SESSION 2: Marketing Segmentation, Targeting Designing different products

and Positioning and services to meet the needs

of different target groups.
MARKET SEGMENTATION
3. Niche marketing
An entrepreneurial marketing strategy designed
primarily to divide the market into small When a company focuses its
segments with distinct needs, characteristics or efforts on a limited segment in
behavior . (Kotler & Armstrong, 2014) the market.

Variables can be used for segmentation: 4. Individualized marketing

1. Geographic segmentation segmented Involves customizing offers

based on provinces, regions, cities, and, in some cases, products
principles municipalities. that fit individual needs.
Considerations: climate, dominant
MARKET TARGETING
ethnic group, culture, density (rural or
urban) or classification of the Refers to a concept in marketing which helps the
geographical units (1st class, 2nd class) marketers to divide the market into small units
comprising of likeminded people
2. Demographic segmentation based on
demographics. Considerations: gender, TARGET MARKET SELECTION PROCESS
age, income, occupation, education,
religion, family size. This is the most
widely used and easiest method for
segmentation.

3. Psychological segmentation MARKET TARGETING: Selection Process

segmented based on what the
customers believe or think. Step 1 Identify The Appropriate Targeting
Considerations: Needs and wants, Strategy
attitude, social class, personality traits, The strategy used to select a target
knowledge and awareness, brand market is affected by target market
concept, lifestyle. characteristics, products attributes, and the
4. Behavioral segmentation organizations objectives and resources
Considerations: perceptions, THREE BASIC TARGETING STRATEGIES (Strategy-
knowledge, reactions, benefits, loyalty, Description-Example)
responses.
Undifferentiated
Forms of Market Segmentation:
Sending the same promotional message
1. Mass marketing
to everyone
Marketing of a product to the Promoting the city as a historic
entire market with no destination by placing ads in widely read
differentiation at all. newspaper

2. Segment marketing Concentrated

 Designing a promotional message that 2. Type of Organization
communicates the benefits desired by a
Company segments a market by
single specific segment
types of organizations within
Promoting the city as historic by
that market because they often
targeting elderly members of historical
require different product
societies by placing ads in their
features, distribution systems,
newsletters
price structures, and selling
Differentiated strategies

Designing more than one promotional 3. Customer Size

message, with each communicating
An organizations size may affect
different benefits
its purchasing procedures and
Also targeting families by
the types and quantities of
communicating a promotional message
products it wants.
about the importance of children
learning history 4. Product Use

Step 2 Determine Which Segmentation Certain products, particularly

Variables to Use raw materials like steel,
petroleum, plastics, and lumber,
Segmentation variables are the characteristics of
can be used in numerous ways in
individuals, groups, or organizations used to
the production of goods.
divide a market into segments
Step 3 Develop Market Segment Profiles

A market segment profile describes the

similarities among potential customers within a
segment and explains the differences among
people and organizations un different segments.

Step 4 Evaluate Relevant Market Segments

After analyzing the market profiles, a marketer

should be able to narrow his or her focus to
several promising segments that warrant further
analysis.

Marketers should examine the

Segmentation Variables for Business Markets following:

1. Geographic Location A. Sales Estimates

Demand for some consumer Market Potential

products can vary considerably
The total amount of a
among geographic areas
product that customers
because of differences in
will purchase within a
climate, terrain, or regional
specified period at a
customer preferences.
 specific level of serve customers needs and achieve its
industry-wide objectives.
marketing activity.
To select a target market, it is essential for
Company Sales Potential the organizations to study the following
factors:
The maximum
percentage of market Always remember you would never be
potential that an successful if you try to impress everyone.
individual firm within an
EXAMPLE OF TARGETING:
industry can expect to
obtain for a specific Why do people use soaps ?
product.
Some would use it against body odor
B. Competitive Assessment
Some would use it to fight germs and
Identifying your competitors and infections
evaluating their strategies to determine
their strengths and weaknesses relative Some for a fair and spotless skin
to those of your own product or service In the above case the product is same but
. A competitive analysis is a critical part the needs of the individuals are different.
of your company marketing plan. Consumers have different reasons as to why
C. Cost Estimates they use soaps.

Marketers also must consider whether Target Audience 1

the organization can reach a segment at Against body odour - Soaps with a strong
costs equal to or below competitors and lasting fragrance.
costs. If the firms costs are likely to be
higher, it will be unable to compete in Marketing professionals
that segment in the long run. Sales Representatives
Step 5 Select Specific Target Market People exposed to sun for a
Selecting appropriate target markets is longer duration
important to an organizations effective Individuals travelling by public
adoption and use of the marketing transport
concept philosophy.
Target Audience 2
Identifying the right target market is the
key to implementing a successful To fight germs and infections - Soaps
marketing strategy. with medicinal properties

Failure to do so can lead to low sales, Individuals working in hospitals,

high costs, and severe financial losses. nursing homes and research
centres
A careful target market analysis places
an organization in a strong position to Individuals working in
unhygienic conditions
 Target Audience 3
For a whiter skin - Soaps which improve
the skin tone of individuals.
Teenagers
College students
Target Audience 4
For a younger looking skin - Soaps which
help get rid of wrinkles and fine lines of
ageing
Individuals between age group
30 50 years or above
Individuals with identical
requirements form the target
audience. A 20-year-old girl
cant be targeted along with
someone who is 50 years old.
MARKET POSITIONING
The process of creating an image of a
product in the minds of the consumers is
called as positioning.
Positioning helps to create first
impression of brands in the minds of
target audience.
In simpler words positioning helps in
creating a perception of a product or
service amongst the consumers.
Seven (7) approaches to positioning
strategies:
1. Using Product characteristics or
Customer Benefits as a positioning
strategy
This strategy basically focuses upon the
characteristics of the product or customer
benefits. For example, if I say Imported items
it basically tell or illustrate a variety of
product characteristics such as durability,
economy or reliability etc. Lets take an
example of motorbikes some are
emphasizing on fuel economy, some on
power, looks and others stress on their
durability. Hero Cycles Ltd. positions first,
emphasizing durability and style for its cycle.
2. Pricing as a positioning strategy
Lets take an example and understand this
approach just suppose you have to go and
buy a pair of jeans, as soon as you enter in
the shop you will find different price rage
jeans in the showroom say price ranging
from 500 pesos to 2000 pesos. As soon as
look at the jeans of 500 pesos you say that it
is not good in quality. Why? Basically
because of perception, as most of us
perceive that if a product is expensive will be
a quality product whereas product that is
cheap is lower in quality. If we look at this
Price quality approach it is important and
is largely used in product positioning. In
many product categories, there are brands
that deliberately attempt to offer more in
terms of service, features or performance.
They charge more, partly to cover higher
costs and partly to let the consumers believe
that the product is, certainly of higher
quality.
3. Positioning strategy based on Use or
Application
Lets understand this with the help of an
example like Nescafe Coffee in European
countries for many years positioned itself as
a winter product and advertised mainly in
winter but the introduction of cold coffee
has developed a positioning strategy for the
summer months also. Basically this type of
positioning-by-use represents a second or
third position for the brand, such type of
positioning is done deliberately to expand
the brands market. If you are introducing
 new uses of the product that will
automatically expand the brands market.
4. Positioning strategy based on Product
Process
Another positioning approach is to associate the
product with its users or a class of users. Makes
of casual clothing like jeans have introduced
designer labels to develop a fashion image. In
this case the expectation is that the model or
personality will influence the products image by
reflecting the characteristics and image of the
model or personality communicated as a product
user. Lets not forget that Johnson and Johnson
repositioned its shampoo from one used for
babies to one used by people who wash their
hair frequently and therefore need a mild people
who wash their hair frequently and therefore
need a mild shampoo. This repositioning
resulted in a market share.
5. Positioning strategy based on Product
Class
In some product class we have to make sure
critical positioning decisions for example,
freeze dried coffee needed to positions itself
with respect to regular and instant coffee
and similarly in case of dried milk makers
came out with instant breakfast positioned
as a breakfast substitute and virtually
identical product positioned as a dietary
meal substitute.
6. Positioning strategy based on Cultural
Symbols
In todays world many advertisers are using
deeply entrenched cultural symbols to
differentiate their brands from that of
competitors. The essential task is to identify
something that is very meaningful to people
that other competitors are not using and
associate this brand with that symbol. Air India
uses maharaja as its logo, by this they are trying
to show that we welcome guest and give them
royal treatment with lot of respect and it also
highlights Indian tradition. Using and
popularizing trademarks generally follow this
type of positioning.
7. Positioning strategy based on
Competitors
In this type of positioning strategies, an
implicit or explicit frame of reference is one
or more competitors. In some cases,
reference competitor(s) can be the
dominant aspect of the positioning
strategies of the firm, the firm either uses
the same of similar positioning strategies as
used by the competitors or the advertiser
uses a new strategy taking the competitors
strategy as the base. A good example of this
would be Colgate and Pepsodent. Colgate
when entered into the market focused on to
family protection but when Pepsodent
entered into the market with focus on 24-
hour protection and basically for kids,
Colgate changed its focus from family
protection to kids teeth protection which
was a positioning strategy adopted because
of competition.
Using Product characteristics or Customer
Benefits as a positioning strategy
Steps To Product Positioning
1. Know your target audience well
It is essential for the marketers to first
identify the target audience and then
understand their needs and preferences.
Every individual has varied interests, needs
and preferences. No two individuals can
think on the same lines
2. Know what your customers expect out
of you.
The products must fulfill the demands of the
individuals
 3. Identify the product features
The marketers themselves must be well aware of
the features and benefits of the products. It is
rightly said you cant sell something unless and
until you yourself are convinced of it.
A marketer selling Nokia phones should himself
also use a Nokia handset for the customers to
believe him.
4. Unique selling Propositions
Every product should have USPs; at least some
features which are unique. The organizations
must create USPs of their brands and effectively
communicate the same to the target audience.
The marketers must themselves know what best
their product can do.
Find out how the products can be useful to the
end-users?
Why do people use Anti Dandruff Shampoo?
Anti-Dandruff Shampoos are meant to get rid of
dandruff. This is how the product is positioned in
the minds of the individuals.
USP of a Nokia Handset - Better battery backup.
USP of Horlicks Foodies - Healthy snack
Communicate the USPs to the target audience
through effective ways of advertising. Use
banners, slogans, inserts and hoardings.
Let individuals know what your brand offers for
them to decide what is best for them.
5. Know your competitors
A marketer must be aware of the competitors
offerings. Let the individuals know how your
product is better than the competitors? Never
underestimate your competitors.
Let the target audience know how your product
is better than others.
The marketers must always strive hard to have
an edge over their competitors.
6. Ways to promote brands
Choose the right theme for the advertisement.
Use catchy taglines.
The advertisement must not confuse people.
The marketer must highlight the benefits of the
products.
7. Maintain the position of the brand
For an effective positioning it is essential for the
marketers to continue to live up to the
expectations of the end - users.
Never compromise on quality.
Dont drastically reduce the price of your
products.
A Mercedes car would not be the same if its price
is reduced below a certain level.
A Rado watch would lose its charm if its price is
equal to a Sonata or a Maxima Watch.
MARKETING POSITIONING STRATEGY
A positioning strategy is a deliberate
branding plan or process that operates
on the symbolic levels of consumer
consciousness, where meanings and
associations even of individual words
really hold weight.
A market positioning strategy is built on
business data and seeks to compose the
precise chain of words to balance
concepts of differentiation, distinction,
and similarity in a unified brand-
narrative. It is a long-term effort to
solidify the identity of a company, and its
products or services, in a unique space
within the minds of the target audience.
It is an organized attempt for a brand to
set itself apart from the crowd and
 influence the way their target audience
perceives them.

It could be about its unique feature or

performance that the competitors
cannot precisely match or about its
affordability at an acceptable quality.
Whatever is the positioning strategy, it
must be measured in terms of the target
markets perception about its product or
brand.

A good tool to use for measuring the

perception of target market is
perceptual mapping.

Using the multi-variate technique called

Multi-Dimensional Scaling (and its
variants Multi-Dimensional Unfolding or
Correspondence Analysis), the
perception of target market about the
attributes of the different brands
(through survey questionnaire) can be
measured on a two-dimensional space
(perceptual map). This can aid marketers
in understanding how they are being
positioned by their target market. This
could also be the basis for developing
the proper strategy to correct ones
position, if it is not the desired one.

MARKET SEGMENTATION, TARGETING

AND POSITIONING PROCESS