2. 3RD UNIT SYLLABUS
Concept of Market Segmentation, Benefits, Requisites of Effective
Segmentation, Bases for Segmenting Consumer Markets, Market
Segmentation Strategies. Targeting - Bases for identifying target
Customer target Marketing strategies, Positioning - Meaning, Product
Differentiation Strategies, Tasks involved in Positioning. Branding -
Concept of Branding, Types, Brand Equity, Branding strategies.
3. SEGMENTATION
Segmentation is the process of classifying customers into
groups which share some common characteristic
A marketing strategy in which a large, heterogeneous
market is broken down into small, more homogeneous
segments, and a separate marketing program is developed
for each segment.
According to Philip kotler , “ Market segmentation is sub-
dividing a market into distinct and homogeneous subgroups
of customers, where any group can conceivably be selected
as a target market to be met with distinct marketing mix.”
4. STAGES OF MARKETING
Mass marketing
Product-variety marketing
Target marketing
Micromarketing
Customized marketing
5. ADVANTAGES OF SEGMENTATION
The process of breaking up a homogeneous market into
heterogeneous segments forces the marketer to analyse
and consider both the needs of the market and the
company’s ability to competently serve those needs –
thereby making the company better informed about its
customers
Competitor offerings and marketing positioning must also
be analysed in this context so the company must consider
what its competitive advantages and disadvantages are,
helping it to clarify its own positioning strategy
Limited resources are used to best advantage, targeted at
those segments that offer the best potential
6. LEVELS OF MARKET SEGMENTATION
Mass Marketing
Same product to all consumers
(no segmentation)
Segment Marketing
Different products to one or more segments
(some segmentation)
Micromarketing
Products to suit the tastes of individuals and locations
(complete segmentation)
Niche Marketing
Different products to subgroups within segments
(more segmentation)
Local Marketing
Tailoring brands/ promotions
to local customer groups
Individual Marketing
Tailoring products/ programs
to individual customers
7. FACTORS INFLUENCING SEGMENTATION
Size, objectives and resources of the
company
Type of product and market
Competitive structure of the industry
Life cycle stage
Competitive strategy of firm
9. GEOGRAPHIC SEGMENTATION
Division of the market based on the location of
the target market
People living in the same area have similar
needs and wants that differ from those living in
other areas
Climate
Population density
Taste
Micromarketing
10. DEMOGRAPHIC SEGMENTATION
Partitioning of the market based on factors such as
age
gender
marital status
Income
Social class
Family size
occupation
education
ethnicity
11. PSYCHOGRAPHIC SEGMENTATION
Dividing buyers into different groups based on social
class, lifestyle, values, beliefs and personality
characteristics
Marketers use it to further refine a target market
Its appeal lies in the vivid and practical profiles of
consumer segments that it can produce
Accomplished by using AIO inventories
AIO research seeks consumers’ responses to a large
number of statements that measure
Activities
Interests
Opinions
12. BEHAVIOUR SEGMENTATION
Buyers are divided into groups based on their
knowledge, attitude, and use or response to a
product
The best starting point for building market segments
occasions
Types
Special occasion segmentation
Benefits sought
User status
Usage rate
Loyalty status
Buyer readiness stage
13. REQUIREMENTS FOR EFFECTIVE SEGMENTATION
• Size, purchasing power, profiles
of segments can be measured.
• Segments must be effectively
reached and served.
• Segments must be large or
profitable enough to serve.
Measurable
Accessible
Substantial
Differential
Actionable
• Segments must respond
differently to different marketing
mix elements & actions.
• Must be able to attract and serve
the segments.
14. STEPS IN THE SEGMENTATION PROCESS
Determine Market Boundaries
Decide which Segmentation Bases to Use
Analyze (Consider) Segmentation Data
Develop a Profile of Each Segment
Target the Segments to be Served
Design a Marketing Plan
15. BASIS FOR SEGMENTATION OF INDUSTRIAL
PRODUCTS
Size of the industry
Small scale, medium scale & large scale industry
Geographical location
End use
Buyer behavior/ motivation or purchase
criteria
Benefits sought
16. TARGET MARKET
A market is a set of all actual and potential
buyers
A target market is a group of people toward
whom a firm markets its goods, services, or
ideas with a strategy designed to satisfy their
specific needs and preferences.
Any marketing strategy must include a
detailed (specific) description of this.
17. ADVANTAGES OF TARGET MARKETING
Easier analysis of potential and actual
consumers
Tailoring of products to market
Assessment of demand potential
Identify competing products
Increased sales effectiveness and cost
efficiencies
Product positioning and easy identification of
opportunities
18. DISADVANTAGES OF TARGET MARKETING
Increased marketing costs
Personalization can become burdensome to
manage
Faux segmentation may be viewed cynically
Narrow segmentation can impact brand loyalty
Ethics and stereotyping issues
19. BASIS FOR IDENTIFYING TARGET CUSTOMERS
Market Factors
Segment Size
Segment Growth rate
Price sensitivity
Customer Barging
power
Supplier Bargaining
Power
Entry Barriers
Exit Barriers
Company
Factors
Nature of
competitiveness
New Entrants
Competitive
differentiation
Macro Factors
Political Issues
Social Trends
Environmental
Issues
Market Attractiveness Firms
Capability
Exploitable
Marketing Assets
Cost Advantage
Technological
Edge
Managerial
capabilities
Commitment
22. IMPORTANT FACTORS IN TARGET MARKET
Ethical Issues of target market
Segment interrelationships & super
segments
Mega Marketing
Gradual Invasion
Inter segment cooperation
23. POSITIONING IN THE MARKET PLACE
What is Positioning?
- It is the act of designing the company’s offering and
image to occupy a distinctive place in the target market’s
mind.
- Positioning is not what you do to the product
- Positioning is what you do to the mind of the
prospect
24. POSITIONING IN THE MARKET PLACE
Examples
Crest toothpaste
Promotes its anti-cavity protection
Mercedes
Promotes its great engineering
BMW
Ultimate driving machine
Attribute can be single or even multiples
25. IMPORTANCE OF POSITIONING
Putting the product in pre determined orbit
Connects product offerings with target
market
Providing competitive advantage
Better serving and covering the market
Providing space to brand through positioning
26. CHOOSING AND IMPLEMENTING A POSITIONING
STRATEGY
Identifying a set of possible competitive
advantages upon which to build a position
Selecting the right competitive advantages
Effectively communicating and delivering the
chosen position to a carefully selected target
market
27. DEVELOPING A POSITIONING STRATEGY
Positioning possibilities:
Attribute positioning
Benefit positioning
Use or application positioning
User positioning
Competitor positioning
Product category positioning
Quality or price positioning
Which Positioning to Promote?
28. Positioning
28
1. ATTRIBUTE POSITIONING
- Positioning on attribute
Size
No of years in existence
Culture
Disneyland
Positioned as the largest manmade park in the world
Dove soap
Contains moisturizing cream
POSITIONING IN THE MARKET PLACE
29. 29
2. BENEFIT POSITIONING
Positioned as a leader in certain benefit
McDonald’s
Positioned as a family restaurant (QSCV)
Honda
Economy and reliability
BMW
Ultimate driving machine
Volvo
Safety and Durability.
POSITIONING IN THE MARKET PLACE
30. 30
3. USE / APPLICATION POSITIONING.
Positioning for some use or application
Nestle ‘Maggi Noodles’
Positioned as a snack item
Between meals
Fast to cook, good to eat
Nestle Milkmaid
Positioned as a base for dessert preparation.
POSITIONING IN THE MARKET PLACE
31. 31
4. USER POSITIONING
Positioning the product as best for some user
group.
‘Red and white’ cigarettes
Positioned for people who are bold and brave
Give ‘bravery’ awards.
POSITIONING IN THE MARKET PLACE
32. 32
5. COMPETITOR POSITIONING
Product claims to have better performance than
competitors
Brooke Bond Taj Mahal Tea
Endorsed by Zakir Hussain
“If you find a better tea than Taj Mahal, then Zakir Hussain will stop
playing Tabla.
Directly or indirectly refer competitors.
POSITIONING IN THE MARKET PLACE
33. 33
6. PRODUCT CATEGORY POSITIONING
Positioning as a leader in certain category.
Maruti 1000
Launched in 1990
Only luxury car in India
Positioned as ‘ultimate in luxury’
Hero Honda
Four Stroke, fuel efficiency
Claimed as the leader in fuel efficiency
Fill it, shut it, forget it
Livon
After hair wash oil
Smooth and silky hair
POSITIONING IN THE MARKET PLACE
34. 34
7. QUALITY OR PRICE POSITIONING
Positioning as offering the best scooters
Bajaj Scooters
Lowest prices
You just cannot beat a Bajaj
Repositioned as ‘Hamara Bajaj’
POSITIONING IN THE MARKET PLACE
35. Four major positioning errors
1. Under positioning
2. Over positioning
3. Confused positioning
4. Doubtful positioning
ERRORS IN POSITIONING
36. POSITIONING IN THE MARKET PLACE
What to avoid
1. Under positioning
Seen as just another entry in a crowded market
Pepsi introduces its clear crystal Pepsi 1993
Customer not impressed
“Clarity” not seen as an important benefit
37. POSITIONING IN THE MARKET PLACE
2. Over positioning
- Narrow image of the brand
- Trying to widen
- Customer do not accept this
- Maruti Baleno
Customers think Maruti can make cars up to 5
lacs
Not higher end
Image issue
Poor sales
38. POSITIONING IN THE MARKET PLACE
3. Confused Positioning
Company making too many claims
Dettol Soap
Started as Beauty soap
Did not click
Repositioned as Anti bacterial soap
Finally clicked
39. POSITIONING IN THE MARKET PLACE
4. Doubtful Positioning
Find it to difficult believe in what company claims
Maruti 1000
- Launches in ’89
- Positioned as ‘ultimate in luxury’
- Only luxury car
- Launch of Esteem in ’94
- More luxurious than Maruti 1000
- Is it now ‘Ultimate in luxury
- Sales dipped
- Customer confused
- Repositioned as ‘Affordable luxury’
40. TASKS INVOLVED IN POSITIONING
Competitors
identification
Determining
how
competitors
are
perceived
and
evaluated
Determining
the
competitors
position
Analyzing
customers
preference
Making the
positioning
decision
Monitoring
the position
41. BRAND
A brand is a name, term, sign, symbol or
design, or a combination of them, intended to
identify the goods or services of one seller or
group of sellers and to differentiate them
from those of competitors.
42. ROLE OF BRANDS
Identifies the maker
Simplify product handling
Organize accounting
Offer legal protection
Signify quality
Creates barrier to entry
serve as competitive advantage
Secure price premium
44. BRAND EQUITY
Brand equity is the added value endowed
on products and services, which may be
reflected in the way consumers, think, feel,
and act with respect to the brand.
45. BRAND ADVANTAGES
Improved perceptions of product performance
Greater loyalty
Less vulnerability to competitive marketing
actions
Less vulnerability to crises
Larger margins
More inelastic consumer response
Greater trade cooperation
Increased marketing communications
effectiveness
Possible licensing opportunities
46. BRAND PROMISE
A brand promise is the marketer’s vision of
what the brand must be and do for
consumers.