Unit 3

Market Segmentation, Targeting and

Positioning
• Definition, Need & Benefits.
• Bases for market segmentation of consumer goods, industrial goods
and services. Segment, Niche & Local Marketing, Effective
segmentation criteria,
• Evaluating & Selecting Target Markets, Concept of Target Market
• Concept of positioning – Value Proposition & USP.

SHREYA JHA
Introduction

➢Companies can not connect with all customer in large, broad, or

diverse market. But they can divide such markets into groups of
consumers or segments with distinct needs and wants.
➢A company then need to identify which market segments it can serve
effectively.
➢This decision requires a keen understanding of consumer behavior
and careful strategic thinking.
➢To develop the best market plans, managers need to understand
what makes each segment unique and different

SHREYA JHA
Levels of Market Segmentation
Mass Marketing
➢In mass marketing , the seller engages in the mass production, mass
distribution, and mass promotion of one product to all buyer

Now a days most company are turning to micromarketing at one of

four level- segments , niches, local areas, and individuals

SHREYA JHA
Levels of Market Segmentation
a) Segment Marketing
➢ A market segment consists of group customers who share a similar
set of needs and wants.
➢ Segment marketing offers key benefits over mass marketing. The
company can offer better design , price and can also fine tune the
marketing program and activities to better reflects competitors
marketing

SHREYA JHA
 Flexible Marketing Offerings

⚫ Naked solution: ⚫ Discretionary

Product and options: Some
service elements segment members
that all segment value options but
members value not all

SHREYA JHA
 Preference Segments

⚫ Homogeneous preferences exist when

consumers want the same things
⚫ Diffused preferences exist when
consumers want very different things
⚫ Clustered preferences reveal natural
segments from groups with shared
preferences

SHREYA JHA
Levels of Market Segmentation
b) Niche Marketing
➢ A niche is a more narrowly defined customer group seeking a
distinctive mix of benefits. E.g. Ezee, Crack, Astha, QTV
➢ As the customer have distinct set of needs , they will pay premium
to the firm that best satisfies them: the niche is fairly small but has
size, profit, and growth potential and is unlikely to attract other
competitors; nicher gain certain economies through specialization

SHREYA JHA
The Himalaya Drug
Company serves a
growing niche
market by focusing
on ayurvedic
medicines and
health
supplements
SHREYA JHA
Levels of Market Segmentation
C) Local Marketing
Target marketing is leading to marketing programs tailored to the needs
and wants of local customer group in trading areas. E.g. NRI
Branches., local courier company, Spiderman3 in Bhojpuri. Bharti
Matrimony.

SHREYA JHA
Levels of Market Segmentation
d) Individual Marketing
➢We can call it as customized marketing or one to one Marketing. E.g.
Asian Paints and other paints company. Ruff n Tuff (Arvind Mills)
ready to Stitch jeans.

SHREYA JHA
 Segmenting Consumer Markets

Geographic

Demographic

Psychographic

Behavioral

SHREYA JHA
Geographic Segmentation

➢It calls for division of the market into different geographical units
such as nations, states, regions, country city.
➢In India one of the major geographical segmentation variable is the
division of Markets into rural and Urban areas.
➢Rural and urban markets differ on the no. of important parameter
such as literacy levels, income, spending power
➢Geographical markets also vary in their product requirement. Inverter
coolers and AC. Coffee and tea.

SHREYA JHA
 Demographic Segmentation

Age and Life Cycle

Life Stage
Gender
Income
Generation
Social Class

SHREYA JHA
Demographic Segmentation

➢In demographic segmentation, we divide the market into groups on

the basis of variables such as age, family size, family life cycle, gender,
income , occupation, education, religion generation, nationality and
social class.
➢Demographic variable are important because is often associated with
consumer needs and wants and they are easily measurable.

SHREYA JHA
Demographic Segmentation

a) Age and Life-cycle Stage

➢ Consumers wants and abilities change with age. Therefore, age and
life-cycle stages are important variables to define segments.
➢ E.g. J&J baby Soap, Peers Pink Soap, cartoon Network. MTV and
VTV for youngsters

SHREYA JHA
Demographic Segmentation

b)Life Stage
➢ Persons in the same part of life cycle may differ in their life stage
➢ Life stage define a persons major concern, such as getting married,
deciding to buy a home , sending child to school, taking care of
older family members.
➢ Insurance companies offer schemes for people who are planning
their retirement life.

SHREYA JHA
Demographic Segmentation

C) Gender
➢ Gender differentiation has long been applied to product categories
such as clothing, hairstyle, cosmetics and magazines.
➢ Some products have been positioned as more masculine and more
feminine..
➢ Park avenue, positioned as a masculine brand, where as a range of
women's apparel under the brand Be.

SHREYA JHA
 Dove Targets Women

SHREYA JHA
Demographic Segmentation

d)Income
➢Income segmentation is a long- standing practice in a variety of
products and services.
➢Nirma washing Powder was launched as lowest price detergent in
India.
➢C K Prahlad BOP

SHREYA JHA
Demographic Segmentation

e) Generation

F) Social Class

SHREYA JHA
Psychographic Segmentation

➢Psychographic is the science of using psychology and demographic to

better understand consumers.
➢In psychographic segmentation, buyers are divided into different
groups on the basis of personality traits, lifestyle and value. People
within the same demographic group can exhibit very different
psychographic profiles.
➢E.g. Mc D Jhtka and Halal process.

SHREYA JHA
Psychographic Segmentation

➢Titan watches have a wide range sub brand within their Titan range
such as , Edge, regalia, Nebula, and Raga to appeal different lifestyle
segment.
➢One of the most popular commercially available classification system
based of psychographic measurement is sri consulting Business
intelligence VALS framework

SHREYA JHA
The VALS Segmentation System

SHREYA JHA
Psychographic Segmentation

➢The main dimension of VALS segmentation framework are consumer

Motivation (horizontal Dimension) and consumer resource(Vertical
dimension)
➢Consumer are inspired by three primary motivation- ideals,
achievement and self expression
➢Those motivated by ideals are guided by knowledge and principles.
➢Those motivated by achievement look for product and services that
demonstrate success to their peers
➢Those motivated by self expression desire social and physical activity,
variety, and risk

SHREYA JHA
● VALS ("Values, Attitudes And Lifestyles") is a proprietary research methodology used
for psychographic market segmentation. Market segmentation is designed to guide
companies in tailoring their products and services in order to appeal to the people most
likely to purchase them.
● VALS was developed in 1978 by social scientist and consumer futurist Arnold Mitchell
and his colleagues at SRI International. It was immediately embraced by advertising
agencies, and is currently offered as a product of SRI's consulting services division.
VALS draws heavily on the work of Harvard sociologist David Riesman and
psychologist Abraham Maslow
● SRI developed the Vals 2 programme in 1978 and significantly revised it in 1989.
SHREYA JHA
VALS2 has two dimensions-
1. The first dimension- Self orientation, determines the type of goals and behaviors that individuals
will pursue, and refers to pattern of attitudes and activities which help individuals reinforce,
sustain or modify their social self-image. This is a fundamental human need.
2. The second dimension- Resources-reflects the ability of individuals to pursue their dominant self
orientation that includes full range of physical, psychological, demographic and material means
such as self-confidence, interpersonal skills, inventiveness, intelligence, eagerness to buy, money,
position, education, etc.
According to VALS 2, a consumer purchases certain products and services because the individual is a
specific type of person. The purchase is believed to reflect a consumer’s lifestyle, which is a function
of self –orientation and resources.
SHREYA JHA
● The main dimensions of the VALS framework are primary motivation (the horizontal dimension) and
resources (the vertical dimension).
● The vertical dimension segments people based on the degree to which they are innovative and have
resources such as income, education, self-confidence, intelligence, leadership skills, and energy.
● The horizontal dimension represents primary motivations and includes three distinct types:
● Consumers driven by knowledge and principles are motivated primarily by ideals. These
consumers include groups called Thinkers and Believers.
● Consumers driven by demonstrating success to their peers are motivated primarily by
achievement. These consumers include groups referred to as Achievers and Strivers.
● Consumers driven by a desire for social or physical activity, variety, and risk taking are
motivated primarily by self-expression. These consumers include the groups known as
Experiencers and Makers.
SHREYA JHA
● Innovators- These consumers are on the leading edge of change, have the highest incomes, and such
high self-esteem and abundant resources that they can indulge in any or all self-orientations. They are
located above the rectangle. Image is important to them as an expression of taste, independence, and
character. Their consumer choices are directed toward the "finer things in life.
● Thinkers- These consumers are the high-resource group of those who are motivated by ideals. They
are mature, responsible, well-educated professionals. Their leisure activities center on their homes, but
they are well informed about what goes on in the world and are open to new ideas and social change.
They have high incomes but are practical consumers and rational decision makers.
● Believers- These consumers are the low-resource group of those who are motivated by ideals. They are
conservative and predictable consumers who favor American products and established brands. Their
lives are centered on family, community, and the nation. They have modest incomes

SHREYA JHA
● Achievers- These consumers are the high-resource group of those who are motivated by
achievement. They are successful work-oriented people who get their satisfaction from their
jobs and families. They are politically conservative and respect authority and the status quo.
They favor established products and services that show off their success to their peers.
● Strivers- These consumers are the low-resource group of those who are motivated by
achievements. They have values very similar to achievers but have fewer economic, social,
and psychological resources. Style is extremely important to them as they strive to emulate
people they admire.
● Experiencers- These consumers are the high-resource group of those who are motivated by
self-expression. They are the youngest of all the segments, with a median age of 25. They
have a lot of energy, which they pour into physical exercise and social activities. They are
avid consumers, spending heavily on clothing, fast-foods, music, and other youthful favorites,
with particular emphasis on new productsSHREYA
and services.
JHA
● Makers- These consumers are the low-resource group of those who are motivated by
self-expression. They are practical people who value self-sufficiency. They are
focused on the familiar-family, work, and physical recreation-and have little interest
in the broader world. As consumers, they appreciate practical and functional products.
● Survivors- These consumers have the lowest incomes. They have too few resources
to be included in any consumer self-orientation and are thus located below the
rectangle. They are the oldest of all the segments, with a median age of 61. Within
their limited means, they tend to be brand-loyal consumers

SHREYA JHA
 Behavioral Segmentation
Decision Roles Behavioral Variables
⚫ Initiator ⚫ Occasions
⚫ Influencer ⚫ Benefits
⚫ Decider ⚫ User Status
⚫ Buyer ⚫ Usage Rate
⚫ User ⚫ Buyer-Readiness
⚫ Loyalty Status
⚫ Attitude
SHREYA JHA
Behavioral Segmentation

Decision Roles
➢People play five roles in a buying decision: influencer, decider, buyer,
and user.
➢Recognition of the different buying roles and specification of the
people who play these roles for specific product or services are vital
for marketers.
➢This is specially used for designing the communication strategy.

SHREYA JHA
Behavioral Segmentation

Behavioral Variables
a) Occasions- Arches, gift pack, Kurkure. Marketer should know at
what occasion consumer are using their products and make
strategy accordingly.
b) Benefits
➢ Buyers are classified according to the benefits that seek. Many
product categories offer different product targeted at people who
seek different set of benefits such as basic cleaning , conditioner,
dandruff free shampoo.

SHREYA JHA
Behavioral Segmentation

c)User Status
➢ Every product has its nonusers, exusers, potential users, first time
users, and regular users,
➢ The key to attracting potential user, or nonuser, is understanding
the reasons they are not using. Do they have deeply held attitude,
beliefs, or behaviors or just lack of knowledge of the product or
brand benefits and usage?

SHREYA JHA
Behavioral Segmentation

d) Usage Rate
➢ Markets can be segmented into light, medium and heavy product
users. Heavy users are often a small percentage of market but
account for a high percentage of total consumption

SHREYA JHA
 The Brand Funnel Illustrates Variations in the
Buyer-Readiness Stage

⚫ Aware
⚫ Ever tried
⚫ Recent trial
⚫ Occasional user
⚫ Regular user
⚫ Most often used

SHREYA JHA
 Loyalty Status

Hard-core

Split loyals

Shifting loyals

Switchers

SHREYA JHA
 Behavioral
Segmentation Breakdown

SHREYA JHA
 Segmenting for Business Markets

Demographic

Operating Variable

Purchasing Approaches

Situational Factors
Personal
Characteristics

SHREYA JHA
Market Targeting

SHREYA JHA
 Patterns of
Target Market Selection

SHREYA JHA
 Patterns of
Target Market Selection

SHREYA JHA
Marketing Targeting
➢Once the firm has identified its market opportunities, it must decide
how many and which ones to target.
➢Marketer are increasingly combining several variables in an effort to
identify smaller better defined target groups

SHREYA JHA
Effective Segmentation Criteria
➢Not all segment scheme are useful. Similarly, not all types of
segmentation are useful.
➢It is important to recognize that a marketer needs to use relevant
variables to segment a market. Eg segmenting a market based on age
is not possible for salt , but segmentation should be based of health.
➢To be useful, market segments must rate favorably on five key criteria

SHREYA JHA
Effective Segmentation Criteria
a) Measurable
➢ The size , Purchasing power, and characteristics of the segments
can be measured.
b)Substantial
➢ The segments are large and profitable enough to serve. A segment
should be largest possible homogeneous group worth going after
with a tailored marketing program.

SHREYA JHA
Effective Segmentation Criteria
C)Accessible- the segment can be effectively reached and served
D)Differentiable
➢ The segments are conceptually distinguishable and respond
differently to different marketing mix element and programs
e) Actionable
➢ Effective programs can be formulated for attracting and serving the
segment.

SHREYA JHA
Evaluating and selecting the Market segments
a) Single segment Concentration
➢ Company is concentrating on single segment
b) Selective Specialization
➢ A firm selects a no. of segments, each objectively attractive and
appropriate. There may be little or no synergy among the segments,
but each promise to be money maker
➢ The multisegment strategy has the advantage of diversifying the
firm`s risk

SHREYA JHA
Evaluating and selecting the Market segments
c) Product Specialization
➢ The firm makes a certain product that it sells to several different
market segment.
➢ E.g. microscope
d)Full Market coverage
➢ The firm attempt to serve all customer groups with all the product
that might need

SHREYA JHA
 Patterns of
Target Market Selection

SHREYA JHA
 Figure 8.5 Segment-by-Segment Invasion Plan

SHREYA JHA
Positioning

➢Positioning is the act of designing the company`s offering and image

to occupy a distinctive place in the minds of the target market.
➢The goal is to locate the brand in the minds of consumers to
maximize the potential benefits to the firm
➢A good brand positioning helps giude marketing strategy by clarifying
the brands essence, what goals it helps the consumer achieve and
how it does so in a unique way.

SHREYA JHA
Brand Positioning
➢With an identity in place and a value proposition specified,
implementation begins.
➢Communication objectives need to be established, and execution
planned and implemented.
➢The place to start is with a brand position statement-the cornerstone
of comn.program

SHREYA JHA
Brand Positioning

➢Brand position is the part of the brand identity

and value proposition that is to be actively
communicated to the target audience and that
demonstrates an advantage over competing
brands.
➢The four salient characteristics of a brand position
as reflected by phrases(Part, target audience,
actively communicated, demonstrate advantage)

SHREYA JHA
Brand Positioning

1.A Part of the Identity/Value Proposition

➢For some brands,the brand dentity and value
proposition do combined into a compact
statement that can serve (perhaps minor
adjustment) as the brand position, but not in all
the cases
➢E.g. Mc D cleanliness
➢Brand position can be changed without the
identity or value proposition of which it is a
subsets.
SHREYA JHA
Brand Positioning

The Target Audience

➢The brand position should also target a specific
audience, which may be a subset of the brand`s
target segment.
Active Communication
➢It implies that there should be a specific
communication objectives focused on changing or
strengthening the brand image or brand-customer
relationship.

SHREYA JHA
Brand Positioning

➢This objective should be accompanied by

measurement.
➢If the goal is to create or improve the friend
relationship, an agree-disagree scale could be
developed
➢Such scales could be used both in testing on
communication programs and in tracking their
impact.

SHREYA JHA
Brand Positioning

Brand Position and the Brand Image

➢Brand image reflects current perceptions of a
brand
➢Brand position is more aspirational,reflectin
perceptions that the strategists want to have
associated with the brand.
➢In creating a brand position, a useful step is to
compare brand identity with the brand image on
different image dimensions
SHREYA JHA
Brand Positioning
Dimension Brand Identity Brand Image
(Goal) (Current Reality)
Product Premium beer Premium beer

User Young(in spirit or Middle-aged

body)
Personality Fun, Humorous Fun, Humorous

Functional benefits Superior Flavor Superior Flavor

Emotional benefits Social group (None)

acceptance
SHREYA JHA
Brand Positioning

➢Comparison of the identity with the image will

usually result communication tasks being reflected
in a brand position statement.
a.Augmenting an Image
➢A brand image might be too restrictive,
while the identity points the way to adding other
segment or application.

SHREYA JHA
Brand Positioning

➢The brand position therefore attempt to add

association to the brand image and to soften
restrictive perceptions.
b.Reinforcing on Image
➢The brand image should not dictate the
position(or identity),but neither should it be
ignored
➢Often an effective brand position will reinforce
and exploit an image strength.

SHREYA JHA
Brand Positioning

c.Diffusing an Image
➢Sometimes specifying what a brand is not is as
important to the integrity of the communication
program as specifying what it is.
➢Specifying that the brand is not exclusively for
middle-aged users suggests visuals imagery to
avoid as well as imagery to include.

SHREYA JHA
Brand Positioning

3.Demonstrate an advantage
➢The position should specify a point of superiority
that is a part of value proposition
➢The point of advantage should resonate with
customers and be differentiating i.e. represent
something different from what a competitors
provide.

SHREYA JHA
Positioning Strategy

➢Positioning strategy is aimed at building brand

differentiation within the value frame of the target
by market.
➢The need for competitive positioning is primarily
triggered by emergence of intense competition in
most of the product categories.
➢The competition implies imminent product
similarity and loss of identity.

SHREYA JHA
Positioning Strategy

➢Positioning is increasingly seen as a device to gain

control over market by means of customer pulling
brand differentiation
➢The four question that can reveal the totality of a
brand are
➢Who am I?
➢What am I?
➢For whom am I?
➢Why me?
SHREYA JHA
Who am I?
➢Answering this question would reveal the origin or pedigree of the
brand: where it belongs or where it comes from.
➢Identifying family or origin could give a brand a competitive
advantage by allowing it to draw positives strengths of family.

SHREYA JHA
Who am I?
1.Positioning by corporate identity
➢Brands draws a direct connection with the corporate identity and
seek to play on its credential.
➢Sometimes ,firms use the corporate brand name to label their entries
in various product categories.e.g LG,Samsung.
➢A separate brand is launched by revealing the corporate connection
by a statement `From a house of….` or `A quality product of

SHREYA JHA
Who am I?
2.Positioning by brand endorsement
➢In this case a successful brand is used as an endorser of a new entry.
➢Dabur uses its successful brand vatika to promote product like
shampoos and soap.
➢Nestle used Maggi name to promote ketcup,
➢ Raymonds Park Avenue brand endorses soap ,belts aftershave.

SHREYA JHA
What am i?
➢In this strategies, a brands functional capabilities r used for
positioning purpose.
1.Category Positioning
➢This involves making a product jump over the category it originally
belongs to and positioning it in a different way.
➢Suryansh brand of diamonds r positioned as an investment, not as a
piece of jewellery.

SHREYA JHA
What am i?
2.Benefit positioning
➢This strategy involves choosing a unique,
not-yet-offered benefits to position the brand
➢Fructies shampoo is positioned asfor strong hair. All Clear shampoo
is positioned as a anti-dandruff shampoo offering the benefit of
dandruff removal.

SHREYA JHA
What am i?
3.Usage and Use Time Positioning
➢A brand may choose to preempt a particular usage or usage time for
positioning purpose.
➢Livon hair lotion is positioned as something to be used after shampoo
to detangle hair.
➢Nescafe aims to position the coffee brand as a morning beverage(Get
the day started)

SHREYA JHA
What am i?

4.Price-quality Positioning
➢A brand can choose to occupy a distinct position
on price-quality spectrum.
➢At the bottom end it means an economy, like
Nirma,Breeze both low quality, low price position.
➢At the top end, it means premium position.
surf Excel and Ariel. PeterEngland,Louis PhiliPPe
from Madura Garments

SHREYA JHA
For whom am i?

➢This strategies looks at the target market for

positioning the brand.
➢Depending upon the segmentation scheme used
to divide the market,a brand can focus on a
specific customer group for positioning purpose.
➢This reveals the brands appeal to other group, but
greater relevance is achieved for the target group.

SHREYA JHA
For whom am i?

1 Demographic Group
➢Variables like age,sex,education could be used to
divide the market.
➢Clinic Shampoo is positioned as a shampoo for
young school-going girls market.
➢Zandu Kesri jeevan is positioned as a strength
tonic for old people.
➢Lenovo Notebook is positioned as a laptop meant
for professionals in the industries.
SHREYA JHA
For whom am i?

2.Behavioral
➢The usage volume differs in the market and this
gives rise to groupings like light, heavy and
medium user segments.
➢A brand may choose to use his classification to
position itself.
➢Rath Vanaspati focus on the professional caterers
segment known for bulk consumption.

SHREYA JHA
For whom am i?

3.Psychographic
➢A brand can be positioned according to the
psychographic traits of the people
➢Pepsi positioned as a drink of what they call `New
generation or generation next.
➢Asian Paints is positioned as the brand for a group
of self –expressive people

SHREYA JHA
Why me?

➢This group involves positioning the brand on the

basis of a unique reason
➢A brand must have a unique benefits or attribute
to give the prospects a reason to buy.
➢Medimix ayurvedic soap is positioned as made
from 24 different herbal ingredients.
➢Anchor White boosts of being a vegetarian
toothpaste.
➢J&J `No tears Shampoo` is positioned as a non-
hurting shampoo.
SHREYA JHA
Developing and establishing Brand
Positioning
➢A good positioning has a “foot in present and foot in future”
➢The result of positioning is the successful creation of Customer
focused value proposition.
➢Positioning requires that marketers define and communicate
similarities and differences between their brand and its competitors.

SHREYA JHA
Developing and establishing Brand
Positioning
Specifically, deciding on a positioning requires:
(1) determining a frame of reference by identifying the
target market and relevant competition,
(2) identifying the optimal points of parity and points
of difference brand associations given that frame of
reference, and
(3) creating a brand mantra to summarize the
positioning and essence of the brand

SHREYA JHA
Defining Associations
Points-of-difference Points-of-parity
Attributes or benefits Associations that are not
consumers strongly necessarily unique to
associate with a brand, the brand but may be
positively evaluate, and shared with other
believe they could not brands
find to the same extent
with a competitive brand

SHREYA JHA
Defining Associations
• Points-of-difference (PODs) are 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.
• Associations that make up points-of-difference may be based on
virtually any type of attribute or benefit. Strong brands may have
multiple points-of-difference.

SHREYA JHA
Defining Associations
• Points-of-parity (POP) are attribute or benefit associations that are
not necessarily unique to the brand but may in fact be shared with
other brands. These types of associations come in two basic forms:
category and competitive.
• Category points-of-parity are attributes or benefits that consumers view as
essential to a legitimate and credible offering within a certain product or
service category.

SHREYA JHA
Defining Associations
Competitive points-of-parity are associations designed to overcome perceived
weaknesses of the brand. A competitive point-of-parity may be required to
either
⚫ (1) negate competitors’ perceived points-of-difference or
⚫ (2) negate a perceived vulnerability of the brand as a result of its own points-of-
difference.

SHREYA JHA
Thank You for your participation

For any queries, please contact:

[email protected]
SHREYA JHA