Course Code: 20AU0024

Title of the Course: Principles of Marketing

Management
 Unit 2
Segmentation, Targeting and Positioning
 Marketing Strategy

Segmentation Targeting Positioning

 Step 1. Market Segmentation
• Market segmentation divides a market into well-defined slices
• Buyers in any market differ in their wants, resources, locations, buying
attitudes, and buying practices.
• Through market segmentation, companies divide large,
heterogeneous markets into smaller segments that can be reached
more efficiently and effectively with products and services that match
their unique needs.
 What is a Market Segment?
A market segment consists of a group of customers who share a similar
set of needs and wants.
Segmenting Consumer Markets
Geographic
Geographic

Demographic
Demographic

Psychographic
Psychographic

Behavioral
Behavioral
 Segmenting Consumer Markets
• Geographic segmentation Dividing a market into different
geographical units, such as nations, states, regions, counties, cities, or
even neighborhoods.

Nations Regions States

Counties Climate Cities

Population
Neighborhoods density (urban,
suburban, rural)
Identify the type of segmentation Mc Donald’s has adopted?
 Segmenting Consumer Markets Contd…
• Demographic segmentation Dividing the market into segments based
on variables such as age, life-cycle stage, gender, income, occupation,
education, religion, ethnicity, and generation.

Stage in the
Gender Age Income
Life Cycle

Occupation Education Religion Ethnicity

Generation Family Size Birth Order Race

Bank Al Habib targets
senior citizens
Mc Donald’s
Happy Meal
targets
children
 Segmenting Consumer Markets Contd…
• Psychographic segmentation- is the science of using psychology and
demographics to better understand consumers
• Dividing a market into different segments based on lifestyle or
personality characteristics.

Personality Lifestyle Social Class

• Nike utilizes psychographic segmentation to target customers
based on lifestyle, personality, activities and interests.
• Specifically, Nike aims to active individuals who take pleasure in
sports, gym regularly, are athletes and passionate with sports,
which tend to be part of their life
 Segmenting Consumer Markets Contd…

• Behavioral segmentation- Dividing a market into segments based on

consumer knowledge, attitudes, uses of a product, or responses to a
product.
 Decision Roles
People play five roles in a buying decision

User
Buyer
Decider
Influencer
Initiator
 Decision Roles Contd…
• Wife initiates a purchase by requesting a new treadmill for her
birthday
• The husband may then seek information from many sources,
including his best friend who has a treadmill and is a key influencer in
what models to consider
• After presenting the alternative choices to his wife, he purchases her
preferred model.
• Which ends up being used by the entire family-

Identify who plays which role in this context?

 Behavioural Variables
Many marketers believe variables related to various aspects of users are good starting
points for constructing market segments
 Behavioural Variables Contd…
• Occasions- Campbell’s advertises its soups more heavily in the cold
winter months.
• Benefits Sought- Everyday Fitness buyers want only very basic fitness
tracking. So Fitbit’s simplest device, the Fitbit Zip, offers these
consumers.
• User Status- Markets can be segmented into nonusers, ex-users,
potential users, first-time users, and regular users of a product.
• Usage Rate- Markets can also be segmented into light, medium, and
heavy product users
• Loyalty Status- A market can also be segmented by consumer loyalty.
 Requirements for Effective Segmentation

Measurable Accessible Substantial Differentiable Actionable

• The size, • The market • Segments are • The segments • Effective
purchasing segments can large or are programs can
power, and be effectively profitable conceptually be designed
profiles of the reached and enough to distinguishable for attracting
segments can served serve. and respond and serving
be measured differently to the segments.
different
marketing mix
elements and
programs.
 Step 2. Targeting

After dividing the market into segments, it’s time to answer the first
seemingly simple marketing strategy- Which customers will the
company serve?

Market targeting (or targeting) consists of evaluating each

market segment’s attractiveness and selecting one or more market
segments to enter
 Evaluating Market Segments

• In evaluating different market segments, a firm must look at three

factors:
Segment size and growth,
Segment structural attractiveness, and
Company objectives and resources
 Selecting Target Market Segments
• After evaluating different segments, the company must decide which
and how many segments it will target
• A target market consists of a set of buyers who share common needs
or characteristics that a company decides to serve.
 Undifferentiated Marketing
• Also Known as 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.
• Focuses on what is common in the needs of consumers rather than on
what is different.
When it comes to mass marketing, perhaps no one does it
better than Coca-Cola.

Ford’s Model T Followed a Mass Market

Approach by offering it in one colour,
black.
 Differentiated Marketing
• Also known as segmented marketing
• A market-coverage strategy in which a firm targets several market
segments and designs separate offers for each.
 Clinique caters to middle-
aged
women

M.A.C. caters to
youthful hipsters
 Old Spice's core customer is men
aged between 35 to 55 years old

Axe caters 18-to-24-year-old guys

 Concentrated marketing
• Also known as niche marketing
• A market-coverage strategy in which a firm goes after a large share of
one or a few segments or niches.
 Lo! Caters to Keto diet, Low Carb and
Diabetes friendly snacking needs

Kvets offers Veterinary Doctors on Call

At Home Veterinary Services
 Micromarketing
• Tailoring products and marketing programs to the needs and wants of
specific individuals and local customer segments;
• It includes local marketing and individual marketing.
• Local marketing involves tailoring brands and promotions to the
needs and wants of local customers.
• Individual marketing Tailoring products and marketing programs to
the needs and preferences of individual customers.
 Micromarketing- Local Marketing
• Local marketing involves tailoring brands and promotions to the
needs and wants of local customers
 Micromarketing- Individual Marketing
• Tailoring products and marketing programs to the needs and
preferences of individual customers.
 Step 3- Positioning
• Positioning consists of arranging for a market offering to occupy a
clear, distinctive, and desirable place relative to competing products
in the minds of target consumers
For individuals who want the best personal computer or mobile
device, Apple leads the technology industry with the most
innovative products
 Product Differentiation
• Differentiate the market offering to create superior customer value