strategy
Company
Resources
Product
Variability
Product’s Life-Cycle
Stage
Market
Variability
Competitors’
Marketing Strategies

25. Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the the target market’s mind.

26. Step 12: Positioning for Competitive Advantage
Product’s Position - the way the product is defined by consumers on important attributes - the place the product occupies in consumers’ minds relative to competing products.
Marketers must:
Plan positions to give their products the greatest advantage in selected target markets
Marketing Segmentation HOA Chapter 9

27. Positioning Strategies
Positioning by specific product attributes
Positioning by benefits
Positioning for user category
Positioning for usage occasion
Positioning against another competitors
Positioning against another product class

28. Steps to Choosing and Implementing a Positioning Strategy
Step 1. Identifying Possible Competitive Advantages: Competitive Differentiation.
Step 2. Selecting the Right Competitive Advantage: Unique Selling Proposition (USP).
Step 3. Communicating and Delivering the Chosen Position.
Marketing Segmentation HOA Chapter 9

29. The BCG Competitive Advantage Matrix
Number of Approaches
to Achieve Advantage
Few
Many
Volume
Specialized
Size of the
Advantage
Small
Large
Stalemated
Fragmented

30. Product Differentiation
Physical attributes
Service differentiation
Personnel differentiation
Location
Image differentiation

31. Product Differentiation
Form
Fea-
tures
Perfor-
mance
Quality
Conform-
ance
Quality
Dura-
bility
Relia-
bility
Repair-
ability
Style
Design

32. Services Differentiation
Ordering
Ease
Installation
Customer
Consulting
Miscellaneous
Services
Delivery
Customer
Training
Maintenance
& Repair

33. Which differences to promote?
Important to customers
Distinctive
Superior
Communicable to customers
Preemptive
Affordable
Profitable

34. Image Differentiation
Media
Symbols
Atmosphere
Events

35. Differences Worth Establishing
Important
Profitable
Distinctive
Differences Worth
Establishing
Affordable
Superior
Preemptive

36. Perceptual Map
Positioning map of service level versus price. Source: MARG, 2007

37. Positioning Strategies
Product Attributes
Benefits, Problem Solutions & Basic Needs
Cholesterol Free Oil:Dhara
Price & Quality
Specific Use : Gift for all Events Titan
Against Other Products: Tata salt Vs. Captain Cook
Product User :Fashion loving , Well to do Consumers :Vimal fabrics
Against a Competitor