segmentation, targeting, & positioning

Segmentation, Targeting, & Positioning

http://www.pg.com/common/product_sitemap.jhtml


• The marketing program of the firm depends on how the marketer identifies the potential customer , profiles them , targets them and positions his offering in the mind of the customer

• These concepts are studied under STP.



• Segmentation – How one can classify or group the heterogeneous market into homogenous market.

• Targeting – involves including decisions encompassing which market(s) to enter out of the available market segment alternatives.

• Positioning – It’s about the customer perception about the brand as being different from the other brands on specific dimension including product attributes.


Segmentation

• Thus segmentation consists of taking the total heterogeneous market for a product and dividing into several sub-markets or segments.

• Routine example of mousetrap..segmented according to rural and urban areas . Income category and need based segmentation.

Advantages of Segmentation

1. Allows a marketer to take heterogeneous market, consisting of customers with diverse needs, wants and behavior.

2. It also helps in better understanding of the competitive situation in each of the segment.

3. It not only helps in identification of customers with substantial similarity but also helps in profiling them and their need structure so that the marketer can develop an appropriate offer for each identified segment.

Market segmentation & product differentiation

• Market segmentation – it is a process of dividing a market into groups of segments having similar wants.

• Segments may differ also in their needs for information,reassurance,technical support, service promotion ,distribution etc.

Market segmentation & product differentiation

• The marketer can create the product differentiation by bringing a difference in the physical product itself.

• E.g.Gillete shaving gel as compare to cake soap or liquid.

• Dominos pizza – thirty minutes delivery process as compare to other brands.

• Ujala compare to Robin blue.

Bases for market segmentation

• Geographic segmentation – segmentation on the basis of nation , states and regions.

• E.g. – Amul first marketed in Gujrat later on the company went for a national launch.

• For e.g. certain product is famous in South India or North India then it can be again divided into zones , villages , cities , climate etc.


• Demographic Segmentation – it includes factors like age ,gender , family size , family life cycle , income , occupation , education , marital status , religion , generation , nationality , language and social class.

• E.g.Lakme , TVS scooty , diamond jwellery.• Eg. Shaving creams , Bikes , Fair & Handsome• Tv serials..


• Psychographic Segmentation – Is the study of lifestyle of individuals.

• Lifestyle is a person’s entire way of living.• It reflects the person’s living as a combination

of his actions , interests , and opinions.• Fashion industry (clubs) , women's in rural

area.


• Behavioral Segmentation – In this case , the market is divided on the basis of purchase decision and product or brand usage made by consumers.

• Who influence the purchase decision• E.g.- Hospital industry is divided into six parts like – • Most modern hospitals – Escort heart and research

center , Batra hospitals and research center, these hospitals (purchase managers) are constantly on the look for new instruments to become more efficient.


• Autonomous Hospitals – • For e.g. – In all India institute of medical

sciences , the purchase decision is of specialist doctors or the head of the concerned departments.

• Government Hospitals – • For e.g. – KEM Hospital –here the medical

superintendent and the financial controller influence the purchase decision.


• Medium size private hospitals – Hinduja , Hiranandani hospital the final choice is by Medical Director is final.

• Nursing homes – To get these hospitals recognized by the ministry of health, they go for quality , low price and after sales service. Doctors approved generally.

• Freelancing Anesthetist – These people can use their own equipments if they have..


• Marketers segment the market on different basis like –

• Volume segmentation – In this case quantity purchased is the basis for segmentation. It attempts to identify frequent users of a product category or brand.

• For e.g. – Cigarettes , wine and personal care categories.


• Brand user segmentation – The marketer tries to identify the user characteristics on the basis of brand usage as brand users , brand triers and non-users.

• For e.g. – Cadbury by Amitabh Bacchan , Hrithik Roshan for John Player.


• Situation Segmentation – Many marketers are happy with identifying the segments and profiling the segments in context with how customers are experiencing the brand and what is their ultimate way of using the brand.

• For e.g. – A person may select a simple hotel when travelling alone but with family he may book a luxurious resort.

Patterns of Market Segment

• E.g.- Ice cream buyers..• Clustered Preferences – three segments like

one who want to take center position to attract all the people(groups)

• Another is to participate in a large market segment

• Develop several brands in different segment

Patterns of Market Segment

• Homogeneous Preferences – A market where all the consumers have roughly the same preferences.

• Diffused Preferences – consumers preferences may be scattered throughout the space , indicating that consumers vary greatly in the preference.

Market segmentation Strategy

• Customer’s differences in preferences for brand appear to exist.

• These differences can be identified and matched with customer groups.

• The marketing program can help in reaching segments with certain preferences.

• The segments have enough demand potential to justify their selection as a target markets.

• The segments are sufficiently stable to allow adequate lead-time for the design and implementation of a marketing strategy.

Market segmentation process

• Form the Profile the Evaluate Target

• Segment segment


• Forming Market segments – Two approaches are followed –

1. Build up – for B2B or industrial buyers e.g. trade india.com

2. Break down - B2C or individual.For e.g. – cars , personal care products etc.


• Profile segments – marketing managers can profile segments by taking into account a different descriptive variables.

• Profiling helps to large identifiable groups within a market.

• For e.g. By taking into consideration the needs of the buyer, identifying product or service should be given.


• Evaluate market segments – What is expected from each segment should be evaluated..

• For e.g. – Itc products.• Select Target markets – helps the marketer to

correctly identify the markets and the group of target customers for whom the product/services are produced.

• E.g.-woodland shoes , cellular phones ,pepsi , titan ,Bata , Mahindra & Mahindra

Criteria for effective market segmentation

• Distinctive

Substantial

Actionable

AccessibleMeasurable

Identifiable


• Clear differences in consumer preferences for a product must exist.

• Distinctive


• Measurable Identifiable

• Difference preferences for a product must be identifiable and capable of being related to measurable variables.


• Substantia

l

• The proposed market segment must have enough size and purchasing power to be profitable.


• Actionable• Companies must be

able to respond to difference preferences with an appropriate marketing mix.


• Accessible

• The proposed market segment must be readily accessible and reachable with market programs.

Target Market

• Depending on the available resources ,experience and competency of the marketer and time available the marketer will decide which market to target.

• In this stage the marketing manager evaluates different market opportunities and decides how many and which one to target. This is called as target marketing

Target Market

• The marketing manager should look at five factors for evaluating each segment .They are-

1. Segment size & 2. Segment worthiness3. Segment measurability4. Segment attractiveness5. Segment accessibility.

Types of target marketing strategies

• The product market coverage strategies are broadly classified as –

1. Undifferentiated or mass marketing strategy2. Concentrated marketing strategy3. Differentiated marketing strategy


1. Undifferentiated or mass marketing strategy• Here the marketing manager ignores the idea

of segment characteristics and differences and develops a unified marketing program for the entire market.

• This strategy keeps overall cost low and makes it easier to manage.

• E.g. commodity market (whole sale market)


2. Concentrated marketing strategy – • The marketing manager decides to enter into a

select market segment instead of all the available market segment.

• It is an excellent strategy for small manufacturers that can serve the segments closely and cater the needs.

• E.g. Jyothi laboratories brand of Ujala predominant in south India and then a national launch


3. Differentiated marketing strategy – • The main objective of offering a differentiated

marketing offer is to cater to different segments and get higher sales with a dominant position in each of the segment.

• For e.g. – Maruti 800 for middle class , Baleno and swift targeted for upper middle class and Omni for lower class or taxi operators.

Positioning

• The marketing manager needs to decide which segment to enter and how to target that segment with a product offer through selection of market segment and target marketing strategy.

• The challenge is to decide what position the company wants it’s products to occupy in the selected segment.

Positioning

• A product positioning is the definition that a consumer gives to the product on important attributes.

• Positioning is the act of developing the company’s offerings and image to occupy a distinct place in the minds of the target market.

• The end result of positioning strategy is a distinct value-a reason for which the customer would buy the product.

Positioning

• E.g. – Maggi Noodles , Dove soap , Vicks Vaporub etc.

Product positioning VS. Brand positioning

• In a commodity market hardly there is a difference between a product and brand positioning.

• Same with candles,iscense sticks etc.• Product positioning brings us to the idea of

functional value whereas• Brand positioning talks about some thing

above for which customer is willing to pay.

Product positioning VS. Brand positioning

• Whirlpool vs.Samsung.• When a new brand comes to the market

people start enquiring.• E.g.Tata DOCOMO.

Qualities of a successful position

In context with Ujala-• Relevance• Distinctiveness• Coherence• Commitment• Durability• Clarity• CourageAnother examples are Tata Nano , Dell etc.

The brand positioning process

• Two categories –

• Do good Feel Good Margo Lux Dettol Dove


• Identify a set of possible competitive advantage – • Positioning process begins with differentiating

the product on actual attributes so that customer will receive the higher value.

• Reliance industries In telecommunication – Launch a GSM Technology with CDMA

• Company’s offering sholuld be differentiated on the basis of product , service , channel , people , image.


• E.g – DHL position themselves as reliable and firms with capabilities of speedy and accurate delievery.

• Eureka Forbes and Amway are the examples of channel differentiation

• To groom customers and tell them to give the service is an example of people differentiation

• Kodak – Red and yellow , Wipro – with rainbow and the catch line ‘applying Thought’is an image differentiation.


• Choose the right Competitive advantage – • The next step is to select a right competitive

advantage which is most suitable for positioning the brand.

• E.g. Samsung – Nano technology , biofresh.


• Select an overall positioning Strategy – Consumers will buy the product or service which give them highest value.

• E.g. Raymonds , Kaya skin clinic , Dominos


• Communicate the message and deliver the chosen position –

• Communicate to the target market• E.g. Pepsi , coke , Rasna?


• Rasna is comparatively failure product as compare to other cold drinks..

• Horliks - Konkana sen• Boost – Sachin tendulkar• Postioned properly.

Assignment

• Zhandu balm is available in the market if company wants to plan to reposition it what options are available. Suggest at least three.

segmentation, targeting, & positioning

Documents

market segmentation

positioning segmentation

volume segmentation

based segmentation

homogenous market

patterns of market segment

large market segment

total heterogeneous