Marketing Management

Unit 7

Unit 7 Segmentation, Targeting and Positioning

Structure: 7.1 Introduction Learning Objectives 7.2 Concept of Market Segmentation (S) 7.3 Benefits of Market Segmentation 7.4 Requisites of Effective Segmentation 7.5 The process of Market Segmentation 7.6 Bases for Segmenting Consumer Markets 7.7 Targeting (T) 7.8 Market Positioning (P) 7.9 Summary 7.10 Terminal Questions 7.11 Answers 7.12 Mini-Case

7.1 Introduction
Market segmentation is the first step in applying the marketing strategy. In this process the marketers divide the market into homogeneous sub-markets. On the basis of segmentation, the company will prepare and follow different marketing programs for different segments to ensure better customer relationship. This unit deals with the bases of market segmentation, targeting and positioning in the minds of consumers. Learning Objectives After studying this unit, you will be able to Explain the bases of market segmentation Explain the concepts and benefits of market segmentation. Mention the requisites of effective segmentation. Describe the process of evaluating market segments. Identify appropriate target market for given segment. Develop positioning strategies and analyze the same on the basis of the companies product differentiation.

Sikkim Manipal University

Page No. 121

Marketing Management

Unit 7

7.2 Concept of Market Segmentation

Market Segmentation is the process of dividing a potential market into distinct sub-markets of consumers with common needs and characteristics. Exhibit 1 Why Segmentation? In India, majority of the Hindu married women, contrary of the part of the country they belong to, sport a mangalasutra. But its the design of the pendant that differentiates Mrs. Sharma from New Delhi and a Mrs. Venkataraman from Chennai. In America, consumer marketers such as P&G and Unilever have created different kinds of utensil cleaners, laundry care products for Hispanics and African-Americans. The reason being that they have different cleaning needs depending on the way they cook and the kind of clothes they wear. One would have imagined given the famed Indian diversity that marketers here would have produced a host of products and product variants to cater to large differences that exist regionally, religiously and not to mention by caste. So why have marketers shied away from creating products specifically for them despite large grouping that have completely different needs. Or for that matter how many companies have actually devised products that are specific to a particular community? Traditionally large Indian companies concentrated or cared only about the urban consumers giving importance to metros and other important cities. Many marketing experts believe that product designers and marketers in India have traditionally been careful of not courting specific communities, in the fear of distancing themselves from others- a case of what might well be labeled as pseudo secular marketing. However, in not Targeting the specific ethnicities of the Indian society, national companies are possibly losing a huge opportunity to take their products to the next level of popularity. A Niche market only implies that it is focused, it need not necessarily mean small, says Anand Halve who runs Chlorophyll, a brand consulting firm. He feels national brands have a mental block when it comes to thinking regionally, as they are constantly searching for the lowest common denominator. Parvati Mahadev, a consumer insights consultant with
Sikkim Manipal University Page No. 122

Marketing Management

Unit 7

Brandscapes puts it well when she says that by standardizing products, one may end up meaning something to everybody, but fall short of meaning a lot to some people. Some marketing experts say catering to various social segments can take place at several levels. First if the preferences are starkly different, companies will have to design altogether different products (say Beef products for Muslims). Second is where a difference in habit calls for a change in design like a spicier wafer variant in Tamilians or Andhraites. Another important aspect is communication and marketing for a product to cater to various cultures. Ironically marketers who have chosen to walk this path have been rewarded. Anchor Toothpaste, for example, changed the paradigm for social targeting by introducing 100% vegetarian toothpaste in early 2000s. The Gujarati based Anchor originally had in mind only Gujaratis and Marwaris as the key communities for the product. Similarly, Big Bazaar has been actively mapping tastes of its customers and uses it for better assortment of products. Rajan Malhotra CEO Big Bazaar points out that the chain actively stocks sticky dal in places where there is a dominance of Gujaratis and spices where it sees Tamilians. Pizza hut, an international brand that believes in uniformity of its products has chosen to do things differently in India. It has special vegetarian outlets in Gujarat whereas in Hyderabad it does not serve pepperoni items. Asian Paints pushed the envelope the most. In the 1990s it put out a series of ads each of them targeted a specific community like Punjabis or Tamilians. They were mainly aired in the run-up to a festival, like Pongal (Tamil New Year) or Gudi Padwa (celebrated widely in Maharashtra). It helped the brand build a strong emotional connect as Amit Syngle, VP Sales and Marketing, Asian Paints puts it. According to Shiv Vishvanathan, a noted social scientist, uniform product design is more a matter of pragmatism than hypocrisy. Ethnicity or customs cannot be core value for a large brand, as much as competency, he says. But market watchers say food, media and certain daily utility articles are
Sikkim Manipal University Page No. 123

Marketing Management

Unit 7

objects where companies can gain the most by nuanced ethnic targeting. Islamic experts say there is tremendous opportunity in items like alcoholfree perfumes, special toothpastes, halal cosmetics, toiletries, customized housing and even Islamic dolls. Increasingly brands are trying to iron out the lovely and interesting kinks (in their target audience) and making it one smooth landscape, says Mahadev, while the net result is beautiful, I wonder whether this helps in creating a more clear identity, she added. Most experts say in these days of media explosion, it is relatively easy to reach out to various ethnicities of the country, Regional channels and newspapers are dime a dozen. All it would make a different (and a special) commercial in Bengali or Urdu. Nobody can complain anymore that the costs of popularizing a new ethnic product are inhibiting. HUL and its ad agency Lowe broke new ground here when they launched a different set of ads for Surf Excel in the South, where the water is hard and lather limited, quite contrary to the usual detergent ad with images of frothing detergent. Clearly here was the case of recognizing that different consumers have different needs. Perhaps like in detergents, when parity or uniform products grow and marketers are faced with stagnating volumes, they will take advantage of the diversity that exists in India. (Source: Brand Equity, The Economic Times, 25th November 2009)

7.3 Benefits of Market Segmentation

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Understanding the needs of Consumers To adopt better positioning strategies Proper allocation of marketing budget Helps in preparing a better competitive strategy Provides guidelines in preparing media plan of the company Different offerings in different segments enhance the sales Customer gets more customized product Helps Company to identify niche markets Provides opportunities to expand market Encourages innovation
Page No. 124

Sikkim Manipal University

Marketing Management

Unit 7

7.4 Requisites of Effective Segmentation

To be useful, market segmentation must exhibit some characteristics that are as follows: 1. Measurable and Obtainable: The size, profile and other relevant characteristics of the segment must be measurable and obtainable in terms of data. If the information is not obtainable, no segmentation can be carried out. For example, Census of India provides the data on migration and education level, but does not specify how many of the migrated employees are educated and if educated how many are in white collared jobs. If a company wants to target white color collared employees who are migrated to particular city, it will not able to measure the same. . 2. Substantial: The segment should be large enough to be profitable. For consumer markets, the small segment might disproportionably increase the cost and hence products are priced too high. For example, when the cellular services started in India cost of the incoming calls and outgoing calls were charged at Rs 12/minute. As the number of subscribers grew, incoming calls became free. Further growth of subscribers resulted in lowering tariffs for outgoing calls to the lowest level in the world. 3. Accessible: The segment should be accessible through existing network of people at an affordable cost. For example, Majority of the rural population is still not able to access the internet due to the high cost and non-availability of connections and bandwidth. 4. Differentiable: The segments should be different from each other and may require different 4Ps and programs. For example, Life Insurance Corporation of India needs separate marketing programs to sell their insurance plans, unit plans, pension plans and group schemes 5. Actionable: The segments which a company wishes to pursue must be actionable in the sense that there should be sufficient finance, personnel, and capability to take them all. Activity 1: Mention how a nearby hospital has segmented its customers and how segmentation has helped the hospital in providing more services.

Sikkim Manipal University

Page No. 125

Marketing Management

Unit 7

7.5 The Process of Market Segmentation

Figure 7.2

1. Identify existing and future wants in the current market Marketers must examine the changing needs of the customer. This process provides opportunity to examine whether customers are satisfied with the existing products or not. If they are not satisfied what are the features they are not happy with or what kind of features they would like to have in the product at. It also helps to test the innovative concepts that company has, commercially viable or not. For example, Titan, wrist watch manufacturer from Tata group should analyze whether customers are satisfied with the time accuracy in the watch. It should also analyze what are the other features customers are looking for in their watch. It may be style, calculator, voice recorder, jewels studded or pulse monitor. In this case, time accuracy becomes the existing want and other features become future wants. 2. Examine the attributes that distinguish segments. In this process marketers should segregate different types of wants into homogeneous categories. This may be on the basis of product features, lifestyle or behavior. For example, Titan should analyze how style, calculator, voice recorder, jewels studded and pulse monitor attributes
Sikkim Manipal University Page No. 126

Marketing Management

Unit 7

are different. Is there any possibility of bringing some of these features together? If yes what are the attributes that makes it homogeneous. To illustrate, student community may be interested in style and also want calculator in their watch. 3. Evaluate the proposed segment attractiveness on the basis of measurability, accessibility, and size. Segments selected in the above steps should be evaluated against the requisites i.e. measurability, accessibility, substantial, actionable and differentiability. Companys further programs will depend on the outcome of this process. Titan should examine a. How large is the student segment is, who like style and also want calculator? b. How to get the data pertaining to these students? c. Whether this segment is accessible to existing Titan showrooms? d. How this segment is different from current segments? If selected, what value this proposed segment adds to the company? Self Assessment Questions 1. ____________is the process of dividing a potential market into distinct sub-markets of consumers with common needs and characteristics. 2. Measurability of the segment is assessed on a. Size b. Profitability c. Required resources d. All the above. 3. The requisite of segmentation which specify on 4Ps and programs is a. Action b. Substantial c. Differentiability d. All the above. 4. Future wants of the customer should be analyzed before identifying the segments. a. Yes b. No
Sikkim Manipal University Page No. 127

Marketing Management

Unit 7

5. Segmentation encourages innovation a. True b. False

7.6 Bases for Segmenting Consumer Markets

Consumer Market Segments

Figure 7.3

1) Geographic segmentation: In this type of segmentation, the market is divided into different geographical units such as nations, states, regions, cities or neighborhoods. The company can operate in one or a few Geographic areas or operate in all but pay attention to local variations. For example, Bennett, Coleman and Co. Ltd divided markets according to geographical units for their tabloids. In Bangalore, the tabloid is known as Bangalore Mirror where as it is Mumbai Mirror in Mumbai. 2) Demographic Segmentation: In demographic segmentation the market is divided into groups based on variables such as age, family size, family life-cycle, gender, income, occupation, education, religion, race,
Sikkim Manipal University Page No. 128

Marketing Management

Unit 7

generation, nationality and social class. Demographic variables are the most popular bases for distinguishing customer groups. One reason is that consumers wants, preferences and usage rates are often associated with demographic variables. Demographic variables are easy to measure. Even when the target market is described in nondemographic terms, the link back to demographic characteristics is needed in order to estimate the size of the target market and appropriate media that should be used to reach it efficiently. Some of the demographic variables used are : a) Age and Life-Cycle Stage: Consumers wants and abilities change with age. On the basis of age, a market can be divided into four parts viz., children, young, adults and old. For the consumers belonging to the different age groups, different types of products are produced. For instance, different types of ready-made garments are produced for consumers of different age groups. A successful marketing manager should understand the age group for which the product would be most suited and determine a suitable marketing policy, pricing policy, advertising policy etc... For example, HUL launched Pepsodent kids toothpaste for small children. b) Gender: Gender segmentation has long been applied in clothing, hair-styling, cosmetics and magazines. For example, Emami segmented its personal care products on the basis of gender i.e. Emami Naturally Fair for women and Fair and Handsome for men. c) Income: Segmentation based on Income is a traditional practice followed in product categories such as automobiles, clothing, cosmetics and travel. However, income does not always determine the best customers for a given product. For example, Baja Auto limited, a leading automobile company, manufactures different bikes for different commuters on the basis of the Income levels. For entry level (income less than Rs 35000) it is Bajaj CT 100, for mid segment (income greater than Rs 35000 but less than Rs. 60000) it is Pulsar and for the upper segment (income greater than Rs 60000) Avenger and Eliminator are positioned respectively.
Sikkim Manipal University Page No. 129

Marketing Management

Unit 7

3) Psychographic Segmentation: In Psychographic segmentation, buyers are classified into different groups on the basis of life-style or personality and values. People within the same demographic group can exhibit very different psychographic profiles. a) Life-style: People have different life-styles and products they consume express their life-styles. Many companies seek opportunities in life-style segmentation. But life-style segmentation does not always work.

Figure 7.4

One of the most used psychographic profiling schemes is called VALSTM. Developed by SRI International, Inc., its first version, groups the entire U.S. population into eight groups, based on the identities they seek and implement via marketplace behaviors. The Eight VALSTM Group: Using the self-orientation and resources dimensions, VALS defines eight segments of adult consumers who have different attitudes, exhibit distinctive behavior and decision making patterns. These segments are Innovators Thinkers, Achievers, Experiencers, Believers, Strivers, Makers and Survivors
Sikkim Manipal University Page No. 130

Marketing Management

Unit 7

Innovators are successful, sophisticated, active, take-charge people with high self-esteem and abundant resources. They are leaders in business and government and are interested in growth, innovation, and change. They seek to develop, explore and express themselves in a variety of ways, sometimes guided by principles and sometimes by a desire to have an effect or to make a change. They seek to develop, explore and express themselves in a variety of ways. Image is important to them, not as evidence of status or power but as an expression of their taste, independence, and character. They possess a wide range of interests, are concerned with social issues, and show a cultivated taste for the finer things in life. For example, CEOs of MNCs, Entrepreneurs belong to this category. Thinkers are mature, satisfied, comfortable, reflective people who value order, knowledge, and responsibility. Most are well educated and in (or recently retired from) professional occupations, content with their career, families, and tend to center around the home. Thinkers have a moderate respect for the status quo institution, but they are open minded to new ideas and social changes. They tend to base their decision on firmly held principles and consequently appear calm and self-assured. Thinkers are conservative, practical consumers who value performance, service, and price more than personal values (e.g., social and emotional values). For example: Senior professionals, Politicians can make up this segment. Achievers are successful career or work oriented people who like to feel that they are in control of their lives. They value predictability and stability over risk. They are deeply committed to work and family. Work provides them with a sense of duty, material rewards, and prestige. Their social lives are centered on family, religion and career. Achievers follow conventional lives, are conservative in nature, and respect authority and status quo. Image is important to them. They favor established prestige products and services that show success to their peers. For example, Successful professionals like Doctors, Lawyers belong to this segment. Experiencers are young, enthusiastic, impulsive, and rebellious. They seek variety and excitement, savoring the new, the offsets, and
Sikkim Manipal University Page No. 131

Marketing Management

Unit 7

the risky. They are still in the process of formulating life values and behavior patterns and quickly become enthusiastic about new possibilities but are equally cool also. At this stage in their lives they are politically uncommitted, uninformed, and highly unsure about what they believe. Their energy finds an outlet in exercise, sports, outdoor recreation, and social activities. Experiences are avid consumers and spend much of their income on clothing, fast food, music and movies For example; Young IT professionals belong in this category. Believers are conservative, conventional people with commitment to family, religion, community, and the nation. Living by a moral code is very important to them. As consumers, Believers are conservative and predictable and favor domestic products and established brands. Their income, education, and energy levels are modest but sufficient to meet their needs. For example, Middle income groups belong to this category. Strivers seek motivation, self-definition and approval from the world around them. They strive to find a secure place in life, and may lack economic, social, and psychological resources. Strivers are concerned about the opinions and approval of others. Money defines success for them and they often feel that life has given them a raw deal as they find they dont have enough money. Strivers are impressed by possessions, but what they wish to obtain is often beyond their reach. For example, low income groups are a part of this market segment. Makers are practical people who have constructive skills and value self-sufficiency. They live within a traditional context of family, practical work and physical recreation and have little interest in what lies outside that context. Makers experience the world by working in it, building a house, raising children, fixing a car, or canning vegetables and have enough skills, income and energy to carry out their projects successfully. Makers are politically conservative, suspicious of new ideas, respectful of government authority and organized labor, but resentful of government intrusion on individual rights. They are unimpressed by material possessions other than
Sikkim Manipal University Page No. 132

Marketing Management

Unit 7

those with a practical or functional purpose such as tools, utility vehicles, and fishing equipment. For example, Trade Union leaders, Human activists may belong in this segment. Survivors tend to be chronically poor, ill-educated, low skilled, elderly and concerned about their health. Preoccupied with the urgent needs of the present moment, they do not show a strong selforientation. Their chief concerns are security and safety. Survivors are cautious consumers. They represent a very modest market for most products and services but they are loyal to favorite brands. For example, Retired employees, senior citizens can easily belong to this segment. b) Personality: When Marketers use personality variables to segment the markets, they endow their products with brand personality that corresponds to consumer personalities. For example, Raymond advertises its fabrics with the tag The Complete Man. c) Social Class: It has a strong influence on the consumer preferences and the products they buy or consume. For example, when buying cars, clothing, home furnishings, leisure activities, reading habits etc., Social class becomes the key factor. Many companies design products and services for specific social classes. For example, TATA Nano was introduced in the market as a One-Lakh Car that could be affordable by middle and lower income groups. 4) Behavioral Segmentation or Consumer Response Segmentation: In behavioral segmentation, buyers are divided into groups on the basis of their knowledge or attitude towards the use of, or response to a product. Some marketers believe that behavioral variables are the ideal primary factors for creating market segments. Some of the behavioral factors are: a) Occasions: According to the occasions, buyers develop a need, purchase a product or use a product. It can help firms expand product usage. A company can consider critical life events to see whether they are accompanied by certain needs. For example, Tanishq a TATA enterprise offers gold schemes and promotions for Akshaya Thrutiya (auspicious day to purchase jewellery)

Sikkim Manipal University

Page No. 133

Marketing Management

Unit 7

b) Benefits: Buyers can be classified according to the benefits they seek from the products. For example, Peter England, a Madhura garment brand positioned its wrinkle free trousers on the basis of benefits. c) User Status: Markets can be segmented into non-users, potential users, first time users and regular users of a product. Each market segment requires a different marketing strategy. The companys market position will also influence its focus. Market leaders will focus on attracting potential users, whereas smaller firms will try to attract current users away from the market leader. For example, Kishkinda resort near Hampi classifies its customers according to this characteristic. Resort believes that locals falls into non- user category, affluent class come to Hampi as potential users, foreigners as first time users, rich people near Hampi who frequently come there as regular users. d) Usage Rate: Markets can be segmented into light, medium and heavy product users. Heavy users are often a small percentage of the market but account for a high percentage of total consumption. Marketers prefer to attract one heavy user rather than several light users and so, they vary their promotional efforts accordingly. For example, Alan Paine textile brand, offered 4 cotton trousers for Rs. 999. Here, the Company is interested in getting profits from sales volume rather than its selling price. e) Loyal Status: Consumers have varying degrees of loyalty to specific brands, stores and other entities. Buyers can be divided into four groups according to brand loyalty status. a) Hard-core Loyals: Consumers who buy one brand all the time. For example, customer may be using only BSNL cellular services though there are different options available. b) Split Loyals: Consumers who are loyal to two or three brands. For example, consumer may go for tax savings schemes of post offices and Life Insurance Corporation of India c) Shifting Loyals: Consumers who shift from one brand to another. For example, consumer who used Nokia cell phones starts buying Sony- Ericsson mobiles.
Sikkim Manipal University Page No. 134

Marketing Management

Unit 7

d) Switchers: Consumers who show no loyalty to any brand. When there is a low involvement and few significant perceived brand differences consumer try to purchase different brands in the category. For example, a customer who bought Cinthol wants to try Medimix, Mysore Sandal, Himalaya, Santoor, Chandrika etc A company can identify its products strengths by studying its Hard-core Loyal. By studying its Split Loyal, the company can pinpoint which brands are most competitive with its own. By looking at customers who are shifting away from its brand, the company can learn about its marketing weaknesses and attempt to correct them. f) Buyer-Readiness Stage: A market consists of people in different stages of readiness to buy a product. Some are unaware of the product, some are aware, some are informed, some are interested, some desire the product and some intend to buy. The relative number makes a big difference in designing a marketing program. For example, People may be aware of Aqua guard but dont know much about it.

Activity 2: Identify the bases by which companies have segmented their markets for these products (taking help from the television ads and other advertisements): Nakshatra diamonds, Cinthol soaps, Domex toilet cleaner and Parker pen.

7.7 Targeting
Targeting is defined as a group of people or organizations for which an organization designs, implements and maintains the marketing mix. Once the bases for segmentation are selected, the marketer has to identify the people or organization to whom the product is meant. Organizations may not differentiate their customer or it may have different customer for different products. In the next section we will study how to identify the target customers. Selecting Target Market Segments Depending upon the emerging patterns of market segmentation, homogeneous preference (showing no natural segments as in case of soft
Sikkim Manipal University Page No. 135

Marketing Management

Unit 7

drinks sale by Pepsi and Coca-Cola), diffused preference (showing clear preferences as in case of automobile market), and clustered preference (market showing natural segments as in case of occupation having impact on the types of clothes worn), a company chooses its market segmentation strategy. A) Undifferentiated Marketing: It is a market coverage strategy in which the company treats the target market as one and does not consider that there are market segments that exhibit uncommon needs. The company focuses on the centre of the target market to get maximum advantage. The feature of one product-all segments calls for presenting one marketing-mix for the target market. For example, the Coca-Cola Company sells Coke, Limca, Thums-up etc., and does not distinguish the target audience. B) Differentiated Marketing: It is a market coverage strategy in which the company goes for proper market segmentation as depicted by its analysis of the total market. The company, therefore, goes for several products or several segment approach which calls for preparing different marketing mixes for each of the market segment. This strategy is followed by Hindustan Unilever Limited which sells different soaps (Life Buoy, Lux, Rexona, Liril, Pears etc.) and each of them has its own market. Thus, the company creates segments in the soap market and not in toiletries market (including soaps, detergents, toothpaste, etc.) C) Concentrated Marketing: It is a market coverage strategy in which company follows one product-one segment principle. For example, Ashok Leyland produces large chassis of machine which can be used for buses and trucks. The manufacturer gets maximum knowledge about the segments needs and therefore acquires special reputation. This strategy can also help small companies to stand against a large corporation because small companies can create niches in its oneproduct one-segment approach by providing maximum varieties. Choosing a Market Coverage Strategy: The following table depicts an overview of the three market coverage strategies: Table 7.1 provides a snap-shot view.

Sikkim Manipal University

Page No. 136

Marketing Management

Unit 7

Table 7.1: Comparison of Market Coverage Strategies Focus Product Segment Marketing-Mix Undifferentiated Marketing One/Few All One Differentiating Marketing Many Many Many Concentrated Marketing One/Few One/Few One/Few

Given the comparison of different coverage strategies, it is easy to identify the relevant strategies as shown in Table 7.2.
Table 7.2: Choosing a Market Coverage Strategy Undifferentiated Marketing Constrained Firm Resources Common usage Products Different need Satisfying products More suitable Most suitable Least suitable Differentiating Marketing Least suitable More suitable Most suitable Concentrated Marketing Most suitable Least suitable More suitable

Given the above table, the firms resources and the products requirement in its present form (by all or few) would decide the choice of a particular market- coverage strategy. Finally, the competitors adaptation of a particular strategy should be considered for deciding the companys own strategy. For example, Coca-Cola starts segmenting soft drinks market and targets family, Pepsi cannot ignore it because it would be suicidal for them (segmentation would provide differentiation of products more easily).

7.8 Market Positioning

Each firm needs to develop a distinctive positioning for its market offering. Positioning is the act of designing the companys offering and image to occupy a distinctive place in the target markets mind. Many marketers advocate promoting only one central benefit and Rosser Reeves called it as a unique selling proposition. Some of the USPs includes best quality, best service, Lowest price, best value, safest, more advanced technology etc. If a company hammers away at one of these positioning

Sikkim Manipal University

Page No. 137

Marketing Management

Unit 7

and delivers on it, it will probably be best known and recalled for its strengths. Not everyone agrees that single-benefit positioning is always best. Doublebenefit positioning may be necessary if two or more firms claim to be best on the same attribute. There are even cases of successful triple-benefit positioning. As the companies increase the number of claims for their brand, they risk disbelief and a loss of clear positioning. In general, a company must avoid four major positioning errors. 1) Under positioning: Some companies discover that buyers have only a vague idea of the brand. The brand is seen as just another entry in a crowded marketplace. 2) Over-positioning: Buyers may have too narrow image of the brand. 3) Confused Positioning: Buyers might have a confused image of the brand resulting from the companys too many claims or changing the brands positioning too frequently. 4) Doubtful Positioning: Buyers may find it hard to believe the brand claims in view of the products features, price or manufacturer. Positioning maps: Two dimensional graphs of how a product, brand or company is perceived versus competition. Before identifying the positioning strategies for the product, marketer prepares its perceptual maps. These maps are drawn on important buying dimensions of consumer for company products as well as competitor products. How to construct Position maps? 1. Evaluate the buying dimensions of customer 2. Select two buying dimensions of consumer; for example price and quality. 3. Identify the relative market share: relative market share is the ratio of companys market share to its largest competitors share. 4. Draw the circles according to relative market share on two dimension graph
Sikkim Manipal University Page No. 138

Marketing Management

Unit 7

Position map for Toilet soaps

Figure 7.3

Bases for positioning the product Overcoming the positioning difficulties enables the company to solve the marketing-mix problem. Thus seizing the high-quality position requires the firm to produce high quality products, charge a high price, distribute through high-class dealers and advertise in high-quality media vehicles. The bases for positioning strategies are: 1. Attribute Positioning: A company positions itself on an attribute such as size or number of years in existence. For example, Sunfeast positions its snacky brand as bigger lighter and crisper. (Figure 7.5)

Sikkim Manipal University

Page No. 139

Marketing Management

Unit 7

Figure 7.5

Figure 7.6

2. Benefit Positioning: The product is positioned as the leader in a certain benefit. Automotive: Hyundai Santro Headline: India's best-loved family car is now also India's simplest car to drive. Subhead: Hyundai introduces Santro Zip plus Automatic. No shifting gears, no clutch, no problems. Baseline: The simplest car to drive. (Positioning) 3. Use or Application Positioning: Positioning the product as best for some use and application. For Example, Kenstar positioned its product as unexpectedly cold. (Figure 7.7)

Figure 7.7

Figure 7.8

Sikkim Manipal University

Page No. 140

Marketing Management

Unit 7

4. User Positioning: Positioning the product as best for some user group. In this advertisement (Figure 7.8) of Parle G, the boy was positioned as rock star. This advertisement basically targets the kids and boys. 5. Competitor Positioning: The product claims to be better in some way than a particular competitor. In this advertisement (Figure 7.9) Mathrubhumi base line says In the wake of ABC results, Mathrubhumi celebrates the addition of 33,960 copies while nearest competitor laments the loss of 7,258 copies. Planners, take note. It is directly mentioning its and competitor's newspaper sales figures.

Figure 7.9

Figure 7.10

6. Product Category Positioning: The product is positioned as the leader in a certain product category. Bajaj CT 100 was positioned as leader in the entry segment bikes. (Figure 7.10) 7. Quality or Price Positioning: The product is positioned as offering the best value.

Figure 7.11 Sikkim Manipal University Page No. 141

Marketing Management

Unit 7

The vegetable oil brand Dhara positions itself as anokhi shuddata, anokha asar. This means, company offers unique purity and unique effect. Activity 3: Are you able to note down the targeting and positioning strategies of the particular brand of shampoo (or soap) that you use. Suggest how your shampoo (or soap) can be effectively positioned in the market so that more people will buy it. Self Assessment Questions 6. In _____________segmentation, buyers are divided into different groups on the basis of life-style or personality and values. 7. By studying its _________________ a company can pinpoint which brands are most competitive with its own. 8. _______________ is a market coverage strategy in which company follows one product-one segment principle. 9. ______________ is the act of designing the companys offering and image to occupy a distinctive place in the target markets mind. 10. __________ are consumers who buy one brand all the time.

7.9 Summary
Market Segmentation is the process of dividing a potential market into distinct sub-markets that is, having consumers segments with common needs and characteristics. The size, profile and other relevant characteristics of the segment must be measurable and obtainable in terms of data. Target marketing helps the marketer to identify the markets the group of customers for whom the product is designed. Buyers can be classified into four groups based on brand loyalty status: o Hard-core Loyals are those consumers who buy one brand all the time. o Split Loyals is those consumers who are loyal to two or three brands.

Sikkim Manipal University

Page No. 142

Marketing Management

Unit 7

o o

Shifting Loyals are those consumers who shift from one brand to another. Switchers are those consumers who show no loyalty to any brand.

Positioning is the act of designing the companys offering and image to occupy a distinctive place in the target customers mind.

List of Key terms Segmentation Target markets Market positioning Segmentation Bases Differentiation Concentrated Marketing

7.10 Terminal Questions

1. 2. 3. 4. 5. What do you mean by segmentation? What are its benefits? Discuss the various bases for segmenting consumer markets. Explain the methods of selecting target market segments. Write a note on positioning of the product. What are the requisites of effective segmentation?

7.11 Answers
Answers to Self Assessment Questions: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Market segmentation Size Differentiability Yes True Psychographic Split Loyals Concentrated Marketing Positioning Hard-core Loyal

Sikkim Manipal University

Page No. 143

Marketing Management

Unit 7

Answers to Terminal Questions: 1. 2. 3. 4. 5. Refer to 7.2 & 7.3 Refer to 7.6 Refer to 7.7 Refer to 7.8 Refer to 7.4

7.12 Mini-Case
Business profile of Dabur Foods Ltd. "There are a lot of juicewalaas in city markets, so juice is not something Indian consumers had not seen before. And, we felt if we give them juices in a packaged form, which is more hygienic, it should do well" Amit Burman, CEO, Dabur Food Ltd. Dabur has launched Dabur Amla Flower magic hair oil. It is targeted at college-going girls. It contains Amla and the scents of white flowers such rajnigandha, mogra and jasmine. It costs Rs. 38 for a 100 ml pack and Rs. 20 for a 50 ml pack - Brand line, The Hindu November 19th 2009 Dabur India Ltd (Dabur India), a part of the Dabur Group, was incorporated in 1975 for manufacturing and marketing FMCG, ayurvedic and pharmaceutical products. The pharmaceutical division of the company was demerged in 2003. In Apr 2006, three entities, Balsara Hygiene Products Ltd, Balsara Home Products Ltd and Best Cosmetics Ltd were merged with Dabur India. Business Profile: Dabur India operates with four divisions namely, consumer care, consumer healthcare, foods and international business division. The consumer care caters to six FMCG segments of hair care, oral care, health supplements, digestives, home care and skin and baby care. Some of its major brands include, Vatika, Meswak, Hajmola, Babool and Odomos among others. Consumer healthcare deals in ayurvedic products under the brands Honitus, Nature Care and Shankpushpi among others. Dabur India operates its food business through Dabur Foods Ltd that offers juices, nectars, drinks and food additives under the brand names Real, Active and Coolers among others.

Sikkim Manipal University

Page No. 144

Marketing Management

Unit 7

Here is an extract of the interview: In Brand Speak, Amit Burman, Chief Executive Officer, Dabur Foods Ltd., speaks to exchange4media's Nikhil Gupta, on its brand strategy, psyche of Indian housewife and buying patterns in the processed food category. Q. How is your brand 'Real' fruit juice doing in the market? A. We launched it in the year 1999, and over the years it has shown us very good growth. From last year to this year, it grew at about 30%. I believe its good growth but then we are starting from a very small base, for a category, which is at a very nascent stage as compared to its potential today. Q. What kind of background research you had done before launching your products 'Real' fruit juice and 'Homemade' cooking pastes? A. When we launched 'Real', we didn't do much of market research, as we clearly saw there was a gap in the market. And looking at the Indian consumers, and there are so many juicewalahas in the market, so juice was not something Indian consumers had not seen before. So, we felt if we give them juices in a packaged form, which is more hygienic, it should do well. In other categories, 'yes,' before launching 'Homemade,' we did a lot of research. What we found was that in a typical Indian household, cooking as an activity could be split to two parts. One is the negative activity, which involves preparation of right mix of spices and pastes for the food. The other one being the positive activity, which consists of what an Indian housewife ads on top which makes the final food different in your house than my house. That is where she gets the pride from serving guests, husband, her family, that's something she doesn't wants to loose. So, we decided rather than if we focus on the positive labour, we would be taking away this feeling of pride from her, so we focused on the negative labour, where ginger paste from my house and your house is crushed the same way, garlic paste in my house and your house is crushed the same way. So, we are focusing on what is around the main meal and we are not focusing on the main meal.

Sikkim Manipal University

Page No. 145

Marketing Management

Unit 7

Q. How did the market react to 'Homemade' pastes? A. Most of the products that we have launched actually try to create a category. Even today there is no national level player except us present in the market. Q. How fast is the 'Homemade' range growing sales wise? A. Sales are not growing that fast. In India, there is an inherent problem in the processed food category; they compare the commodity with the market prices. If they were to go out and buy 200g of ginger, it should be equal to so many grams of paste. They don't look at the processing part, that processing is free in their minds. Similarly, what happens is when the commodity prices are going high our product starts selling more. Also, what we have seen is that a housewife usually keeps a bottle of Ginger paste of a garlic paste in the refrigerator and its only used as an emergency. But in regular use, that is something we are trying to create, it should be a regular use item. Q. What is the USP of Homemade? A. The USP as I explained, one insight that we got from the consumer, that the taste of spices grinded on Silbatta (grinding stone) is different from the taste we get from the mixer. We incorporated that in our manufacturing process, we actually use stone grinding to give the same taste to the consumers. We also ran an ad campaign, which has a tagline, saying, "Homemade Ka Paste, Swad Silbatte Wala." Q. Going further, how do you maintain a check at the retailers level that the products are being displayed properly at the point-ofpurchase (pop) since the bottles are usually not clean, which creates a perception that it might be very old? A. See, the manufacturing date is printed over there, but in terms of cleaning the bottles and all, when our sales officers visit the stores; his first job is to check that the products are displayed properly and the bottles are kept clean. Q. Just exploring one thought, wont it be better if the "Homemade" pastes are delivered to the housewife at home, since a lot many
Sikkim Manipal University Page No. 146

Marketing Management

Unit 7

times she would feel awkward picking it up from the shop shelves? A. That's a good suggestion, but rather shying away from sending it to their house; we have to build a brand to tell that consumer that it as good as fresh. Its an inherent problem; people in India will never agree that something that is packaged is fresh. Thus, the onus is on every player in the processed food industry to change the perception to- whatever is on the shelf is fresh. Q. Going back to 'Real' fruit juice. Who is the typical target consumer? And are you trying to compete with Softy Drinks as category? A. In 'Real', we have two range of juices one is Real fruit juice other is Real Active juice. The Real fruit juice is targeted towards the housewife and kids, and the Real Active juice is targeted towards the young adults between the ages of 24 to 35. We are very clearly focused on the in-home segment and soft drink is more out- of- home impulse purchase. Q. How do you maintain the balance in availability of product on the counter as well as the freshness of the product? A. I think it has been a learning experience, in terms of distribution. Very clearly, in processed foods as a category, the date of manufacturing is very critical to the consumer. So, we worked on our products, and now our products are about 35 days from date of manufacture. (Source: www.exchange4media.com) A MBA student after reading the above business profile of Dabur Foods Ltd., and the excerpts from the interview wants to identify the bases for segmenting consumer markets for Daburs different products. She needs help in knowing the strategies that were adopted by Dabur in targeting these segments and how products were positioned in the Indian market. She is also curious to know the global opportunities that Dabur may have with its variety of products.

Sikkim Manipal University

Page No. 147