Segmentation, Targeting and Positioning

Market Segmentation
1. Identify segmentation variables and segment the market
2. Develop profiles of resulting segments

Steps in Market Segmentation, Targeting,and Positioning

Market Targeting
3. Evaluate attractiveness of each segment 4. Select the target segment(s)

Market Positioning

5. Identify possible positioning concepts for each target segment

6. Select, develop, and communicate the chosen positioning concept

Why Segmentation ?
Not all buyers alike Subgroups may be identified Subgroups smaller and more homogeneous Easier to satisfy smaller groups

How to Segment & Target?

1. Break market down 2. Group into segments 3. Choose target market

TARGET MARKET

Bases for Segmenting Consumer Markets

Geographic
Region, City or Metro Size, Density, Climate

Demographic
Age, Gender, Family size and Life cycle, Race, Occupation, or Income ...

Psychographic
Lifestyle or Personality

Behavioral
Occasions, Benefits, Uses, or Attitudes

Bases for Segmentation

Geographic World Region or Country North america, Middle East, Western Europe, India, China Country Region Density City Size Demographic Age Gender Family Size Family Life Cycle Income Occupation Education Religion Generation Nationality under 6, 6-12, 13-19, 20-30, 30-45, 45-60, 60 and above Male, Female 1-2, 2-4, 5+ Young single, young married no children, young married with children under Rs.100000, 100000-300000, 300000-500000, 500000+ Professional, Technical, Officials, Self Employed, Unemployed Literacy rate Hindu, Muslim, Sikkha, Christen Baby Boomers, Generation X, Generation Y Indian, Japanese, American, French, German Northern India, Southern India, Eastern India, Western India Urban, Rural, Suburban under 5000, 5000-20000, 20000-50000,50000-100000.

Bases for Segmentation

Life Style Personality Behavioural Occasions Benefits User Status User Rate Loyalty Status Radiness Stage Regular, Special Occasion Quality, Service, Economy, Convenience Non user, Ex user, Potential user, First time user, Regular user Light user, Medium user, High user None, Medium, Strong Unaware, Aware, Interested, Desirous, Intending to buy Extravagent, Rattional, Economic Extrovert, Introvert, Ambiovert

Market Targeting
1. Evaluating Market Segment Segment Size and Growth Segment Structural Attractiveness Company Objectives & Resources

2. Selecting Target Segment

3. Targeting Strategies -Standardization -Differentiation -Focus

Five Patterns of Target Market Selection

Single-segment concentration

M1 M2 M3 P1 P2 P1

M1 M2 M3 P1 P2

Selective specialization

Product specialization

M1 M2 M3

P2
P3
Market specialization

P3

P3
Full market coverage

M1 M2 M3 P = Product M = Market P1 P1

M1 M2 M3

P2
P3

P2
P3

Choosing a Positioning Strategy

Products 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, Design marketing mixes to create these planned positions.

Positioning
Positioning is an act of creating an image of the product in the minds of customers. Positioning involves the brands unique benefits and differentiations in customers mind. Ex: Complan A complete planned food Videocon Indian Multinational

Positioning Strategy
Identifying Possible Competitive Advantages
Product Differentiation i.e. Features, Performance, Style & Design, or Attributes
Image Differentiation i.e. Symbols, Atmospheres, Events

Services Differentiation i.e. Delivery, Installation, Repair Services, Customer Training Services
Personnel Differentiation i.e. Hiring, Training Better People Than Competitors Do

Product Differentiation

Form

Features

Performance

Quality

Durability

Reliability

Repairability

Style

Design

Product Differentiation
Form: size, shape or physical structure Ex. Sony Handicam, Product of Asian sky shop Features: These are the characteristics that supplements the product basic functioning Ex: Mobile phones with blue tooth, touch screen, recorder Performance : Buyers will pay more for the better performance Ex: Quick service offered in 5 star hotels Quality Ex: Mac Donalds Burger, Barista Coffee, Surf Excel Powder Durability Reliability Ex: Godrej Almirah Reparability easy to repair Style How well the product looks and feels to the customer Ex: Parker Pens, Ray Ban Sun glasses, Design Is the totality of features that affect how a product looks and works in terms of customer requirements ( Pleasing look, easy to open, operate to repair, ) Ex: Gillette in electric shavers

Services Differentiation
Ordering Ease
Ex. Telephone ordering, Internet

Installation
Ex. Reliance WLL phones, Airtel, Tata Sky

Customer Consulting
Ex. Investment Companies

Miscellaneous Services

Delivery
Ex: Home Delivery, Dominos

Customer Maintenance Training & Repair

Ex: SPSS, Data base software
Ex: LG Samsung

PERSONNEL Differentiation
Companies can gain a strong competitive advantage through having better trained people. Trained personnel exhibits following characteristics Competence possess the required skills & knowledge Courtesy Friendly, respectful Credibility Trustworthy Reliability perform the service consistently and accurately Responsiveness respond quickly to the customers problem Communication make an effort to understand the customer and communicate clearly

Channel Differentiation
Coverage Expertise Performance

Image Differentiation
Media Atmosphere

Symbols

Events

Which Differences to Promote Important Profitable Distinctive

Differences Worth Establishing

Affordable Preemptive Superior

Distinctive: Company can offer better than competitors

Superior: Customer might not obtain the same benefit elsewhere Profitable: Introduce the difference with profit Preemptive: Competitors can not imitate the difference easily

Affordable: Buyers can afford to pay for the difference

Communicable: The difference is communicable and visible to the buyers

Important The difference delivers a highly valued benefit to the target buyers

Perceptual Map
Rolls Royce

Stylish, Prestigious Mercedes

Honda Accord Ferrari Conservative, Older Ambassador Baleno Swift Sporty, Fast

Maruti Omini Maruti Alto

Palio

Practical, Economical