MARKET SEGMENTATION,

TARGETING, AND

POSITIONING

Principles of Marketing – Outcome 2

Objectives

What is marketing segmentation? What is a market segment?

Benefits and importance of market segmentation

Bases of segmentation

What is targeting? Selecting a targeting strategy

What is positioning? Product positioning

Steps in positioning strategy

What is Market Segment?

A market segment is a sub-set of a market

made up of people or organizations with one or

more characteristics that cause them to

demand similar product and/or services based

on qualities of those products such as price or

function.

Market Segment

What is a market segment? Market segment

refers to a large identifiable group within a

market with similar wants, purchasing power,

geographical location, buying attributes, or

buying habits.

What is Market Segmentation?

Market segmentation is

the analysis of total demand in a market into

its constituent (basic) parts,

so that sets of consumers, with distinctive

needs and behaviors patterns, can be

identified.

Benefits and Importance of Market

Segmentation

Market segmentation facilitates the

matching of products with consumer

needs.

This gives satisfaction to consumers and

higher sales and profit to the marketing firm.

Benefits and Importance of Market

Segmentation

A firm can concentrate its efforts on most

productive/ profitable segments of the total

market due to segmentation technique.

Thus market segmentation facilitates the

selection of the most suitable market.

Benefits and Importance of Market

Segmentation

It also enables the marketer to utilize the

available marketing resources effectively

as the exact target group is identified at the

initial stage only.

Benefits and Importance of Market

Segmentation

A firm can avoid the markets which are

unprofitable and irrelevant for its marketing

purpose and concentrate on certain

promising segments only.

Benefits and Importance of Market

Segmentation

Advertising media can be more effectively

used because only the media that reach the

segments can be employed.

Benefits and Importance of Market

Segmentation

Market segmentation offers special benefits to

small firms.

The resources available with them are limited

as they are comparatively new in the market.

Bases of Segmenting the

Market

The common methods of segmentation are:

1. Geographic Segmentation

2. Demographic Segmentation

3. Psychographic Segmentation

4. Behavioral Segmentation

Geographic Segmentation

It calls for dividing market size into

different geographical units such as:Region

City

Density

Climate: Marketers take advantage of location by

selling suntan lotion in Hawaii, fur coats in Alaska,

etc.

Demographic Segmentation

It is dividing the market size into groups on

the basis of variable such as:

Age

Education

Family Size

Religion

Gender

Nationality

Income

Occupation

Psychographic Segmentation

Buyers are divided into

different groupsLifestyle

Personality Characteristics

Social Status

Behavioral Segmentation

Buyers are divided into groups on the basis of their knowledge of, attitude toward use of or response to a produce. Occasions - Regular, Special

Benefits - Quality , Economy

User Status - Non-user, Ex-user, Potential user, First

time user, Regular user

Usage Rate - Light user, Medium user, Heavy user

Loyalty Status - None, Medium, Strong,

Readiness Stage - Unaware, Aware, Informed, Interested,

& Intending to buy

Attitude towards Product - Enthusiastic(eager), Positive,

Indifferent, Negative,

What is Targeting?

It involves selecting which segment to serve.

Target Market involves breaking a market into

segments and then concentrating your

marketing efforts on one or a few key

segments.

Target Market: A set of buyers sharing

common needs or characteristics those the

company decides to serve.

Selecting a Target Strategy

1. Undifferentiated Marketing

2. Differentiated Marketing

3. Concentrated Marketing

Undifferentiated Marketing

Undifferentiated Marketing (Mass Marketing) –

a market coverage strategy in which a firm

decides to ignore market segment

differences and go after the whole market

with one offer.

Undifferentiated Marketing

Undifferentiated products are products that

are so similar to one another that the

majority of consumers do not differentiate

between them. Examples would be milk,

paper, and gas. Companies selling these

products typically use price and availability to

compete with one another.

Differentiated Marketing

Differentiated Marketing – a market coverage

strategy in which a firm decides to target

several market segments and designs

separate offer for each.

Procter and Gamble practicing Differentiated Marketing

Concentrated Marketing“Niche Marketing”.

Concentrated Marketing – a market coverage

strategy in which a firm goes after a large

share of one or a few submarkets.

Positioning

Positioning: The process by which marketers

try to create an image or identity in the minds

of their target market for its product, brand, or

organization.

Product Positioning

Product Positioning: refers to the way in which the product or service is presented to the market.

The factors in positioning the products could be: performance, quality, packaging, price, characteristics, and more.

Example: Toyota is positioned on economy.

Mercedes and Cadillac on luxury.

Porsche and BMW on performance.

Volvo positioned on safety.

In all the above four stated examples, the product is car. But each company is positioning their product in a different way.

Product Positioning

Some other products and how they are

positioned in the market:-

Dettol Soap: - Antiseptic soap,

Maggie noodles: - Instant food,

Dove: - Beauty soap,

Pepsi: - soft drink for fun,

Diet Pepsi: - less sugar

Hummer 4WD:- Power and rough terrain,

Air India Express: - low price

Review

What is marketing segmentation? What is a market segment?

Benefits and importance of market segmentation

Bases of segmentation

What is targeting? Selecting a targeting strategy

What is positioning? Product positioning

Steps in positioning strategy

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