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Unit III
Identifying Market Segment
S TE P
Positioning
Targeting &
Evaluating
Marketing Strategy
Segmentation
Objective
• Summarize the relationship between market segmentation, targeting
and positioning
• The advantage of segmentin...
Why do this?
Overview
Market Segmentation
• Process of dividing the total market into several
homogeneous groups
• A market segment is a portion...
Market Segmentation
Bases for Segmenting Consumer Markets
Geographic
Demographic
Age, gender, family size
and life cycle, ...
Geographic Segmentation
• Divide overall market by location
• Divide markets into different
geographic units.
• Examples:
...
Demographic Segmentation
– Divide overall market by
• Age and Life-cycle Stage
• Life Stage
• Gender
• Income
• Generation...
Age and Life-Cycle Stage
Wants and abilities change with age.
Life stage defines a person’s major concern
Gender
Women:
Influence 80% of consumer purchases
Make 75% of new home decisions
Purchase 60% of cars
Men and women have d...
Income
Income segmentation is used in
categories such as clothing, travel,
financial services, and automobiles
Generation
Silent Generation (1925-1945) Baby
Boomers (1946-1964)
Gen X (1964-1978)
Millennial’s (Gen Y) – (1979-1994)
- 7...
Race and Culture
Different ethnic and cultural segments have sufficiently
different needs and wants
Psychographic Segmentation
 Personality traits
 Lifestyle
 Values
Divides population into groups that have similar psy...
Behavioral Segmentation
User and Usage
Needs and Benefits
Decision Roles
Initiator
Influencer
DeciderBuyer
User
Usage occa...
Behavioral Segmentation
• Occasion
– Special promotions &
labels for holidays.
– Special products for
special occasions.
•...
Loyalty Status Segmentation
Switchers
Shifting loyals
Split loyals
Hard-core
Consumer Attitudes
Enthusiastic Positive Indifferent Negative Hostile
Brand Funnel
User & Loyalty Status Segmentation
• Size, purchasing power, profiles
of segments can be measured.
• Segments can be effectively
reached and served.
• Segmen...
Bases for Segmenting B2B Markets
Demographic
Operating Variables
Purchasing Approach
Situational Factors
Personal Characte...
• https://www.cia.gov/library/publications/the-
world-factbook/geos/in.html
Target Market
Targeting involves the process of evaluating each segments
attractiveness and selecting one or more segments...
Market Targeting
Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable
• Segment Size and Growth Potential
– Sales, profitability and growth rates
• Segment Structural Attractiveness
– Competit...
Market Targeting
Porter’s Five Force
Rivals
New
Entrants
Substitute
Products
Buyer
Power
Supplier
Power
Rivals
New
Entrant...
Evaluating and Selecting Segments
Individual marketing
Full market coverage
Multiple segment
specialization
Single-segment...
Patterns of Target Market Selection:
Product x Market Matrices
Levels of Segmentation
– Ignores segmentation opportunities
– firms that produce only 1 product or 1 product
line AND market it to all customers
...
Differentiated (Segmented)
Marketing
– Targets several segments
and designs separate offers
for each.
– firms that produce...
Niche Marketing
– firm may choose to focus on satisfying a
smaller target market rather than attempting
to market its prod...
• targeting potential customers at a very basic level (i.e.: by zip codes,
specific occupations, lifestyles or individual ...
Positioning
• Positioning is arranging for a product to occupy a clear, distinctive and desirable
place relative to compet...
Means of Differentiation
Employees
Channels
Image
Services Product
Design
Quality
Additional Services
Price
Positioning Strategies
• Attribute Positioning – Allahabad bank
• Benefit Positioning – ICICI bank
• Use/Application Posit...
Brand Positioning
• Customer wants and needs
• Company capabilities
• Competitive actions
Quality
Price
Brand A
B
C
D
E
F
G
Points of Parity / Difference
Points of Parity
POP
Points of Difference
PODattribute or benefit associations that are
not ...
Positioning errors
• Under positioning
– Me too a brand in crowd
• Over positioning
– Projecting high attributes - apple
•...
In-class Activity
• Describe how each of the following brands,
companies, or products is positioned:
In-class Activity, Part 2
• Choose one of the companies/brands and…
– Identify relevant direct competitors
– Choose the tw...
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ajaykumarta-Unit 3 market segmentation, targeting & positioning - copy

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  1. 1. Unit III Identifying Market Segment
  2. 2. S TE P Positioning Targeting & Evaluating Marketing Strategy Segmentation
  3. 3. Objective • Summarize the relationship between market segmentation, targeting and positioning • The advantage of segmenting a market • Requirement for effective segmentation • Identify and describe the major variables for consumer segmentation • Outline how companies select target markets and implement segmentation strategies • Frequently used market segment targeting approaches
  4. 4. Why do this? Overview
  5. 5. Market Segmentation • Process of dividing the total market into several homogeneous groups • A market segment is a portion of a larger market in which the individuals, groups or organizations share one or more characteristics that cause them to have relatively similar product needs
  6. 6. Market Segmentation Bases for Segmenting Consumer Markets Geographic Demographic Age, gender, family size and life cycle, or income Psychographic Social class, lifestyle, or personality Behavioural Occasions, benefits sought, user status, usage rate, loyalty Nations, states, regions or cities
  7. 7. Geographic Segmentation • Divide overall market by location • Divide markets into different geographic units. • Examples: – World Region or Country: North America, Western Europe, European Union, Pacific Rim, Mexico, etc. – Country Region: Pacific, Mountain, East Coast, etc. – City or Metro Size: Bangalore, NewDelhi – Population Density: rural, suburban, urban – Climate: northern, southern, tropical, semi-tropical Geoclustering combines geographic data with demographic data
  8. 8. Demographic Segmentation – Divide overall market by • Age and Life-cycle Stage • Life Stage • Gender • Income • Generation • Race and Culture • Use Differences in: • Most frequently used segmentation variable – Ease of measurement and high availability. • Usually the worst variable to use.
  9. 9. Age and Life-Cycle Stage Wants and abilities change with age. Life stage defines a person’s major concern
  10. 10. Gender Women: Influence 80% of consumer purchases Make 75% of new home decisions Purchase 60% of cars Men and women have different attitudes and behaviors due in part to genetics and socialization
  11. 11. Income Income segmentation is used in categories such as clothing, travel, financial services, and automobiles
  12. 12. Generation Silent Generation (1925-1945) Baby Boomers (1946-1964) Gen X (1964-1978) Millennial’s (Gen Y) – (1979-1994) - 78 Million people - > 25000 Rs annual spending power Develop products and services that uniquely meet the particular interests or needs of a generational target.
  13. 13. Race and Culture Different ethnic and cultural segments have sufficiently different needs and wants
  14. 14. Psychographic Segmentation  Personality traits  Lifestyle  Values Divides population into groups that have similar psychological character, values, and lifestyles People in the same demographic classification often have very different lifestyles and personalities
  15. 15. Behavioral Segmentation User and Usage Needs and Benefits Decision Roles Initiator Influencer DeciderBuyer User Usage occasions User status Usage rate Buyer-readiness Loyalty status
  16. 16. Behavioral Segmentation • Occasion – Special promotions & labels for holidays. – Special products for special occasions. • Benefits Sought – Different segments desire different benefits from the same products. • Loyalty Status – Hard-core – Split loyals – Shifting loyals – Switchers • Usage Rate – Light, medium, heavy.
  17. 17. Loyalty Status Segmentation Switchers Shifting loyals Split loyals Hard-core
  18. 18. Consumer Attitudes Enthusiastic Positive Indifferent Negative Hostile
  19. 19. Brand Funnel
  20. 20. User & Loyalty Status Segmentation
  21. 21. • Size, purchasing power, profiles of segments can be measured. • Segments can be effectively reached and served. • Segments are large or profitable enough to serve. Measurable Accessible Substantial Differential Actionable • Segments must respond differently to different marketing mix elements & programs. • Effective programs can be designed to attract and serve the segments. Requirements for Effective Segmentation
  22. 22. Bases for Segmenting B2B Markets Demographic Operating Variables Purchasing Approach Situational Factors Personal Characteristics Industry, company size, location Technology, user status, customer capabilities Power structure, nature of existing relationship Urgency, specific application, size of order Buyer-seller similarity, loyalty, risk attitude
  23. 23. • https://www.cia.gov/library/publications/the- world-factbook/geos/in.html
  24. 24. Target Market Targeting involves the process of evaluating each segments attractiveness and selecting one or more segments to enter
  25. 25. Market Targeting Effective Segmentation Criteria Measurable Substantial Accessible Differentiable Actionable
  26. 26. • Segment Size and Growth Potential – Sales, profitability and growth rates • Segment Structural Attractiveness – Competition, substitute products, – buyers & supplier power, new entrants (Porter’s Five Forces) • Company Objectives and Resources – Core competencies – “What business do we want to be in?” Evaluating Market Segments
  27. 27. Market Targeting Porter’s Five Force Rivals New Entrants Substitute Products Buyer Power Supplier Power Rivals New Entrants Substitute Products Buyer Power Supplier Power
  28. 28. Evaluating and Selecting Segments Individual marketing Full market coverage Multiple segment specialization Single-segment concentration
  29. 29. Patterns of Target Market Selection: Product x Market Matrices
  30. 30. Levels of Segmentation
  31. 31. – Ignores segmentation opportunities – firms that produce only 1 product or 1 product line AND market it to all customers – Offers one product or service to the entire market – Salt, sugar, steel etc., Undifferentiated (Mass) Marketing
  32. 32. Differentiated (Segmented) Marketing – Targets several segments and designs separate offers for each. – firms that produce numerous products w/ dif marketing mixes designed to satisfy smaller segments – Coca-Cola (Coke, Sprite, Diet Coke, etc.) – Procter & Gamble (Tide, Cheer, Gain, Dreft, etc.) – Toyota (Camry, Corolla, Prius, Scion, etc.)
  33. 33. Niche Marketing – firm may choose to focus on satisfying a smaller target market rather than attempting to market its product offerings to an entire market – Targets one or a couple small segments – Niches have very specialized interests
  34. 34. • targeting potential customers at a very basic level (i.e.: by zip codes, specific occupations, lifestyles or individual households) • Tailoring products and marketing programs to suit the tastes of specific individuals and/or locations. Micromarketing
  35. 35. Positioning • Positioning is arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the mind of the consumer • The act of designing a company’s offering and image to occupy a distinctive place in the minds of the target market. • EXAMPLE: To (target segment and need) our (brand) is (concept) that (point-of-difference)
  36. 36. Means of Differentiation Employees Channels Image Services Product Design Quality Additional Services Price
  37. 37. Positioning Strategies • Attribute Positioning – Allahabad bank • Benefit Positioning – ICICI bank • Use/Application Positioning - Vicks • User Positioning – Horlicks • Competitor Positioning – IIPM against IIM • Category positioning – Category leader - Dove • Quality/Price Positioning – Tata Nano, Oberoi Hilton • Corporate identity – Itc, Reliance • Brand Endorsement – Titan
  38. 38. Brand Positioning • Customer wants and needs • Company capabilities • Competitive actions Quality Price Brand A B C D E F G
  39. 39. Points of Parity / Difference Points of Parity POP Points of Difference PODattribute or benefit associations that are not necessarily unique to the brand attributes or benefits that consumers strongly associate with a brand
  40. 40. Positioning errors • Under positioning – Me too a brand in crowd • Over positioning – Projecting high attributes - apple • Confused Positioning – Frequent reposition makes consumer confuse • Doubtful positioning – Brand name & manufacturer problems
  41. 41. In-class Activity • Describe how each of the following brands, companies, or products is positioned:
  42. 42. In-class Activity, Part 2 • Choose one of the companies/brands and… – Identify relevant direct competitors – Choose the two dimensions that are most important to consumers – Develop a perceptual positioning map – Are there any opportunities in this category?

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