Segmentation, Targeting, and Positioning:

Building the Right Relationships with the Right Customers

Devkant Kala
Uttaranchal Group of Institution, Dehradun

Market Segmentation, Targeting, and Positioning

Case Study
Tata Motors
Sells multiple brands within the same product category for a variety of products Brands feature a different mix of benefits and appeal to different segments

Has also identified different niches within certain segments Product modifications are useful

Definition
Market Segmentation:
The process of dividing the total heterogeneous market into relatively distinct homogeneous sub-groups or segments of consumers with similar needs, characteristics or behaviour who might require separate products or marketing mixes.

Definition
Market Segment:
is a portion of a larger market in which the individuals, groups, or organizations share one or more characteristics i.e. wants, purchasing power, geographical locations, buying motive, attitudes or habits, that cause them to have relatively similar product needs.

Levels of Market Segmentation

Mass Marketing Same product to all consumers (no segmentation)

Segment Marketing Different products to one or more segments (some segmentation)

Niche Marketing Different products to subgroups within segments ( more segmentation) Micromarketing Products to suit the tastes of individuals or locations (complete segmentation)

Market Segmentation
Geographical segmentation

Bases of Segmenting Consumer Markets

Demographic segmentation Psychographic segmentation Behavioral segmentation

Market Segmentation
Geographic Segmentation
Geographic segmentation focuses on dividing markets into different geographic units.

Market Segmentation
Geographic Segmentation Variables
World Region or Country State City or Metro Size Density (Urban and Rural) Climate Topology (Hills and Plains)

Market Segmentation
Demographic Segmentation
Demographic characteristics are commonly used to segment the market. They are mostly used to segment market, because
1. They are easier to measure, and 2. Taste, requirements, need and preferences of consumers largely depends on these demographical variables.

Market Segmentation
Demographic Segmentation Variables
Age Occupation

Gender
Family size Family life cycle Income Marital Status

Education
Religion Social Status Generation Nationality

Market Segmentation
Psychographic Segmentation
Consumers are subdivided into different groups on the basis of personality, lifestyles, thinking and values.

Market Segmentation
Behavioral Segmentation
Dividing the market on the basis of behavioral variables is termed as Behavioral segmentation.
Occasions Benefits User Rates

Loyalty Status

User Status Readiness Stage Attitude Toward the Product

Market Segmentation: Benefits

Helps locate distinctive customer groups within a given market and helps distinguish them from one another.
Facilitate right choice of target market. Helps tailor the marketing offers/programs to suit each group. To discover marketing opportunities.

Market Segmentation: Benefits

Helps concentrate efforts on the most productive and profitable segments, instead of frittering them over irrelevent or unproductive or unprofitable segments. Helpful in facing competition.

Sustainable customer relationship in all phases of customer life cycle

Market Segment Criteria

Measurable
Size, purchasing power, and profile of segment

Requirements for Effective Segmentation

Accessible
Can be reached and served

Substantial
Large and profitable enough to serve

Differentiable
Respond differently

Market Segment Criteria

Actionable
Effective programs can be developed

Requirements for Effective Segmentation

Growing
Provide new opportunities and challenges

Compatible
With firms resources and capabilities