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CHAPTER - 5

SEGMENTATION, TARGETING &


POSITIONING
I. MARKET SEGMENTATION
 Market Segmentation is grouping
of consumers according to such
characteristics as income, degree
of urbanization, race or ethic
classification, geographic location,
education.” Cundiff & Still
 All customers can’t be served so
heterogeneous markets have
been divided into homogeneous
groups to cater to their needs
properly.
 Focuses on “Divide & Conquer”
APPROACHES TO MARKET SEGMENTATION

Approaches

Product
Mass Target
differentiation
marketing marketing
marketing

Market Market Product


segmentation targeting positioning
MASS MARKETING
PRODUCT DIFFERENTIATION MARKETING
TARGET MARKETING
TWO TYPES OF MARKET

1. Segmenting Consumer
Markets

2. Segmenting Business
Markets
1. SEGMENTING CONSUMER MARKETS
BASIS OF SEGMENTING CONSUMER MARKETS

 Geographical
(Nations, Regions, Cities, Neighborhoods)
 Demographic
(Age, Income, Gender, family size Lifecycle,
education, etc)
 Psychographic
(Personality, Culture, Lifestyle)
 Behavioral
(Occasion, Benefits Sought, User Status, Usage
Rate, loyalty status)
GEOGRAPHIC SEGMENTATION

Geographic segmentation calls for dividing the market


into different geographical units such as nations,
regions, states, cities, or neighborhoods. A company may
decide to operate in one or a few geographical areas or
to operate in all areas but pay attention to geographical
in needs wants.
 Tractors and fertilizer sold in rural areas
 Branded Garments/ Shoes in urban areas
 Southern are found of coffee and north Indians like Tea
DEMOGRAPHIC SEGMENTATION

Demographic Segmentation divides the market into


groups based on variables such as age, gender, family
size, family life cycle, income, occupation, education,
race, generation and nationality.
e.g. – Garments: Children’s’ clothes, women’s wear, men’s wear
- Cosmetics and toiletries: beauty aids for women and shaving aids
for men
- Airlines: Economy class, club/ executive class
- Fridge: Different sized like 180, 230 liters for different family sizes.
DEMOGRAPHIC SEGMENTATION…
Age Group – Amul’s Product

For Kids For Youth

For Women & Aged


DEMOGRAPHIC SEGMENTATION…

Gender Segmentation– Emami

Women’s: Naturally fair

Men: Fair and handsome


PSYCHOGRAPHIC SEGMENTATION

Psychographics is the science of using


psychology and demographics to better
understanding consumers.
In this buyers are divided into different groups on
the basis of psychological/personality traits,
lifestyle, or values.
People within the same demographic group can
exhibit very different psychographic profiles.
Values and lifestyles significantly affect product
and brand choice of consumers.
PSYCHOGRAPHIC SEGMENTATION…

Personality : Extroverts, Introverts, Aggressive

Lifestyle : Conservative, Liberal, Health conscious,


Adventuresome, Status seekers.

Social Class : Lower-lower class, lower-middle class,


Middle class, Middle-upper class, Upper-
Upper class.

Culture : Continental, Chinese, Indian, South


Indian, Hindu, Japanese, Arabians
BEHAVIORAL SEGMENTATION

Behavioral segmentation divides buyers into groups based on


their knowledge, attitude, uses, or responses to a product.
o Occasions

o Benefits

o User Status

oUser Rate

oLoyalty Status
Requirements for Effective Segmentation

To be useful, market segments must be:

Measurable Accessible

Substantial Differentiable

Actionable
REQUIREMENTS FOR EFFECTIVE SEGMENTATION

 Measurable (32.5 million left-handed


people in the US, almost equaling the
entire population of Canada, yet few
products are targeted towards them)
 Accessible (so that a firm can reach
through suitable means of
communication & distribution)
…CONT’D

 Actionable (Air line identified 7 market


segments but has too less staff to develop
separate marketing program)
 Differentiable (hair dye for men & women,
perfume for married & unmarried women)
 Substantial (developing car for people
whose height is more than 7 feet)
2. SEGMENTING BUSINESS MARKETS

 Type of business activities (Insurance co.


has fire & general insurance, life
insurance, marine insurance)
 Geographical location (Handloom industry
at Panipat, hosiery industry in Ludhiana)
 Usual purchasing procedure (less price,
quality, easy availability)
 Size of user (large, medium & small
buyers)
II. MARKET TARGETING
 After segmentation, each segment is
evaluated for three different factors:
Segment size & growth

Segment structural attractiveness

Company’s objectives & resources

 A target market consists of a set of


buyers who share common needs or
characteristics that the company decides
to serve
TARGET MARKETING STRATEGIES

Undifferentiated Differentiated
Marketing Marketing

TARGETING BROADLY

Concentrated
(Niche) Micromarketing
Marketing
TARGETING NARROWLY
1. UNDIFFERENTIATED MARKETING

 Also called mass marketing


 Ignoring various segment differences, the
company targets the whole market with
one offer.
Eg. Tata Salt
 The Company designs a product and a
marketing program that will appeal to the
largest number of buyers
2. DIFFERENTIATED MARKETING

A strategy in which a
firm decides to target
several market segments
and designs separate
offers for each.
HUL

 Food & Drink


 Bru, Knorr, Red Label, Kwality Walls, Kissan

 Home Care

 Surf Excel, Rin, Vim, Domex

 Personal Care

 Dove, Clinic Plus, Sunsilk, Close up

 Water Purifier

 Pure It
3. CONCENTRATED (NICHE) MARKETING
 Especially used when the Company has
limited resources
 Instead of focusing on getting small share in
the whole market, the Company tries to
identify a small segment and thereby gains
large share in that niche (narrow/small)
segment.
 Apple (PC market V/s music download
market)
 Johnson & Johnson (Baby products)
LEVEL/APPROACHES OF MARKET
TARGETING…
Nice Marketing/ Concentrated Marketing
4. MICROMARKETING

 The practice of tailoring products and


marketing programs to the needs and
wants of specific individuals and local
customer groups
 Includes

Local marketing

Individual marketing
A) LOCAL MARKETING

 Tailoring brands and promotions to the needs


and wants of local customers- cities,
neighborhoods and even specific stores
Eg: Citibank provides different mixes of banking
services in each of its branches
Wal-Mart customizes its merchandise store by
store to the meet needs of local shoppers
(Less economies of scale, logistics problems and
dilution of overall image of brand)
LEVEL/APPROACHES OF MARKET
TARGETING …
Local Marketing
Target marketing is leading to marketing programs tailored to the
needs and wants of local customer groups in trading areas,
neighborhoods, even individual stores.
 Citibank provides different mixes of banking services in each of its
branches like NRI branches.
 Wal-Mart customizes its merchandise store by store to the meet
needs of local shoppers
 Similarly, there are “in-city” courier companies in many cities in
India.
 Recently, the movie Spiderman 3 was released in India in five
different languages, including Bhojpuri, a regional dialect.
 Happy New Year is going to be released in China in Chinese
language.
 Bharat Matrimony marriages are mostly community based. The
company initiated 15 regional web sites such as
Bengalimatrimony.com, Punjabimatrimony.com,
Urdumatrimony.com,
B) INDIVIDUAL MARKETING

 Also known as markets-of-one marketing,


mass customization, one to one
marketing
 Tailoring products and marketing
programs to the needs and preferences of
individual customers
Eg. Dell that creates custom-configured
computers
III. DIFFERENTIATION & POSITIONING

 Positioning refers to the process by which


marketers try to create an image or identity
in the minds of their target market for its
product, brand or organization
 The main objective is to convince
customers to believe the marketers’
offerings are different in some way from its
competitors
POSITIONING STRATEGIES

 Positioning by Attributes of product


 Positioning by the Quality of product

 Positioning by Use or Application

 Positioning strategy based on Cultural


Symbols
 Positioning strategy based on
Competitors
REPOSITIONING
 Repositioning refers to the major change in positioning
for the brand/product. To successfully reposition a
product, the firm has to change the target
market’s understanding of the product. This is
sometimes a challenge, particularly for well-
established or strongly branded products.
 Firms may consider repositioning a product due to
declining performance or due to major shifts in the
environment. Many firms choose to launch a new
product (or brand) instead of repositioning because of
the effort and cost required to successfully implement
the change.
COMPLAN’S POSITIONING SUCCESS

Originally, it was considered to be vastly


superior formulation

Ethical positioning (recommended by


doctors)

Positioning by Competitor (Your body needs


23 vital foods, milk gives 9, Complan gives
all 23

Your body needs 23 vital foods every day.


Check how many do other food drinks give
COMPLAN’S POSITIONING SUCCESS

Also improved the product’s taste through a


change in the manufacturing process
THANK YOU

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