Market Segmentation,

Targeting & Positioning

 Umer Farooq Roll # 81
(GL) Roll #03
 Ayesha Ismail Roll # 90
 Saleem Arif Roll # 41
 Mamoona Abrar Roll # 89
 M.Imran Roll #51
 Nadia Shoukat Roll # 14
 Tanzeela Aziz
 Learning Objectives

 Market Segmentation
 Target Marketing
 Market Positioning
 Major bases for segmenting
consumer & business markets.
 Learning Objectives
 How companies identify attractive
market segment & choose a target
marketing strategies.

 How companies position their products

for maximum competitive advantage in
the market place.
 Market Segmentation

Tanzeela Aziz
MBA2005-14
Market Segmentation

Dividing a market into smaller

groups of buyers with distinct
needs , characteristics ,or
behavior who might require
separate products or marketing
mixes.
 Target Marketing

The process of evaluating each

market segment’s
attractiveness and selecting
one or more segments to
enter.
 Market Positioning

Arranging for a product to

occupy a clear, distinctive and
desirable place relative to
competing products in the
minds of target consumers.
 Segmenting Consumer
Markets
 The major variables that might be
used in segmenting consumer
market are

 Geographic
 Demographic
 Psychographic
 Behavioral
 Geographic
Segmentation

Dividing a market into

different geographical units
such as nations , states,
regions, cities or
neighborhoods.
 Geographic
Segmentation
 World region or Country:-
Pakistan, India, America etc.
 Country Regions:-
 Cities:-
 Density:-
Urban, suburban, rural.
 Climate:-
Northern, southern.
 Demographic
Segmentation

Dividing a market into group

based on demographic
variables such as age, sex,
family size, family life cycle,
income, occupation, education,
religion, race & nationality.
 Demographic
Segmentation
 The consumer needs, wants & usage
rates often vary closely with
demographic variables.
 Easier to measure
 Even when market segments are
defined on some other bases their
demographic characteristics must be
known.
 Age & life-cycle
segmentation
Dividing a market into different age
& life-cycle groups.

Different age groups are

under 6 6-11 12-19 20-34
35-49 50-64 65+
Family Life-cycle Groups

 Bachelors
 Married with no children
 Married with children
 Older couples
 Gender Segmentation

Dividing a market into different

groups based on gender.
 Income segmentation

Dividing a market into

different income groups

 Lower income group

 Middle income group
 Upper class
 Segmenting Variables
Psychographic Segmentation

Behavioral Segmentation

Using Multiple Segmentation

Bases

Ayesha Ismail
MBA2005-03
 Psychographic
Segmentation

Dividing the market into

groups according to social
class, life style or
personality
characteristics.
 Lifestyle

 Achievers
 Strivers

 Survivors
 Social Class

 Lower lowers  Upper lowers

 Working class
 Middle class
 Upper middles
 Upper uppers  Lower uppers
 Personality

 Compulsive
 Authoritarian

 Gregarious

 Ambitious
 Behavioral
Segmentation

Dividing the market into

groups on the basis of
consumer knowledge,
attitude, use or response
to a product.
Behavioral Segmentation
 Occasion  Benefit
Segmentation Segmentation
 User Status  Usage Rates

 Loyalty Status  Readiness

 Attitude Stage
Towards
Product
Occasion Segmentation

Dividing the market into

groups according to
occasions when buyers get
the idea to buy, actually
make their purchases, or
use the purchased item.
 Benefit Segmentation
Dividing the market into groups
according to the different
benefits that consumers seek
from the product.

 Procter &Gamble has identified different

detergent segments.
 User Status

Dividing the market into the

groups according to user status .

 Non-users
 Ex-users
 Potential users
 First time users
 Regular users
 Usage Rates
Market can be segmented
according to usage rate.

 Light
 Medium
 Heavy

 Fast food industry has heavy users only

20% but eat up about 60% of all food
served.
 Loyalty Status

Market can be segmented

according to consumer
loyalty.

Consumers can be loyal to

 Brands
 Stores
 Companies
 Loyalty Status

Consumer can be grouped on the

basis of loyalty as

 Somewhat loyal
 Completely loyal
 Non loyalty
 Using Multiple
Segmentation Bases
 One good example of multi-variable
segmentation is “Geodemographic”.
 One of the leading life style
segmentation is the “PRIZM” they
collect the transaction data and life
style information to paint the precise
picture of consumer and its needs.
 Segmenting Business Markets

Segmenting International Markets

Requirement for Effective

Segmentation

M. Saleem Arif
MBA2005-90
 Segmenting Business
Markets
Major variables used for segmenting
business markets are:
 Demographic
1. Industry: Which industries should we
serve?
2. Company size: What size companies
should we serve?
3. Location: What geographical location
should we serve?
 Segmenting Business
markets (contd.)
 Operating Variables
4. Technology: What customer technologies should
we focus on?
5. User or nonuser status: Should we serve heavy
users, medium users, light users, or nonusers?
6. Customer capabilities: Should we serve
customers needing many or few services?
 Segmenting Business
markets (contd.)
 Purchasing Approaches

7. Purchasing-function organization: Should we serve

companies with highly centralized or decentralized
purchasing organizations?
8. Power structure: Should we serve companies that
are engineering dominated, financially dominated,
and so on?
9. Nature of existing relationships: Should we serve
companies with which we have strong relationships
or simply go after the most desirable companies?
10. General purchase policies: should we serve
companies that? Service contacts? Systems
purchases? Sealed bidding?
11. Purchasing criteria: should we serve companies
that are seeking quality? Service? Price?
 Segmenting business
Markets (contd.)
Situational Factors
12. Urgency: Should we serve companies
that need quick sudden delivery or
service?
13. Specific application: Should we focus
on certain applications of our product
rather than all applications?
14. Size of order: Should we focus on
large or small orders?
 Segmenting Business
Markets (contd.)
Personal Characteristics
15. Buyer-seller similarity: should we serve
companies whose people and values are
similar to ours?
16. Attitudes toward risk: Should we serve
risk-taking or risk-avoiding customers?
17. Loyalty: Should we serve companies that
shoe high loyalty to their suppliers?
 Almost every company serves at
least some Business Markets.

 American Express

Many companies set up separate

system for dealing with larger or
multiple location customers.

 Exxon Mobile
 IBM
 Segmenting
International
Markets
Companies can Segment
International Market using one
or a combination of several
variables.

 Geographic Location
 Economic Factors
 Cultural Factors
 Political & Legal Factors
 Requirement for
effective segmentation

 Measurable: the Size, Purchasing

Power and Profiles of the
Segment can be measured.

 Accessible: the market Segments

can be Effectively reached and
served.
 Substantial: The market
Segments are large or Profitable
enough to serve.

 Differentiable: The Segments are

Conceptually distinguishable.

 Actionable: Effective Program can

be designed for attracting and
serving the segments.
 Target Marketing

Mamoona Abrar
MBA2005-41
 Target Marketing

The process of evaluating each

market segment’s
attractiveness & selecting
one or more segments to
enter
 Evaluating Marketing
Segments

 Segment size and growth

 Segment structural attractiveness

 Company objectives and resources

 Target Market

A set of buyers sharing common

needs or characteristics that
the company decides to serve
 Levels of Target
Marketing

 Undifferentiated Marketing

 Differentiated Marketing

 Concentrated Marketing
 Undifferentiated
Marketing

A market-coverage strategy in
which a firm decides to ignore
market segment differences
& go after the whole market
with one offer.
Differentiated Marketing

A market-coverage strategy in
which a firm decides to target
several market segments and
designs separate offers for
each.
American Express

 Green cards
 Gold cards
 Corporate cards
 Black cards
Concentrated Marketing

A market coverage strategy in

which a firm goes after a
large share of one or a few
segments or niches.
 Micro Marketing

M. Imran
MBA2005-89
Connect with the customer
who is ready to connect with
you.
 Micro Marketing

The practice of tailoring

products and marketing
programs to the needs and
wants of specific individuals
and local customer groups.
Types of Micromarketing

 Local Marketing

Tailoring brands and promotion to the

needs and wants of local customer
groups cities, neighborhoods, and
specific stores.
 Local Marketing
 Drawbacks

 Can drive up manufacturing and marketing

cost by reducing economies of scale.
 Create logistics problems as companies try
to meet the varied requirements of different
regional and local market.
 Brand’s overall image my be diluted if the
product and message vary at different
localities.
 Local Marketing

 Benefits

 Helps a company to market more

effectively in the face of pronounced
regional and local differences in
demographics and style.
 Meets the needs of company's first-line
customer.
 Individual Marketing

Tailoring products and

marketing programs to needs
and preference of individual
customer also labeled as
markets of-one, customized
marketing and one-to-one
marketing.
 Mass Customization

Mass customization is the process

through which firms interact one-to-
one with masses of customers to
create customer-unique value by
designing products and services
tailor-made to individual needs.
 Choosing a Target-
Marketing Strategy
requires consideration of :

 Company resources
 The degree of product variability
 Products life-cycle stage
 Market variability
 Competitors’ marketing strategies
 Socially Responsible
Target Marketing

 Some segments are at special risk :

• Children
• Inner-city minorities consumers
• Internet shoppers
 Controversy occurs when the
methods used are questionable.
 Positioning for
Competitive Advantage

Nadia Shoukat
MBA2005-51
 Positioning

The way the product is defind

by consumers on important
attributes ---- The place the
product occupies in
consumers’ minds relative to
competing products.
 Positioning Maps

Positioning maps are a useful tool

for giving you a graphical idea of
where your product stands vis-à-
vis other products in the market
at a given time.
 Positioning Map: Large Luxury
SUVs
Range rover
High Lincoln Navigator
Escalade
Hummer H1
Hummer H2
Price Lexus LX470 Land Cruiser

Low

Luxury Performance

Orientation
 Choosing a Positioning
Strategy
The positioning task consist of three
steps.

 Identify Possible Competitive

Advantages
 Choosing the Right Competitive
Advantages
 Selecting an overall Positioning
Strategy
 Identify Possible
Competitive Advantages
An advantage over competitors gained
by offering consumers greater value
either through lower prices or by
providing more benefits that justify
higher prices.
 A company or market offer can be differentiated along
the lines of Product, Services, Channels, People or
Image
 Choosing the Right
Competitive Advantages
 How many differences to promote?

Unique Selling Proposition :USP

USP is to promote only one benefit to

the target market for each brand
and stick to it.
 Positioning Errors to
Avoid
 Under positioning:-Buyers have only a
vague idea of the brand.

 Over Positioning:-Buyers may have

too narrow an image of the brand.

 Confused Positioning:- Leaving buyers

with a confused image of a company.
 Choosing the Right
Competitive Advantages
 Which differences to promote?
 A company should carefully select the way in which
it will distinguish itself from competitors.
 A difference is worth establishing to the extent that
it satisfied the following criteria.

 Important  Distinctive
 Superior  Communicable
 Preemptive  Affordable
 Profitable
 POSITIONING

Selecting An Overall
Positioning Strategy

M. Umar Farooq
MBA2005-81
 Value Proposition

The full Positioning of a brand.

In simpler words, the full mix

of benefits upon which a
brand is positioned.
Possible
Value
Price
Propositions
More The Same Less
More More for More
Less The Same More for More the Same for Less

The Same
for Less
i f e ne B
st

Less for
Much
Less
 More for More
Proposition

Providing the most upscale

product or service and
charging a higher price to
cover the higher costs.
 More for The Same
Proposition

Providing a brand offering

comparable or even better
quality to that of competitor/s’
upscale one but at a Lower or
The Same Price.
 The Same for Less
Proposition

Providing equivalent quality

products at a Lower Price.
 Less for Much Less
Proposition

Providing lower performance

or quality products as
required by the consumers at
a Much Lower Price.
 More for Less
Proposition

Providing even better or the

best products or services
compared to the competitor/s
at Lower or the Lowest
Prices.
Developing a Positioning

Statement
A Positioning Statement summarizes
company or brand positioning by targeting
the segment, developing a need, delivering
the brand name and its concept, and
pointing out the competitive advantage or
difference.
 Communicating and
Delivering
the Chosen Position
Keeping a permanent channel to
Communicate the desired position to
target consumers and taking actions in
order to Deliver the position the
company wants to build relative to
competing products.