Dr S.L Gupta9-1
Market Segmentation, Targeting & Positioning
9-1
Market Segmentation, Targeting & Positioning
9Chapter
Dr S.L Gupta9-2
Market Segmentation, Targeting & Positioning
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.
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Market Segmentation, Targeting & Positioning
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.
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Market Segmentation, Targeting & Positioning
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.
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Market Segmentation, Targeting & Positioning
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.
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Market Segmentation, Targeting & Positioning
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
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Market Segmentation, Targeting & Positioning
Geographic SegmentationGeographic segmentation focuses on dividing markets into different geographic
units, such as regions, nations, states, urban, rural, etc.
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Market Segmentation, Targeting & Positioning
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.
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Market Segmentation, Targeting & Positioning
Psychographics SegmentationWhen segmentation is based on personality or lifestyle characteristics, it is called psychographic segmentation.
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Market Segmentation, Targeting & Positioning
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.
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Market Segmentation, Targeting & Positioning
Demographic-Psychographics Segmentation (Hybrid Approach)Demographic and psychographic profiles work best when combined together
because combined characteristics reveal very important information about
target markets.
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Market Segmentation, Targeting & Positioning
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
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Market Segmentation, Targeting & Positioning
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.
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Market Segmentation, Targeting & Positioning
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.
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Market Segmentation, Targeting & Positioning
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.
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Market Segmentation, Targeting & Positioning
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
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Market Segmentation, Targeting & Positioning
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
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Market Segmentation, Targeting & Positioning
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.
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Market Segmentation, Targeting & Positioning
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.
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Market Segmentation, Targeting & Positioning
Positioning Errors Underpositioning
Overpositioning
Confused positioning
Doubtful positioning
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Market Segmentation, Targeting & Positioning
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