marketing management chapter 09

8/9/2019 Marketing Management Chapter 09

1/21

SHH Kazmi, 2007

Excel BooksMarketing Management Text and Cases,S H H Kazmi9-1

Market Segmentation, Targeting & Positioning

Marketing Management Text and Cases

Excel Books9-1

Market

Segmentation,Targeting &

Positioning

9Chapter


2/21

SHH Kazmi, 2007



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.


3/21

SHH Kazmi, 2007



Requirements for Effective SegmentationFive conditions must exist for segmentation to be meaningful:

1. A marketer must determine whether the market is heterogeneous. If theconsumers product needs are homogeneous, then it is senseless tosegment the market.

2. There must be some logical basis to identify and divide the population intorelatively distinct homogeneous groups, having common needs orcharacteristics and which will respond to a marketing programme.Differences in one market segment should be small compared todifferences across various segments.

3. The total market should be divided in such a manner that comparison ofestimated sales potential, costs, and profits of each segment can be done.

4. One or more segments must have enough profit potential that would justifydeveloping and maintaining a marketing programme.

5. It must be possible to reach the target segment effectively. For instance, insome rural areas in India, there are no media that can be used to reach thetargeted groups. It is also possible that paucity of funds prohibits thedevelopment required for a promotional campaign.


4/21

SHH Kazmi, 2007



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.


5/21

SHH Kazmi, 2007



Bases for SegmentationAsegmentation 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 includegeographic 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.


6/21

SHH Kazmi, 2007



Segmentation Variables

Region Nation

Urban, Rural State

City size Climate

Terrain Market density

Geographic variables

Gender Family size

Age Occupation

Race Family life cycle

Religion Income

Social class Education

Demographic variables

Personality attributes

Motives

Lifestyle

Psychographic variables

Usage volume, Occasion

End use

Benefits sought

Brand loyalty

Price sensitivity

Behaviouristic variables


7/21

SHH Kazmi, 2007



Geographic Segmentation

Geographic segmentation focuses on dividing markets into different geographic

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


8/21

SHH Kazmi, 2007



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.


9/21

SHH Kazmi, 2007



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

called psychographic segmentation.


10/21

SHH Kazmi, 2007



Behaviouristic Segmentation

Dividing 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.


11/21


12/21

SHH Kazmi, 2007



Segmentation Variables for

Organisational Markets

Main approaches to segment organisational markets can be grouped under

four heads:

Geographic Location

Customer Size

Product Use

Type of Organisation

Buying Behaviour and Situation


13/21

SHH Kazmi, 2007



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.


14/21

SHH Kazmi, 2007



Segment Attractiveness and Business

Strength FactorsThe attractiveness of a market segment can be evaluated based on the

companys current business strength and market potential assessment.


15/21

SHH Kazmi, 2007



Product PositioningProduct positioningis 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.


16/21

SHH Kazmi, 2007



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


17/21

SHH Kazmi, 2007



The Process of Determining the

Positioning Strategy

Steps Need to be Taken to Reach a Decision about Positioning

Identify Competitors

Assessment of Consumers Perceptions of Competition

Determining Competitors Position

Analysing the Consumers Preferences

Making the Positioning Decision


18/21

SHH Kazmi, 2007



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.


19/21

SHH Kazmi, 2007



How Many Differences to Promote?Successful positioning depends on effectively communicating the brands

differential advantage.

AUSP is an outstanding advantage and the best strategy to create a products

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


20/21

SHH Kazmi, 2007



Positioning Errors

Underpositioning

Overpositioning

Confused positioning

Doubtful positioning


21/21

marketing management chapter 09

Documents