Segmentation ,Targeting

and Positioning
Mamta Mohan
Amity business School, Noida
 Issues
What are the different levels of
market segmentation?
How can the company divide a
market into segments?
How can a company choose a most
attractive segment?
What are the requirements for
effective segmentation?

3
 STP process
Identifying those particular groups of
customers, which your product/service is
capable of meeting their requirements
(needs) most.

Each of these groups constitute a market

segment

Selecting one or more segments to enter

Establishing and communicating the

product’s key distinctive benefits in that
market

4
 Market Segment

A large identifiable group

within a market with similar
wants, purchasing power,
geographical locations, buying
attitudes

5
 Levels of segments:

Mass marketing
Micromarketing; segments ,
niches, local areas, and individuals

6
 Niche Marketing

What is an attractive niche ?

A distinct set of needs
A premium can be charged
Not likely to attract competition
Gains certain economies through
specialization
Sufficient size, profit and growth
potential

7
 Local Marketing
When the marketing mix is altered
to suit the local conditions
eg. Giving a higher/ lower discount
than what’s prevailing in the rest
of the markets
or implementing a different
promotion scheme

8
Individualized Marketing
When the firm deals with each
customer on a one – to – one basis

Customerization- When products

are customized for the customer

9
 Bases for Segmentation
Geographic –territory demarcations

Demographic – age, family size,

sex, income,education, religion,
generation social class etc.

Psychographic – lifestyle, personality,

values

Behavioral – knowledge,attitudes,usage

10
Segmenting by Income and
Expenditure Patterns

Engel’s Laws, as family income

increases:
A smaller percentage of expenditures go for
food
The percentage spent on housing and
household operations and clothing remains
constant
The percentage spent on other items (such as
recreation and education) increases

11
12
Psychographic Segmentation
Divides a population into groups that
have similar psychological
characteristics, values, and lifestyles
Lifestyle: people’s decisions about
how to live their daily lives, including
family, job, social, and consumer
activities
The most common method for
developing psychographic profiles of a
population is to conduct a large-scale
survey
AIO statements
VALS and VALS 2
“Values and Lifestyles”
13
Using
Psychographic
Segmentation
Psychographic
profiles produce
rich descriptions of
potential target
markets
Greater detail aids
in matching a
company’s image
and its offerings
with the types of
consumers who
are likely
purchasers

14
 Behavioral variables
Occasions – birthdays,
lunchtime,vacations
Benefits – eg.travel – business,
vacation, educational
User status – non users, ex users,
first time users, regular users,
potential users
Usage rate – light, medium, heavy

15
Loyalty status –
diehards,shifters,switchers
Buyer Readiness – unaware –
aware – informed – interested –
desire – intention to buy
Attitude – enthusiastic, positive,
indifferent, negative, hostile

16
Brand Loyalty
Segmenting consumers grouped
according to the strength of brand
loyalty felt toward a product
Frequent flyer programs of airlines
and many hotels

17
Criteria for segmentation
Measurable
Substantial
Accessible
Differentiable
Actionable

18
The Market Segmentation Process

Develop a Relevant Profile for

each Segment
Forecast Market Potential
Forecast Probable Market Share
Select Specific Market
Segments

19
 Market
Targeting( strategies)
Single segment concentration
Selective specialisation
Product specialisation
Market specialisation
Full Market coverage
-undifferentiated marketing
-differentiated marketing
20
Undifferentiated Marketing
Single product addressing all
segments with a single marketing
program.
Mass production is possible giving
scale economies
Pushes price downwards enabling
to attract price sensitive segments

21
Differentiated Marketing
A separate market offering for every
segment
Marketing programs for every
segment could be different
Pushes up costs at various levels,
necessitating sufficient volumes for
viability
Generates inter-segment rivalry

22
Positioning: a marketing
strategy that emphasizes serving a
specific market segment by
achieving a certain position in
buyers’ minds
Attributes
Price/quality
Competitors
Application
Product user
Product class

23
Positioning map
Graphic illustration that shows differences
in consumers’ perceptions of competing
products

Reposition
Marketing strategy to change the position
of its product in consumers’ minds relative
to the positions of competing products

24
Hypothetical
Competitive
Positioning
Map for
Selected
Retailers

25