Segmentation and Positioning

The New Generation Marketing Text!
Learning Outcomes
• Describe the principles of market segmentation and
the STP process.
• Explain the characteristics of and differences
between market segmentation and product
differentiation.
• Explain how market segmentation can be undertaken
in both consumer and business-to-business markets.
• Describe different targeting strategies.
• Explain the concept of positioning.
•
• Illustrate how the use of perceptual maps can assist

the positioning process.
Marketing: Asian Edition © Oxford University Press 2013. All rights reserved
Case Insight – Adani Wilmar

Limited
 Adani Wilmar Limited (AWL) is one of the
largest edible oil turned integrated agri-based
company.
 AWL tasted success with its flagship brand
Fortune.
 After a successful stint with sunflower oil and
regional oil variants, the company launched
‘Fortune Plus’, which is targeted at fitness
freaks.
 By getting into the premium category after
the launch of Fortune Plus, does the company
risk losing touch with its traditional customer
base?
STP Process
 Method by which whole markets are subdivided into

different segments
 Three activities that should be undertaken, usually

sequentially, if segmentation is to be successful:
 Segmentation
 Targeting
 Positioning
STP Process
Benefits of STP Process

Enhancing a company’s competitive position
by providing direction & focus for marketing
strategies.
Examining and identifying market growth

opportunities through identification of new
customers, growth segments or new product
uses.
More effective and efficient matching of

company resources to targeted market
segments promising the greatest ROI.
Market Segmentation
Market segmentation is the division of a market into
different groups of customers with distinctly similar
needs and product/service requirements.
Purpose of market segmentation:

 Leverage scarce resources.
 To ensure that the elements of the marketing mix are
designed to meet particular needs of different
customer groups.
 Allows organisations to focus on specific customers
needs in the most efficient and effective way.
Marketing Segmentation
Market Segmentation and Product Differentiation
Process of Market Segmentation

There are two main approaches to segmenting
markets:
Breakdown Method: Adopts the view that the
market is considered to consist of customers
which are essentially the same, so the task is to
identify groups which share particular
differences.
Build-Up Method: Considers a market to consist

of customers that are all different, so here the
task is to find similarities.
Process of Market Segmentation
The aim is to identify segments where:

identifiable differences exist between segments
(segment heterogeneity).
similarities exist between members within each
segment (members homogeneity).
Segmenting Consumer Markets

Segmentation Bases/Criteria
Profile Criteria - Who my market are and where

are they?
Behavioural Criteria - Where, when, and how does

my market behave?
Psychological Criteria - Why does my market

behave that way?
Marketing: Asian Edition Source: Integrated Marketing Communications in Advertising and Promotion © (AISE, 7thUniversity
Oxford Press 2013. All rights reserved
edn. by Shimp
(2007). Reprinted with permission of South-Western, a division of Thomson Learning
Kantar Media -TGI Lifestage

Segmentation Groups
Source: Reproduced with kind permission of Kantar Media
Segmenting Business Markets
Organizational Characteristics
Buyer Characteristics
Decision Making Unit
Policy factors
Purchasing strategies
Attitudes towards vendors and toward risk
Choice Criteria
What specifications of product/service they
choose
Purchase Situation
Structure of the purchasing procedures
Type of buying situation
Stage in the purchase decision process
Targeting
To determine which, if any, of the segments uncovered

should be targeted
Evaluation of Market Segments – DAMP
 Distinct – is each segment clearly different from other
segments?
 Accessible – can buyers be reached through
appropriate promotional programmes and distribution
channels?
 Measurable – is the segment easy to identify and
measure?
 Profitable – is the segment sufficiently large to provide
a stream of constant future revenues and profits?
Segment Attractiveness Factors
Rating approach for different segment attractiveness

factors:
 Market growth
 Segment profitability
 Segment size
 Competitive intensity within the segment
 Cyclical nature of the industry
Each of these attractiveness factors is rated on a

scale of 0-10 and loosely categorized as high,
medium or low in attractiveness.
Targeting Approaches
Positioning
The act of designing the company’s offering and image
so that they occupy a meaningful and distinct
competitive position in the target customers’ minds.
Two fundamental elements:

 Physical attributes – the functionality and capability that a brand
offers.
 Communication – the way in which a brand is communicated and
how consumers perceive the brand relative to other competing
brands in the market place.
Positioning Strategies
Repositioning Strategies
The following four ways outline how to approach repositioning a product,
depending on the individual situation facing a brand. In some cases, a brand
might need to be adapted before relaunch.
 Change the tangible attributes and then communicate the new

proposition to the same market.
 Change the way a product is communicated to the original market.
 Change the target market and deliver the same product.
 Change both the product (attributes) and the target market.
Summary
Described the principles of market segmentation and

the STP process.
Explained the characteristics and differences
between market segmentation and product
differentiation.
Explained how market segmentation can be
undertaken in both consumer and business-to-
business markets.
Described different targeting strategies.
Explained the concept of positioning.
Illustrated how the use of perceptual maps can assist
the positioning process.

Segmentation and Positioning

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The New Generation Marketing Text!

• Illustrate how the use of perceptual maps can assist

Case Insight – Adani Wilmar

 Method by which whole markets are subdivided into

 Three activities that should be undertaken, usually

Benefits of STP Process

Examining and identifying market growth

More effective and efficient matching of

Purpose of market segmentation:

Process of Market Segmentation

Build-Up Method: Considers a market to consist

Process of Market Segmentation

The aim is to identify segments where:

Segmenting Consumer Markets

Profile Criteria - Who my market are and where

Behavioural Criteria - Where, when, and how does

Psychological Criteria - Why does my market

Segmenting Consumer Markets

Segmenting Consumer Markets

Kantar Media -TGI Lifestage

Segmenting Business Markets

To determine which, if any, of the segments uncovered

Segment Attractiveness Factors

Rating approach for different segment attractiveness

Each of these attractiveness factors is rated on a

Two fundamental elements:

 Change the tangible attributes and then communicate the new

 Change the way a product is communicated to the original market.

 Change the target market and deliver the same product.

 Change both the product (attributes) and the target market.

Described the principles of market segmentation and

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