chapter 9 market segmentation, targeting & positioning-marketing management

Dr S.L Gupta9-1

Market Segmentation, Targeting & Positioning

9-1


9Chapter

Dr S.L Gupta9-2


Market segmentation is the process of dividing the total market into relatively

distinct homogeneous sub-groups of consumers with similar needs or

characteristics that lead them to respond in similar ways to a particular

marketing programme.

A market segment is a portion of a larger market in which the individuals,

groups, or organisations share one or more characteristics that cause them to

have relatively similar product needs.

Dr S.L Gupta9-3


Requirements for Effective SegmentationFive conditions must exist for segmentation to be meaningful:1. A marketer must determine whether the market is heterogeneous. If the consumers’ product needs are homogeneous, then it is senseless to segment the market. 2. There must be some logical basis to identify and divide the population into

relatively distinct homogeneous groups, having common needs or characteristics and which will respond to a marketing programme. Differences in one market segment should be small compared to differences across various segments.3. The total market should be divided in such a manner that comparison of estimated sales potential, costs, and profits of each segment can be done.4. One or more segments must have enough profit potential that would justify

developing and maintaining a marketing programme.5. It must be possible to reach the target segment effectively. For instance, in

some rural areas in India, there are no media that can be used to reach the targeted groups. It is also possible that paucity of funds prohibits the

development required for a promotional campaign.

Dr S.L Gupta9-4


How Segmentation HelpsSegmentation studies are used to uncover needs and wants of specific groups

of consumers for whom the marketer develops especially suitable products

and services to satisfy their needs.

Dr S.L Gupta9-5


Bases for SegmentationA segmentation variable is a characteristic of individuals, groups or

organisations that marketers use to divide and create segments of the total

market.

Segmentation descriptors fall under four major categories and include

geographic variables, demographic variables, psychographic variables,

and behaviouristic variables.

Geographic variables focus on where the customers are located.

Demographic variables identify who the target customers are.

Psychographic variables refer to lifestyle and values.

Behaviouristic variables identify benefits customers seek, and product

usage rates.

Dr S.L Gupta9-6


Segmentation Variables

Region Nation Urban, Rural State

City size Climate

Terrain Market density

Geographic variables

Gender Family size Age Occupation Race Family life cycleReligion IncomeSocial class Education

Demographic variables

Personality attributesMotivesLifestyle

Psychographic variables

Usage volume, OccasionEnd useBenefits soughtBrand loyaltyPrice sensitivity

Behaviouristic variables

Dr S.L Gupta9-7


Geographic SegmentationGeographic segmentation focuses on dividing markets into different geographic

units, such as regions, nations, states, urban, rural, etc.

Dr S.L Gupta9-8


Demographic SegmentationDemographic characteristics are commonly used to segment the market.

Factors such as age, sex, education, income, marital status, household life

cycle, family size, social class, etc., are used singly, or in a combination, to

segment a market.

Dr S.L Gupta9-9


Psychographics SegmentationWhen segmentation is based on personality or lifestyle characteristics, it is called psychographic segmentation.

Dr S.L Gupta9-10


Behaviouristic SegmentationDividing the market on the basis of such variables as use occasion, benefits

sought, user status, usage rate, loyalty status, buyer readiness stage and

attitude is termed as behaviouristic segmentation.

Dr S.L Gupta9-11


Demographic-Psychographics Segmentation (Hybrid Approach)Demographic and psychographic profiles work best when combined together

because combined characteristics reveal very important information about

target markets.

Dr S.L Gupta9-12


Segmentation Variables for Organisational MarketsMain approaches to segment organisational markets can be grouped under

four heads:

Geographic Location

Customer Size

Product Use

Type of Organisation

Buying Behaviour and Situation

Dr S.L Gupta9-13


Targeting Market SegmentsInstead of aiming a single product and marketing programme at the mass

market, most companies identify relatively homogeneous segments and

accordingly develop suitable products and marketing programmes matching

the wants and preferences of each segment.

Dr S.L Gupta9-14


Segment Attractiveness and Business Strength FactorsThe attractiveness of a market segment can be evaluated based on the

company’s current business strength and market potential assessment.

Dr S.L Gupta9-15


Product PositioningProduct positioning is a decision reached by a marketer to try to achieve a

defined brand image relative to competition within a market segment. Product

positioning decisions are strategic decisions and have an impact on long-term

success of the brand.

Dr S.L Gupta9-16


Common bases used for positioning include:

Features

Benefits

Usage

Parentage

Manufacturing process

Ingredients

Endorsements

Comparison

Pro-environment

Product class

Price/quality

Country or geographic area

Dr S.L Gupta9-17


The Process of Determining the Positioning StrategySteps Need to be Taken to Reach a Decision about Positioning

Identify Competitors

Assessment of Consumers’ Perceptions of Competition

Determining Competitor’s Position

Analysing the Consumers’ Preferences

Making the Positioning Decision

Dr S.L Gupta9-18


Writing a Positioning Statement or a Value PropositionIt is a statement expressed clearly and in few words that identifies the target

market for which the product is intended. It also specifies the product

category in which it competes and highlights the unique benefit it offers.

Dr S.L Gupta9-19


How Many Differences to Promote? Successful positioning depends on effectively communicating the brand’s

differential advantage.

A USP is an outstanding advantage and the best strategy to create a product’s

position, provided it is not only persuasive for the consumers but also

sustainable.

Dr S.L Gupta9-20


Positioning Errors Underpositioning

Overpositioning

Confused positioning

Doubtful positioning

Dr S.L Gupta9-21


Some popular positioning approaches are:

Positioning by Corporate Identity

Positioning by Brand Endorsement

Positioning by Product Attributes and/or Benefits

Positioning by Use Occasion and Time

Positioning by Price-Quality

Positioning by Product Category

Positioning by Product User

Positioning by Competitor

Repositioning

chapter 9 market segmentation, targeting & positioning-marketing management

Documents

gupta market segmentation

total market

psychographic segmentation

mass market

market segmentsinstead

larger market

segmentation descriptors

positioning requirements