Lesson 8

Segmentation, Targeting &

Positioning

Dr. Nuresh Eranda

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Mass Marketing
 The seller engages in mass production, mass
distribution, & mass promotion of one product for all
buyers
 E.g. Gasoline, white bread

 Mass marketing is dying?

 Emergence of target marketing

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 1. Identify segments
within the
product-market

Target Marketing

3. Design and
implement a 2. Decide which
positioning segment(s) to
strategy for each target
targeted segment
Steps in Segmentation, Targeting, and Positioning
6. Develop Marketing
Mix for Each Target Segment Market
5. Develop Positioning Positioning
for Each Target Segment
4. Select Target
Segment(s) Market
3. Develop Measures Targeting
of Segment Attractiveness
2. Develop Profiles
of Resulting Segments
Market Segmentation
1. Identify Bases
for Segmenting the Market
What is Market Segmentation?
 Division of the total market into smaller, relatively
homogeneous groups
 A market segment consists of a group of customers
who share a similar set of needs and wants
 Importance of market segmentation
 Markets have a variety of product needs and
preferences.
 Marketers can better define customer needs.
 Decision makers can define objectives and allocate
resources more accurately
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Bases for Segmenting Consumer
Markets

Geographic Demographic

Psychographic Behavioral

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Geographic Segmentation
 Division of the market into different geographical
units such as nations, states, countries, cities, or
neighborhoods.

 Region: Districts, provinces, or prefectures

 Rural or urban markets

 Climate conditions

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 Demographic Segmentation
 Divide the market into groups on the basis of
variables such as
Age Occupation
Family size Education
Family life cycle Religion
Gender Race
Income Nationality
Generation Social class

 Demographic variables are associated with

consumer needs & wants
 Demographic variables are used in combination
with non-demographic variables
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Psychographic Segmentation
 Buyers are divided into different groups on the basis of
psychological/personality traits, lifestyle, or values.

 Lifestyle: Culture-oriented, sports-oriented, outdoor-

oriented

 Personality: Compulsive (Irrational), gregarious

(outgoing), authoritarian, ambitious

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Behavioral Segmentation
 Marketers divide buyers into groups on the basis of their
knowledge of, attitude toward, use of, or response to a
product
 Occasions: Regular, special
 Benefits: Quality, service, economy, speed
 User status: Nonuser, ex-user, potential user, first-time user,
regular user
 Usage rate: Light, medium, heavy
 Loyalty status: None, medium, heavy
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Behavioral Segmentation
 Readiness stage:
Unaware, aware, informed, interested, desirous,
intending to buy

 Attitude toward product

Enthusiastic, positive, indifferent, negative, hostile

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Market Targeting
 Once the firm has identified its market-segment
opportunities it must decide
 How many segments to target?
 Which segments to target?

Segment’s overall
attractiveness Company’s objectives &
(Size, growth, resources
profitability, scale
economies, & low risk)

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Effective Segmentation Criteria
• The size, purchasing power, ＆
Measurable characteristics of the segments can be
measured

• The segments are large & profitable

Substantial enough to serve

• Segments can be effectively reached

Accessible & served

• Segments are conceptually

Differentiable distinguishable & respond differently to
marketing mix elements & programs

• Effective programs can be formulated

Actionable for attracting & serving segments
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Effective segmentation criteria contd.
 Michael Porter has identified Five Forces that
determine the intrinsic long-run attractiveness of a
market or market segment

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Market Targeting Strategies
Undifferentiated Marketing (Mass marketing)
Company
Marketing Market
Mix

Differentiated Marketing
Company
Marketing Mix 1 Segment 1
Company
Segment 2
Marketing Mix 2
Company
Segment 3
Marketing Mix 3
Concentrated Marketing

Segment 1
Company
Marketing Segment 2
Mix
Segment 3
Positioning Strategy
 Positioning is the act of designing the company’s
offering and image to occupy a distinctive place in
the minds of the consumer
• The goal of positioning is to locate the brand in
the minds of consumers to maximize the potential
benefit to the firm
 A good brand positioning helps guide marketing
strategy by clarifying the brand’s essence
 A good positioning should be somewhat
aspirational where the brand has room to grow
and improve
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Positioning Strategy
 The role of a good positioning:
 Guide the company’s marketing strategy
 Help the consumer to identify what goals to achieve
 Guide the consumer to achieve the goals in a unique way

 Positioning should create customer-focused value

propositions (the cogent reason why the target market
should buy a product or service)

 Value proposition should convey the product or

service’s key benefits which need to create value for
customers by satisfying their needs
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Examples of Value Propositions
Brand, product, & Target customers Benefits Value proposition
company
Scorpio, SUV, Life-style oriented Ruggedness, luxury, A vehicle that
Mahindra & customers & comfort provides the luxury
Mahindra & comfort of a car,
& the adventure &
thrill of an SUV

Indica, Car, Tata Small-car Spaciousness A spacious, small

Motors consumers who car without extra
want a more costs
spacious vehicle

Domino’s、Pizza Convenience- Delivery, speed, & A good, hot pizza

minded pizza lovers good quality delivered to your
door within 30
minutes of ordering

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Positioning Strategy
 Deciding on a positioning strategy requires:
 Choosing a frame of reference by identifying the target
market and relevant competition
 Identifying the potential points-of-difference (POD) and
points-of-parity (POP)
 POD: attributes or benefits that consumers strongly associate with a
brand, positively evaluate and believe they could not find to the
same extent with a competitive brand
 POP: attribute or benefit associations that are not necessarily unique
to the brand but may in fact be shared with other brands
 Creating a brand mantra summarizing the positioning and
essence of the brand
 A brand mantra is a 3 - 5 word articulation of the heart and soul of
the brand
 Brand mantra should highlight the POD

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POD and POP
Apple Sony

Powerful in terms of online Powerful in retail stores

Point of distribution
difference
Design oriented Quality oriented
(POD)
Powerful in terms of Sony is a reader than media
communication device

Point of Communication tools

parity E-book content
(POP) Online and retail distribution
Perceptual Mapping
 Perceptual maps are visual representations of
consumer perceptions and preferences

 They provide quantitative pictures of market

situations and the way consumers view different
products, services, and brands along various
dimensions

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Think about automobile brands….
Expensive

Sporty Conservative

Inexpensive
Positioning errors
 Under-positioning – customers have only vague ideas
about the company and do not perceive anything
distinctive about it
 Over-positioning – Customers have too narrow an
understanding of the company, product, or brand
 Confused positioning – Frequent changes and
contradictory messages confuse customers
 Doubtful positioning – claims made for the product or
brand are not regarded as credible
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