Marketing and sales Management

Level III
Based On November, 2023, Curriculum Version II

Module Title: Profiling Market

Module Code: LSA MSM3 M08 1123

Nominal Duration: 45 Hours

Prepared By: Ministry of Labor and skills

November 2023

Addis Ababa, Ethiopia

 Acknowledgement
Ministry of Labor and Skills wish to extend thanks and appreciation to the many
representatives of TVET instructors and respective industry experts who donated their time
and expertise to the development of this Teaching, Training and Learning Materials (TTLM).

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 Table of Contents
Acknowledgement ................................................................................................................................... i
Table of Contents .................................................................................................................................... ii
Acronyms ............................................................................................................................................... iv
Introduction to the Module ..................................................................................................................... 1
UNIT ONE: MARKET SEGMENTATION ........................................................................................... 2
1.1. Concept of market segmentation................................................................................................. 3
1.1.1. Logic of market segmentation............................................................................................. 4
1.1.2. Importance of market segmentation .................................................................................... 5
1.1.3. Limitations of Market Segmentation .............................................................................. 7
1.1.4. Type of market segmentation .......................................................................................... 7
1.1.5. Segmenting for consumer market ................................................................................. 11
1.1.6. Segmenting for industrial market .................................................................................. 12
1.2. Pattern of segmentation......................................................................................................... 13
1.3. Market information ............................................................................................................... 14
1.3.1. Source of market information ....................................................................................... 15
1.3.2. Method of collecting market information ..................................................................... 16
1.4. Characteristic of good market segmentation ......................................................................... 16
1.5. Segmentation analysis ........................................................................................................... 18
SELF CHAECK FOR UNIT ONE ....................................................................................................... 20
UNIT TWO: MARKET TARGET ........................................................................................................ 21
2.1. Overview of targeting ........................................................................................................... 22
2.2. Targeting approach ................................................................................................................ 23
2.3. Descriptor of target market ................................................................................................... 25
2.4. Target market strategy ........................................................................................................... 26
SELF CHAECK FOR UNIT TWO....................................................................................................... 29
UNIT THREE: TARGET PROFILE ..................................................................................................... 31
3.1. Profile target market.............................................................................................................. 32
3.2. Consumer standard................................................................................................................ 33
3.2.1. Customer characteristic ................................................................................................. 34
3.2.2. Customer profile ........................................................................................................... 35
3.3. Market plan ........................................................................................................................... 37
3.4. Consumer attitude ................................................................................................................. 38

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 3.5. Organization requirement ......................................................................................................... 41
SELF CHAECK FOR UNIT THREE ................................................................................................... 43
UNIT FOUR: POSITIONING .............................................................................................................. 45
4.1. Overview of positioning........................................................................................................ 46
4.1.1. Type of market positioning strategy .............................................................................. 47
4.1.2. Importance of market positioning ................................................................................. 49
4.1.3. Criteria of good market positioning .............................................................................. 49
4.2. Positioning plan .................................................................................................................... 50
4.3. Positioning plan adjustment .................................................................................................. 51
SELF CHAECK FOR UNIT FOUR ..................................................................................................... 53

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 Acronyms

KPI: key performance indicator

USP: unique selling proposition

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 Introduction to the Module

In marketing and sales management field profile market help to Segment the market, Identify
the target market, Profile the target audience and develop a positioning strategy under the
marketing and sales management field.

This module is designed to meet the industry requirement under the profile market
occupational standard, particularly for the marketing and sales management.

Module unit

 Overview of Market Segmentation

 Market Target
 Target Profile
 Positioning
Learning objectives of the Module
At the end of this session, the students will able to:
 Segment the market
 Identify the target market
 Profile the target audience
 Develop positioning strategy

Module Learning Instructions:

1. Read the information written in each unit

2. Accomplish the Self-checks at the end of each unit

3. Read the identified reference book for Examples and exercise

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 UNIT ONE: MARKET SEGMENTATION
This learning unit is designed to provide the trainees the necessary information regarding the
following content coverage and topics:

 Concepts of market segmentation

 Pattern of segmentation
 Market information
 Characteristic of good market segmentation
 Segmentation analysis

This unit will also assist you to attain the learning outcomes stated in the cover page.
Specifically, upon completion of this learning guide, you will be able to:
 Know concept of market segmentation
 Identify pattern of segmentation
 Identify Market information
 Identify characteristic of good market segmentation
 Apply Segmentation analysis

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 1.1. Concept of market segmentation
Development of a successful marketing strategy begins with an understanding of the market
for the good or service. A market is composed of people or institutions with need, sufficient
purchasing power and willingness to buy. The market place is heterogeneous with differing
wants and varying purchase power. The heterogeneous marketplace can be divided into many
homogeneous customer segments along several segmentation variable. The division of the
total market into smaller relatively homogeneous groups is called market segmentation.
Products seldom succeed by appealing to everybody. The reasons are simple: not every
customer is profitable nor worth retaining, not every product appeals to every customer.
Hence the organizations look for a fit between their competencies and the segments‘
profitability. The identified segments are then targeted with clear marketing communications.
Such communications are referred to as positioning the product or service in the mind of the
customer so as to 58 occupy a unique place. This involves identifying different points of
differentiation and formulating a unique selling proposition (USP). In today‘s marketplace,
differentiation holds the key to marketing success. This lesson is about marketing strategy
formulation which consists of market segmentation, targeting and positioning.

Meaning and Definition

Segmentation is a consumer oriented marketing strategy. It is a process of dividing the
market on the basis of interest, need and motive of the consumer. Market segmentation
simply means dividing market or grouping of consumers. It refers to grouping of consumers
according to such characteristics as income, age, race, education, sex, geographic location
etc. Therefore market segmentation is the strategy that subdivides the target market into sub-
groups of consumers with distinct and homogenous characteristics with a view to develop
and follow a distinct and differentiated marketing programmes for each sub-group in order to
enhance satisfaction to consumers and profit to the marketer.

According to Philip Kotler, ― Market segmentation is the sub-dividing of a market into

homogenous sub-sects of consumers where any sub-sects may conceivably be selected as a
market target to be reached, With a distinct marketing mix.‖
Market segmentation is a marketing term that refers to aggregating prospective buyers into
groups or segments with common needs and who respond similarly to a marketing action.

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 Market segmentation enables companies to target different categories of consumers who
perceive the full value of certain products and services differently from one another.

Market segmentation divides a market into well-defined slices. A market segment consists
of a group of customers who share a similar set of needs and wants. The marketer‘s task is to
identify the appropriate number and nature of market segments and decide which one(s) to
target.

Segmentation refers to the process of dividing your audience into smaller groups based on
certain characteristics. This process allows you to group your individual audience members
into similar groups so you can better communicate your products, features, and benefits that
may be most relevant to them.

Segmentation may sound a little familiar to another process creating buyer personas. But
where buyer personas help you create a handful of customer profiles that represent your
broader audience, segmentation allows you to split your audience into countless groups, each
of which you can uniquely target.

1.1.1. Logic of market segmentation

The concept of market segmentation has helped marketing decision making since the
evolution of marketing. The goal of market segmentation is to partition the total market for a
product or service into smaller groups of customer segments based on their characteristics,
their potential as customers for the specific product or service in question and their
differential reactions to marketing programs. Because segmentation seeks to isolate
significant differences among groups of individuals in the market, it can aid marketing
decision making in at least four ways:

A. Segmentation helps the marketer by identifying groups of customers to whom he

could more effectively ‗target‘ marketing efforts for the product or service.
B. Segmentation helps the marketer avoid ‗trial-and-error‘ methods of strategy
formulation by providing an understanding of these customers upon which he can
tailor the strategy.
C. In helping the marketer to address and satisfy customer needs more effectively,
segmentation aids in the implementation of the marketing concept.

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 D. On-going customer analysis and market segmentation provides important data on
which long-range planning (for market growth or product development) can be based.

Although it is a very useful technique, segmentation is not appropriate in every marketing

situation. If, for instance, a marketer has evidence that all customers within a market have
similar needs to be fulfilled by the product or service in question (i.e. an undifferentiated
market), one ‗mass‘ marketing strategy would probably be appropriate for the entire market.

1.1.2. Importance of market segmentation

According to Sheth, ―Market segmentation is the essence of modern marketing.‖ It is
advantageous to firms as well as consumers.

A. Advantages to firms
 Increases sale volume.  Makes best use of resources.
 Helps to win competition.  Expands markets.
 Enables to take decisions.  Creates innovations.
 Helps to prepare effective  Higher markets share.
marketing plan.  Specialised marketing.
 Helps to understand the needs of  Achieves marketing goals.
consumers.
B. Advantages to consumers
 Customer oriented.
 Quality product at reasonable price.
 Other benefits such as discounts, prize etc.

In addition to the above benefits, According to a study by Bain & Company, 81% of
executives found that segmentation was crucial for growing profits. Bain also found that
organisations with great market segmentation strategies enjoyed a 10% higher profit than
companies whose segmentation wasn‘t as effective over a 5-year period.

A. Stronger marketing messages: You no longer have to be generic and vague – you
can speak directly to a specific group of people in ways they can relate to, because
you understand their characteristics, wants and needs.

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 B. Targeted digital advertising: Market segmentation helps you understand and define
your audience‘s characteristics, so you can direct your marketing efforts to specific
ages, locations, buying habits, interests etc.

C. Developing effective marketing strategies: Knowing your target audience gives you
a head start about what methods, tactics and solutions they will be most responsive to.

D. Better response rates and lower acquisition costs: will result from creating your
marketing communications both in ad messaging and advanced targeting on digital
platforms like Facebook and Google using your segmentation

E. Attracting the right customers: targeted, clear and direct messaging attracts the
people you want to buy from you

F. Increasing brand loyalty: when customers feel understood, uniquely well served and
trusting, they are more likely to stick with your brand

G. Differentiating your brand from the competition: More specific, personal

messaging makes your brand stand out

H. Identifying niche markets: segmentation can uncover not only underserved markets,
but also new ways of serving existing markets – opportunities which can be used to
grow your brand.

I. Staying on message: As segmentation is so linear, it‘s easy to stay on track with your
marketing strategies, and not get distracted into less effective areas

J. Driving growth: You can encourage customers to buy from you again, or trade up
from a lower-priced product or service

K. Enhanced profits: Different customers have different disposable incomes; prices can
be set according to how much they are willing to spend. Knowing this can ensure you
don‘t over (or under) sell yourself.

L. Product development: You‘ll be able to design with the needs of your customers top
of mind, and develop different products that cater to your different customer base
areas.
M. Increased resource efficiency. Marketing segmentation allows management to focus
on certain demographics or customers. Instead of trying to promote products to the

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 entire market, marketing segmentation allows a focused, precise approach that often
costs less compared to a broad reach approach.

1.1.3. Limitations of Market Segmentation

The benefits above can't be achieved with some potential downsides. Here are some
disadvantages to consider when considering implementing market segmentation strategies.

 Higher upfront marketing expenses. Marketing segmentation has the long-term

goal of being efficient. However, to capture this efficiency, companies must often
spend resources upfront to gain the insight, data, and research into their customer
base and the broad markets.
 Increased product line complexity. Marketing segmentation takes a large market
and attempts to break it into more specific, manageable pieces. This has the
downside risk of creating an overly complex, fractionalized product line that focuses
too deeply on catering to specific market segments. Instead of a company having a
cohesive product line, a company's marketing mix may become too confusing and
inconsistently communicate its overall brand.
 Greater risk of misassumptions. Market segmentation is rooted in the assumption
that similar demographics will share common needs. This may not always be the
case. By grouping a population together with the belief that they share common
traits, a company may risk misidentifying the needs, values, or motivations within
individuals of a given population.
 Higher reliance on reliable data. Market segmentation is only as strong as the
underlying data that support the claims that are made. This means being mindful of
what sources are used to pull in data. This also means being conscious of changing
trends and when market segments may have shifted from prior studies.

1.1.4. Type of market segmentation

Different variables are used to segment the consumer markets. They can be broadly put into
four categories.

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 Figure 1.1. Basis of market segmentation

DEMOGRAPHIC SEGMENTATION: Demos means people and graphein means to

measure or to study. In Demography means study of people or population. In Demographic
segmentation, the market is segmented on the basis of demographic variables such as age,
sex, family size, family life cycle, income, occupation, education etc. Demographic variables
or characteristics are the most popular bases for segmenting the market.

A. Age: Age is an important factor for segmenting the market. This is because demand
and brand choice of people change with age. On the basis of age, a market can be
divided into four- Children, Teenagers, Adults and Grown-ups. For consumers of
different age groups, different types of products are produced. Johnson and Johnson
cater to the needs of children below 6 years by presenting baby powders, baby soaps,
oils etc.
B. Sex: Sex based segmentation means grouping customers into males and females. The
wants, tastes, preferences, interests, choices etc, of men are different from that of

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 women. For instance, women are more fond of cosmetics and other fancy articles.
Marketers use gender differences for marketing garments, personal care products,
bikes, cosmetics and magazines.
C. Family Life Cycle: It refers to the important stages in the life of an ordinary family.
Broadly divided into the following stages. Wants, tastes, interests, buying habits etc
vary over different life cycles stages.

Stage 1: Childhood.
Stage 2: Bachelorhood (unmarried).
Stage 3: Honemooners- Young married couple.
Stage 4: Parenthood- (a) Couple with children. (b) Couple with grown up children.
Stage 5: Post- parenthood- Older married couple with children living away from
Parents (due to job or marriage of sons and daughters).
Stage 6: Dissolution- One of the partners is dead.

D. Religion: Religious differences have important effect on marketing. The male folk
among the muslims have a demand for striped lungis and the woman folk for pardhas.
E. Income: Income segmentation is used for automobiles, clothing, cosmetics, travel,
financial services etc. For example, BMW (car manufacturer concentrates on high
income segment)
F. Occupation: Market segmentation is done also on the basis of occupation of
consumers. For instance, doctors may demand Surgical equipment, lawyers may
demand coat etc.
G. Family Size: A marketer launches different sizes of products in the market according
to size of the family. For example, shampoos and oil are available in 100 ml. 200ml.
500ml etc.
H. Education: On the basis of education, market for books may be divided as high school,
plus two, graduate and post graduate.

GEOGRAPHIC SEGMENTATION: The marketer divides the market into different

geographical units. Generally international companies segment markets geographically. The
theory behind this strategy is that people who live in same area have some similar need and
wants and that need and wants differ from those of people living in other areas.

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 A. Area: This type of segmentation divides the market into different geographical units
such as country, state, region, district, area etc. Some manufacturers split up their
sales territories either state-wise or district-wise. Markets may also be divided into
urban and rural markets.
B. Climate: Different types of climate prevail in different places. On the basis of climate,
areas can be classified as hot, cold, humid and rainy region. Climate determines the
demand for certain goods.
C. Population Density: The size and density of population affects the demand for
consumer goods. In those areas where size and density of population is high, there
will be good demand for consumer goods.

BEHAVIOURAL SEGMENTATION: Behavioural segmentation is based on buyer

behaviour i.e. the way people behave during and after purchase.

A. Attitude: Customers can be segmented on the basis of attitude such as enthusiastic,

positive, indifferent, negative, hostile etc. Fashionable and latest products are used by
enthusiastic consumers. Liquor, cigarette etc are used by negative consumers.
B. Product Segmentation: The market segmentation is done on the basis of product
characteristics that are capable of satisfying certain special needs of customers.
 Prestige products, e.g., Automobiles, clothing, Home furnishing.
 Maturity products, e.g., Cigarettes, Blades etc.
 Status products, e.g., Most luxuries.
 Anxiety products, e.g., Medicines, soaps etc.
 Functional products, e.g., Fruits, vegetables etc
C. Occasion Segmentation: According to the occasions, buyers develop a need, purchase
a product or use a product. There can be two types of situations- regular and special.
For example, for regular use, women purchase cotton or polyester sarees or churidars.
For attending marriage or reception(special occasion) they buy silk sarees.
D. Benefit Segmentation: Benefit segmentation implies satisfying one benefit group. The
benefit may be classified into Generic or Primary and Secondary or Evolved.
E. Volume Segmentation: The market is segmented on the basis of volume or quality of
purchase. The buyers are grouped into categories like bulk buyers, moderate buyers,
and small buyers. Heavy buyers are often small percentage of the market but account

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 for a high percentage of total consumption. Marketers prefer to attract one heavy
buyer rather than several small buyers.
F. Loyalty Segmentation: Consumers have varying degree of loyalty to specific brands.
On the basis of brand loyalty, buyers can be divided into the following five groups.
 Hard-core loyals
 Soft- core loyals
 Shifting loyals
 Switchers
 Consumer innovator

PSYCHOGRAPHIC SEGMENTATION: It refers to grouping of people into

homogeneous segments on the basis of psychological makeup namely personality and life
style.
A. Life Style: A person‘s life style is the pattern of living as expressed in the person‘s
activities, interests and opinions .They express their life styles through the products
they use. For example, the life style of a college student is different from that of an
ordinary worker. Car, clothing, cosmetics, furniture, liquor, cigarettes etc. are
segmented by using life style
B. Personality: Personality reflects a person‘s traits, attitude and habits. It is in this
background that a person is classified as active or passive, rational or impulsive,
creative or conventional, introvert or extrovert. For example, Raymond‘s
advertisement says ―Raymonds. The Complete Man‖
C. Social Class: On the basis of Social class, consumers may be grouped into lower
class, middle class and upper class. Social class is determined by income, occupation
and education.

1.1.5. Segmenting for consumer market

Consumer markets are those where the products are purchased by ultimate consumers for
personal use. Industrial markets are those where the goods and services are purchased for use
either directly or indirectly in the production of other goods and services for resale. Market
segmentation of these markets use different variables. The consumer market segmentation
variables appear to fall into two broad classes: consumers‘ background characteristics and

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 consumers‘ market history. The following tables illustrate the most important factors and
variables that have been found useful for market segmentation

Figure 1.2. Segmentation variable for consumer market

1.1.6. Segmenting for industrial market

Industrial marketing needs to consider two important sets of characteristics of the business
buyers: (A) the characteristics of the buyer as a consuming organization and (B) the
behavioural characteristics of the buyer. The first set includes such factors as the type of the
organization, the size, the product requirements, the end use of the product, the organization
capabilities and so on. The second set includes factors like the buying decision making
process and considers the fact that it is in effect people and the organization, who take the
decision. These characteristics have led to a two-stage approach to industrial market
segmentation starting with a macro segmentation and then going into a micro segmentation.
Between the macro and micro bases of industrial market segmentation, there lie some useful
bases of segmentation, as suggested by Shapiro and Bonoma in the Nested approach to
segmenting the industrial markets. These intermediate bases of segmentation, viz.,

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 demographics, operating variables, purchasing approaches, situational factors and personal
characteristics, are explained in figure 1.3. The table lists major questions that business
marketers should ask in determining which customers they want to serve. By targeting these
segments instead of the whole market, companies have a much better chance to deliver value
to customers and to receive maximum rewards for close attention to their needs.

Figure 1.3. Major segmentation variables for industrial market

1.2. Pattern of segmentation

I. Undifferentiated Marketing: Under this strategy, the producer or marketer does
not differentiate between different type of customers. One marketing mix is used
for the whole market. Eg. Pepsi.

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 II. Differentiated Marketing: A number of market segments are identified and
different marketing mix is developed for each of the segments. Eg; consumer
products.
III. Concentrated Marketing: It is concerned with the concentration of all marketing
efforts on one selected segment within the total market. Eg; Kid‘s wear.
IV. Customised or Personalised Marketing: In this case firms view each customer as a
separate segment and customised marketing programmes to those individuals
specific requirements. Eg; civil engineers designing flats, villas, bridges etc.

However before we are going to segmenting the market or selecting pattern of segmentation,
the market must consider the following factor:

Product variability- A Concentrated approach is suitable for differentiated products, say,

cars. However, undifferentiated marketing is more appropriate for highly uniform
products such as steel or sugar.

Company resources- A differentiated approach is more appropriate when the resources

are limited.

Product Life Cycle- In the case of new products, the company uses one version at the
launch stage. However, it may be necessary to differentiate when more competitors enter
the market over time.

Competitive activity- Applying an undifferentiated marketing approach may be a

disaster when competitors use a differentiated segmentation strategy. A company should
always consider which marketing segmentation approach it should use.

Market features- A company should use an undifferentiated marketing strategy when all
consumers have similar preferences or are not ready to pay extra for different quality.

1.3. Market information

Information access is the ability to identify, retrieve, and use information effectively. Access
to information is vital to social, political, and economic advancement. Traditionally,
information has been disseminated in a variety of formats that have been widely accessible,
often through public libraries.

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 Market access is the ability of a company to sell its products and services in a foreign market.
When it comes to international trade, market access can be accomplished through exporting,
licensing, franchising, or establishing a joint venture.

Many factors can affect a company‘s ability to gain market access, including tariffs, quotas,
and other trade barriers. Market access can also be limited by a lack of infrastructure or
regulations in a foreign market.

1.3.1. Source of market information

Within most decision-making processes, a variety of information is utilized. In a very broad
sense, two types of information sources such market data and internal data exist those
generated within the firm and those in the market environment.

The following are sources of information to the decision-makers of a firm. Certainly, one of
the most significant sources of information for market segmnetation is within the firm itself.

 Customer surveys and feedback: Conducting surveys and collecting feedback from
customers can provide valuable insights into their needs, preferences, and behaviors.
 Industry reports and publications: Industry reports and publications can provide
information on market trends, consumer behavior, and competitive analysis.
 Government statistics: Government statistics such as census data and economic
indicators can provide insights into market size, growth potential, and demographic
trends.
 Market research firms: Market research firms can provide customized research and
analysis to help businesses better understand their target markets.
Others sources
 Advertising sales representatives
 Media representatives
 Sales representatives
 Website operators

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 1.3.2. Method of collecting market information
In order to collect the required information for segmentation purpose , we can use different
techniques such as :

 Surveys: Surveys can be conducted through various channels, such as email, phone, or
online, to collect data on customer preferences and behaviors.
 Interviews: Interviews can be conducted with customers, industry experts, or stakeholders
to gain insights into market trends and customer needs.
 Observations: Observing customer behavior in real-world settings can provide valuable
insights into their preferences and decision-making processes.
 Secondary research: Secondary research involves gathering information from existing
sources, such as industry reports, competitor websites, and government data.
 Online analytics: Online analytics tools can track website traffic, user behavior, and social
media engagement to gain insights into customer preferences and behavior.
 Customer feedback: Collecting feedback from customers through surveys, reviews, or
social media can provide insights into their satisfaction levels and preferences.
 Sales data analysis: Analyzing sales data can provide insights into which products or
services are most popular among different segments of customers.
 Focus groups: Focus groups can be used to gather in-depth insights into customer needs,
preferences, and behaviors.
 Competitor analysis: Analyzing competitor strategies and tactics can provide insights into
market trends and customer behavior.

1.4. Characteristic of good market segmentation

Basically either before or during segmenting the market , criteria‘s are required to measure
effectiveness of the segments so as here are main characteristic of effective segmentation are

 Measurability  Auctionable
 Substantiality  Nature of Demand
 Accessibility  General considerations
 Differentiability
The main purpose of market segmentation is to measure the changing behaviour patterns of
consumers. The size, profile, and other relevant characteristics of the segment must be

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measurable and obtainable in terms of data. Therefore, segments should be capable of giving
accurate measurements.

Substantiality refers to the size of the segmented market. Segments must be large enough to
be profitable. For small segment, it may not be possible for the marketer to develop separate
marketing mix for such non profitable segments.

The segment must be accessible, which means marketers must be able to reach the market
segments at lower costs. Segments must be reachable by company‘s sales persons,
distributors advertising media etc.

The segment should be large enough to be considered as a separate market. Such segments
must have individuality of their own so that it leads to different segments.

The segments which the company wishes to pursue must be auctionable in the sense that
there should be sufficient finance, personnel and capability to take them all. Hence,
depending upon the reach of the company, the segments should be selected.

Segmentation is required only if there are marked differences in the nature of demand.
Nature of demand refers to the different quantities demanded by various segments. Each
segmented market must exhibit difference in consumption rates from another segment.

Apart from the above characteristics, the segment must have growth potential, be profitable,
carries no unusual risks and has competitors who do not fight directly with the product or
brand.

Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of
a market or market segment: industry competitors, potential entrants, substitutes, buyers, and
suppliers.

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1.5. Segmentation analysis
Here is a list of few general steps, referred to as segmentation analysis, that will be most
often followed after the decision to employ market segmentation has been made. Examples of
questions to be answered during each step are also given.

Step-1 Define the purpose and scope of the segmentation

 What are our Marketing Objectives?

 Are we looking for new segments or determining how to better satisfy existing ones?
 Will we use existing data or invest time and money in new research?
 What level of detail will be needed in the segmentation analysis?

Step-2 Analyze total Market Data

 What is the character of the total market? (e.g. size)

 Are there basic differences between users and non-users of the product class?
 Are there any factors which clearly distinguish users from non-users or users of
different brands?
 What is our competitive position in the market now

Step-3 Develop segment profiles

 What factor seems to differentiate groups of consumers most clearly?

 Are the profiles of each segment internally consistent

Step-4 Evaluate segmentation

 What are the major similarities and differences among segments?

 Should the number of segments described be reduced or increased?
 How sensitive is this segmentation of the market to growth?

Step-5 Select target segment(s)

 Which segment(s) represent our best market opportunity?

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  What further details do we know about the target segment‘s characteristics and market
behaviour?
 If complete data on market behaviour for the target segment are not available, can we
make reasonable assumptions?
 Are we alone in competing for this target segment?

Step-6 Designing the marketing strategy for the target segment

 What type of product do these consumers want?

 What kinds of price, promotion or distribution tactics will best suit their needs?
 Would other segments react positively to a similar strategy? (if so, the segments
should probably be merged)

Step-7 Reappraisal of segmentation

 Do we have the resources to carry out this strategy?

 If we wish to broaden or change our target definition in the future, how flexible is the
strategy?
 If we wish to change some element of the strategy in the future, how would that
change probably influence the target segment?
 Does the target segment/strategic plan meet our objective? Does it fit our corporate
strengths?

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 SELF CHAECK FOR UNIT ONE
PART ONE: True or False

1. Market segmentation helps marketers identify groups of customers for targeted marketing
efforts.
2. Segmentation is not necessary when all customers within a market have similar needs.
3. Market segmentation can lead to increased sales volume for firms.
4. Demographic segmentation involves dividing the market based on geographical units.
5. Behavioral segmentation is based on buyer behavior during and after purchase.

PART TWO: Multiple choices

1. Market segmentation is advantageous to firms because it:

a) Decreases sales volume c) Limits marketing plan effectiveness
b) Creates innovations d) Ignores customer needs
2. Which of the following is a demographic variable used for market segmentation?
a) Attitude c) Personality
b) Climate d) Occupation
3. Geographic segmentation divides the market based on:
a) Age c) Area
b) Income d) Attitude
4. Behavioral segmentation is based on:
a) Religion c) Buyer behavior
b) Social class d) Personality
5. Psychographic segmentation involves grouping people based on:
a) Life stage c) Product characteristics
b) Gender d) Income
PART THREE: Give short answer

1. Write the importance of market segmentation

2. List basic type of market segmentation pattern
3. Write the logic of market segmentation

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 UNIT TWO: MARKET TARGET
This learning unit is designed to provide the trainees the necessary information regarding the
following content coverage and topics:

 Overview of targeting
 Targeting approach
 Descriptor of target market
 Target market strategy

This unit will also assist you to attain the learning outcomes stated in the cover page.
Specifically, upon completion of this learning guide, you will be able to:
 Recognize overview of targeting
 Classify targeting approach
 Identify descriptor of targeting
 Design target market strategy

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2.1. Overview of targeting
Target marketing is the process of assessing the relative worth of different market segments
and selecting one or more segments in which to compete. These become the target segments.
Titan is using the target marketing strategy very effectively. German car manufacturer
Mercedes target high status consumers with experience and prestigious motor cars. Therefore
A target market is a group of people that have been identified as the most likely potential
customers for a product because of their shared characteristics such as age, income, and
lifestyle.

According to David Cravens and others ― Target market is a group of existing or potential
customers within a particular product market towards which an organisation directs its
marketing efforts‖.

Target marketing involves the following four major steps:

1) Market segmentation: Markets are segmented on the basis of certain characteristic

such as sex, education, income, age etc.
2) Market targeting: It refers to evaluating each market segments attractiveness and
selecting one or more of the segments to enter. Thus target marketing and market
targeting are not one and the same. Market targeting is only a step in target marketing.
3) Designing the marketing mix: After selecting the segment, the next step is to design a
suitable product and other marketing mix elements for each segment selected.
4) Product Positioning: Market segmentation strategy and market positioning strategy
are like two sides of a coin. Target marketing begins with segmentation and ends with
positioning.

In evaluating and selecting different market segments, the firm must look at two factors: the
segment‘s overall attractiveness and the company‘s objectives and resources. How well does
a potential segment score on the five criteria? Does it have characteristics that make it
generally attractive, such as size, growth, profitability, scale economies, and low risk? Does
investing in the segment make sense given the firm‘s objectives, competencies, and

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resources? Some attractive segments may not mesh with the company‘s long-run objectives,
or the company may lack one or more necessary competencies to offer superior value.

2.2. Targeting approach

Target market selection is the next logical step following segmentation. Once the market-
segment opportunities have been identified, the organization got to decide how many and
which ones to target. Lot of marketing effort is dedicated to developing strategies that will
best match the firm‘s product offerings to the needs of particular target segments. The firm
should look for a match between the value requirements of each segment and its distinctive
capabilities. Marketers have identified four basic approaches to do this:

 Undifferentiated Marketing:

A firm may produce only one product or product line and offer it to all customers with a
single marketing mix. Such a firm is said to practice undifferentiated marketing, also
called mass marketing. It used to be much more common in the past than it is today. A
common example is the case of Model T built by Henry Ford and sold for one price to
everyone who wanted to buy. He agreed to paint his cars any colour that consumers
wanted, ‗as long as it is black‘. While undifferentiated marketing is efficient from a
production viewpoint (offering the benefits of economies of scale), it also brings in
inherent dangers. A firm that attempts to satisfy everyone in the market with one standard
product may suffer if competitors offer specialized units to smaller segments of the total
market and better satisfy individual segments.

 Differentiated Marketing

Firms that promote numerous products with different marketing mixes designed to satisfy
smaller segments are said to practice differentiated marketing. It is still aimed at
satisfying a large part of the total market. Instead of marketing one product with a single
marketing program, the firm markets a number of products designed to appeal to
individual parts of the total market. By providing increased satisfaction for each of many
target markets, a company can produce more sales by following a differentiated
marketing approach.
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  Concentrated Marketing

Rather than trying to market its products separately to several segments, a firm may opt
for a concentrated marketing approach. With concentrated marketing (also known as
niche marketing), a firm focuses its efforts on profitably satisfying only one market
segment. It may be a small segment, but a profitable segment. This approach can appeal
to a small firm that lacks the financial resources of its competitors and to a company that
offers highly specialized good and services. Along with its benefits, concentrated
marketing has its dangers.

 Micro marketing

Micro marketing this approach is still more narrowly focused than concentrated
marketing. Micro marketing involves targeting potential customers at a very basic level,
such as by the postal code, specific occupation or lifestyle. Ultimately, micromarketing
may even target individuals themselves. It is referred to as marketing to segments of one.
The internet allows marketers to boost the effectiveness of micromarketing.

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 Figure 2.1. Targeting approach

2.3. Descriptor of target market

Market description– describes the targeted segments in detail and provides context for the
marketing strategies and detailed action programs.

The more details you get, the better will be your result. A market description can be broken
down in the following way:

Demographics: It includes the demographic features of your market such as age, race,
gender, family structure, educational level, occupation, and income level. Companies do
online research by considering Census and other numbers for adding specific figures here.

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Geographical location: You should consider where the target markets live. Are they in the
suburbs or cities, a specific state, city, or region? You can enrich this portion by adding
detailed statistics regarding the number of probable customers in a rural community or
geographic market or can be all of the mentioned above. Is the service or product available
only to the individuals living in a specific state, region, or city?

Psychographics: Here you will describe the personality traits or psychology of your market,
like what are their initial attitudes and beliefs? What do they require more? Understanding
your customers from a psychographic viewpoint will be definitely fruitful because here you
begin finding out the way to best market your concept.

Consumer Nature: You should understand the nature or characteristics of the consumers
such as how does the target market purchase or use services or products? Do they shop
physically or online? Are they concerned about brand loyalty? How often do they shop for
the services or products you are offering?

Market Needs: Finally, the market description needs to clearly mention WHY the target
market needs the service or product you have decided to sell. Here you can clearly figure out
a need among your potential customer, a gap in the present business climate, and describe
how your idea or product will meet that need among the target market.

Identifying and describing your target market is essential to effectively market your
company's products or services. A well-defined target market enables you to create better
targeted marketing messages designed to appeal to your specific audience. The better you
define and describe your target audience, the better you can craft marketing that appeal to the
audience's characteristics and lifestyle, which makes them more likely to become customers.

2.4. Target market strategy

A target market strategy is a business plan focused on growing sales and brand awareness
within a specific group of consumers. To do this, businesses strategize based on
demographics that make up a market, which is an area or group specified for product sales.
Target markets represent the opportunity for new business and increased sales.

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There are four common target marketing strategies: mass (undifferentiated) marketing,
differentiated marketing, niche marketing, and micromarketing.

 Mass Marketing
Also known as undifferentiated marketing, mass marketing does not segregate the target
market and offers one strategy for the entire market. It aims to reach the most buyers, so
product exposure is maximized. Its success depends mainly on its reach to its target market
via national television, radio and print ad campaigns, and so on. Most items under the mass
marketing strategy are staples or commodity items. Brand and image influence is strong.
Most products retain customers who buy them until they wear out or are depleted.

 Differentiated Marketing
The next strategy is differentiated marketing, where the company segregates and offers
different promotions based on small target groups. Also known as multisegment marketing,
this strategy focuses on targeting each separate group by offering unique benefits. Different
groups may be based on gender, age, skin tone, etc. The marketing strategy is to lure
customers away from established market players and get their overall market share. Small
companies win when they address specific needs of a market sector that most established big
players fail to notice or give sufficient attention to.

Although differentiated marketing may be very successful in increasing overall market share
by establishing a customer base whose specific needs are met, it may be very expensive.
Research and development play a strong role in the sustainability of the company. Each
segment targeting a specific market will also require promotions and ad campaigns. It is
worth mentioning that the king of this strategy is Disney. The company has mastered
differentiated marketing and has successfully launched and sustained its market share in all
its different products.

 Niche marketing
Also called concentrated marketing, niche marketing targets only a few specific groups of
consumers. The company first chooses its image and defines its narrow target market. Instead

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of serving many segments or market sectors, niche marketing only focuses on very few and
stays in that group.
This strategy is suitable for small companies with budget limitations or start-ups where
company departments have few people and are still not established. It does not require
massive distribution, advertising, or promotions. Once noticed in the overall market, loyal
customers will keep the company profitable and running.

The weakness of this strategy is when the demand falls, the company may not be able to
survive its financial situation because there are no product lines that can offset the losses of
the decreasing demand. It is risky, like putting all their eggs in one basket.

 Micromarketing
Even smaller than niche marketing is the micromarketing strategy. Also known as mass
customization or one-to-one marketing, this strategy depends on the customization needs of
its target market. The customers specify their wants, and the company tries to serve the
requested product.

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 SELF CHAECK FOR UNIT TWO
PART ONE: True or False

1. Target marketing involves assessing the relative worth of different market segments and
selecting one or more segments to compete in.
2. Mercedes targets high-status consumers with experience and prestigious motor cars.
3. Undifferentiated marketing aims to satisfy individual segments of the total market with
specialized products.
4. Concentrated marketing focuses on profitably satisfying only one market segment.
5. Micro marketing involves targeting potential customers at a very basic level, such as by
postal code or specific occupation.

PART TWO: Multiple choices

1. Which marketing strategy aims to reach the most buyers by offering one strategy for the
entire market?

a) Differentiated marketing c) Undifferentiated marketing

b) Niche marketing d) Micromarketing

2. Differentiated marketing focuses on targeting each separate group by offering:

a) Unique benefits c) One marketing mix for all segments

b) Mass customization d) Low-cost products

3. Niche marketing targets only a few specific groups of consumers and:

a) Uses mass advertising campaigns c) Requires massive distribution

b) Serves all market sectors d) Focuses on a narrow target market

4. Micromarketing, also known as mass customization, depends on:

a) Serving the entire market c) Offering one marketing mix for all
segments
b) Customization needs of the target
market d) Large-scale advertising campaigns

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5. Which marketing strategy aims to address specific needs of a market sector that
established big players fail to notice?

a) Differentiated marketing c) Undifferentiated marketing

b) Niche marketing d) Micromarketing

PART THREE: Give short answer

1. Explain market targeting.

2. Write Types of targeting strategy.

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 UNIT THREE: TARGET PROFILE
This learning unit is designed to provide the trainees the necessary information regarding the
following content coverage and topics:

 Target market profile

 Consumer standard
 Market plan
 Consumer attitude
 Organization requirement

This unit will also assist you to attain the learning outcomes stated in the cover page.
Specifically, upon completion of this learning guide, you will be able to:
 Develop target market profile
 Determine Establish Consumer standard
 Prepare market plan for target market
 Know consumer attitude
 Recognize organization requirement

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3.1. Profile target market

Your target market profile lets you identify the group of people who are the most likely to
buy your product. You want to sell to them because your target customer is your ideal
customer. Figuring out your target market profile should be part of setting up your new
business. After all, in order to sell anything, you need to know who‘s going to be buying.

A market profile refers to a set of characteristics or attributes relating to a target population;

in business, a market profile refers to a target group of buyers. A market profile typically
includes demographic, psychographic, and geographic factors.

A target market is important for businesses to help identify the customers who can help to
boost sales and ultimately grow the company. A target market can be created by collecting
data about consumers using various methods. Surveys, product trials or free samples, and
competitor research are just some of the methods used to create a target market. Social media
can also help to provide target markets if the business is looking to use promotional methods
online. Secondary research from reputable sources such as universities and marketing firms
can contribute to the data needed to create the target market.

To define your target customers, ask yourself the following questions:

Who your customers are?

 Are your target customers male or female?

 How old are they?
 Where do they live?
 What is their marital status?
 Do they have children? How old are their children?
 What is their education level?
 What do they do for a living?
 What is their average income?
Customer interests and buying habits

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  What motivates a customer to make a purchase?
 What are your customers‘ common interests?
 Who makes the buying decisions?
 How often do they purchase a product?
 Do they shop online or prefer to see their product before they buy?
 How long does it take them to make a buying decision?
 What form of media does your target rely on for information?
 How far do they travel to make a purchase?
 What other products do they buy?

3.2. Consumer standard

Consumer standards are documents describing acceptable characteristics or usage for
products, materials and services used by individual consumers. They may specify
dimensional, performance or safety requirements for household products.

Your marketing will pay greater dividends if you take a precise approach, with a high-quality
list of prospective customers or leads. This will prove a more productive use of your
marketing budget than an untargeted, blanket approach to generating sales. Concentrating on
high-quality leads, based on your understanding and profiles of your prospective customers
and their needs, will give you a much better opportunity to convert them into sales.

Your list of prospective customers will only be of real use in your marketing campaign if it
precisely reflects the profile of your target audience. Ask yourself the following questions:

 Have the consumers of your product or service been identified, for example, their
geographic and demographic profile, their employment status, profession, special
interests and membership of clubs?
 Have you compiled a list of your prospective business customers in terms of where
they are located, their size, the name of the main buyer and repeat purchase rate?
 Have you identified the best sales channels to enable you to reach these target
customers?

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  Have these prospects opted into a list, giving their permission to receive marketing
messages about products in which they have expressed an interest?

3.2.1. Customer characteristic

Customer characteristics are traits and personality markers that affect the behaviours,
experiences and purchasing decisions of customers. For example, some customers may be
happy to accept your advice without much discussion, while others want to feel more in
control of their purchasing decisions.

 Informed customers
Informed or knowledgeable customers know a lot about your organisation, products or the
field in which you operate. Some consumers may have technical knowledge because they
study or work in a related field, while others may have done a lot of research before their
purchase.

 Indecisive customers
Indecisive customers are usually perfectionists looking for an ideal solution. They want to
ensure they've made the right decision before committing to a purchase, which often leads to
indecision.

 Eager customers
Customers eager for a solution to their problems may pose particular challenges.

 Opinionated customers
Opinionated customers have very strong opinions that they want to share with you, your
colleagues or even other customers.

 Social customers
Some customers are naturally social, which means they're more likely to communicate with
other customers in a physical retail space or online.

 Connected customers

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Connected customers spend a lot of their time online, talking to friends and using social
media sites to share their experiences and opinions. Like social customers and opinionated
customers, connected customers have a significant impact on your brand's image.

 International customers
International customers include customers from other cultures and countries. They may not
speak English well, which may pose additional challenges to customer service
representatives.

 Self-sufficient customers
Self-sufficient customers don't require a lot of help or assistance when they're shopping. They
may prefer to shop by themselves than with the help of a customer service representative.

 Critical customers
Critical customers may be the most challenging to deal with. They're typically perfectionists
and expect your service to be just as good as it was with their previous organisation.

 Expectant customers
Some customers expect more proactive customer service than others.

3.2.2. Customer profile

A customer profile is a data-driven document that describes your current customers. Profiles
are based on surveys that gather purchasing behaviors, pain points, psychographic data, and
demographics. A customer profile can help you find segments of customers with
commonality so you can target them in your sales and marketing campaigns.

If you don't create customer profiles, you risk marketing to a nondescript audience, leading to
wasted time and closed-lost deals.

Each profile should contain customer pain points, interests, buying patterns, demographic
data, motivations, interaction history, and more. These details can help your business
understand how consumers engage with your brand and products, so you can customize
marketing campaigns, tailor messaging and conversations, and provide personalized support.
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The customer profile you want to create helps determine the types of data you need to collect.
Here are common ways to segment your customers to create the best customer profile
possible.
Demographic
Demographic profiling defines your customers by who they are. This type of segmentation
groups customers by personal characteristics like:

 Age  Ethnicity  Education

 Gender  Income
 Marital status  Job title
Psychographic
Psychographic profiling defines why customers buy your products or services. This type of
customer profiling segments customers by:

 Personality traits  Values and beliefs  Political affiliation

 Attitudes  Lifestyle
 Opinions  Religions
Behavioral

Behavioral profiling defines how your customers interact with your brand. This type of
segmentation groups customers by behavioral tendencies like:

 Buying patterns  How they use your products or

 Spending habits services
 Brand interactions  Types of feedback

Geographic

Geographic profiling defines your customers by their physical location and where they shop.
This type of profiling separates customers by personal characteristics, such as:

 Physical location  Culture

 Language  Workplace
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 Figure 3.1. Sample customer profile template

3.3. Market plan

A marketing plan is a strategic roadmap that businesses use to organize, execute, and track
their marketing strategy over a given period. Marketing plans can include different marketing
strategies for various marketing teams across the company, all working toward the same
business goals.
A marketing plan is a strategic roadmap that businesses use to organize, execute, and track
their marketing strategy over a given period. Marketing plans can include different marketing
strategies for various marketing teams across the company, all working toward the same
business goals. Here are some steps during develop market plan

1. State your business's mission.

2. Determine the KPIs for this mission.
3. Identify your buyer personas.

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 4. Describe your content initiatives and strategies.
5. Clearly define your plan's omissions.
6. Define your marketing budget.
7. Identify your competition.
8. Outline your plan's contributors and their responsibilities.

3.4. Consumer attitude

Social psychologists reserve the term attitude to refer to our relatively enduring evaluation of
something, where the something is called the attitude object. The attitude object might be a
person, a product, or a social group (Albarracín, Johnson, & Zanna, 2005; Wood, 2000).

Consumer attitude may be defined as a feeling of favorableness or unfavorableness that an

individual has towards an object. As we, all know that an individual with a positive attitude is
more likely to buy a product and this results in the possibility of liking or disliking a product.

Customer attitudes are a composite of a person's beliefs, feelings, and behavioral intentions
toward your business. These attitudes are often formed based on a blend of factors.
Particularly influential are an individual‘s past experiences that play a considerable role in
developing and solidifying certain attitudes. We as individuals learn attitudes through
experience and interaction with other people. Our attitudes toward a firm and its products as
consumers greatly influence the success or failure of the firm‘s marketing strategy. Attitudes
and attitude change are influenced by consumer‘s personality and lifestyle. Consumers
screen information that conflicts with their attitudes. We distort information to make it
consistent and selectively retain information that reinforces our attitudes, in other words,
brand loyalty. But, there is a difference between attitude and intention to buy (ability to buy).

The old saying goes that attitude is everything. When it comes to consumers, that may be a
bit overstated, but it‘s safe to say attitudes do play a vital role in forming consumer opinions
and driving decisions. With that in mind, it‘s important to be proactive in your efforts to gain
a clearer perspective on who your customers are, as well as the attitudes they possess that
may help explain their actions and behaviorsCustomer attitudes are a composite of a person's
beliefs, feelings, and behavioral intentions toward your business. These attitudes are often

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formed based on a blend of factors. Particularly influential are an individual‘s past
experiences that play a considerable role in developing and solidifying certain attitudes.

Therefore Consumer attitude means basically comprises of beliefs towards, feelings towards
and behavioral intentions towards some objects.

Figure 3.2. Component of attitude

 Belief plays a vital role for consumers because, it can be either positive or negative
towards an object. For example, some may say tea is good and relieves tension, others
may say too much of tea is not good for health. Human beliefs are not accurate and can
change according to situations.
 Consumers have certain specific feelings towards some products or brands. Sometimes
these feelings are based on certain beliefs and sometimes they are not. For example, an
individual feels uneasy when he thinks about cheese burst pizza, because of the
tremendous amount of cheese or fat it has.
 Behavioural intentions show the plans of consumers with respect to the products. This is
sometimes a logical result of beliefs or feelings, but not always. For example, an
individual personally might not like a restaurant, but may visit it because it is the hangout
place for his friends.
Functions of Attitudes

The following are the functions of attitudes

 Adjustment Function − Attitudes helps people to adjust to different situations and

circumstances.
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  Ego Defensive Function − Attitudes are formed to protect the ego. We all are
bothered about our self-esteem and image so the product boosting our ego is the target
of such a kind of attitude.
 Value Expression Function − Attitudes usually represent the values the individual
posses. We gain values, though our upbringing and training. Our value system
encourages or discourages us to buy certain products. For example, our value system
allows or disallows us to purchase products such as cigarettes, alcohol, drugs, etc.
 Knowledge Function − Individuals‘ continuously seeks knowledge and information.
When an individual gets information about a particular product, he creates and
modifies his attitude towards that product.
Models of Attitude

The following are the models of attitude

Tri-component Model − According to tri-component model, attitude consists of the

following three components.
A. Cognitive Component − The first component is cognitive component. It consists of an
individual‘s knowledge or perception towards few products or services through personal
experience or related information from various sources. This knowledge, usually results
in beliefs, which a consumer has, and specific behavior.
B. Affective Component − The second part is the affective component. This consists of a
person‘s feelings, sentiments, and emotions for a particular brand or product. They treat
them as the primary criteria for the purpose of evaluation. The state of mind also plays a
major role, like the sadness, happiness, anger, or stress, which also affects the attitude of a
consumer.
C. Conative Component - The last component is conative component, which consists of a
person‘s intention or likelihood towards a particular product. It usually means the actual
behavior of the person or his intention.
The ABC’s of Attitudes- Our attitudes are made up of cognitive, affective, and behavioral
components. Consider an environmentalist‘s attitude toward recycling, which is probably
very positive:

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  In terms of affect: They feel happy when they recycle.

 In terms of behavior: They regularly recycle their bottles and cans.

 In terms of cognition: They believe recycling is the responsible thing to do.

The image below shows how a person‘s positive attitude towards composting would be
comprised of a strong alignment among their feelings towards composting (―affect‖), their
actions when it comes to composting (―behaviour‖), and their thoughts about composting
(―knowledge‖).

Figure 3.3. Model of attitude

3.5. Organization requirement

The goal of any organization is to be successful—to fulfill its purpose. To achieve this
success, an organization requires certain things of its people. Motivation plays an important
part in achieving this. The Organizational Profile is the foundation of the Report and arguably
its most critical component. This document provides a general overview of the organization,
its history, its leadership and strategic plan as well as anything else a potential candidate
might be interested in knowing on a broad level. Our consultants work with each client to

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identify their organization‘s core values and create an Organizational Profile that is reflective
of both their current state and future goals.

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 SELF CHAECK FOR UNIT THREE
PART ONE: True or False

1. A target market profile helps identify the group of people most likely to buy a product.
2. Market profiles typically include demographic, psychographic, and geographic factors.
3. Surveys, product trials, and competitor research are methods used to create a target
market.
4. Secondary research from reputable sources cannot contribute to the data needed to create
a target market.
5. Creating a precise target audience list based on customer profiles leads to a more
productive use of marketing budget.

PART TWO: Multiple choices

1. Which factor is typically included in a demographic profile of customers?

a) Personality traits c) Job title

b) Buying patterns d) Types of feedback

2. What type of customers spend a lot of their time online and have a significant impact on a
brand's image?

a) Informed customers c) Connected customers

b) Indecisive customers d) Self-sufficient customers

3. What type of customer profiling segments customers based on their lifestyle and values?

a) Demographic profiling c) Behavioral profiling

b) Psychographic profiling d) Geographic profiling

4. What type of customer profiling segments customers based on their buying patterns and
brand interactions?

a) Demographic profiling c) Behavioral profiling

b) Psychographic profiling d) Geographic profiling

5. What are customer attitudes composed of?

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a) Beliefs, feelings, and behavioral c) Buying patterns, spending habits, and
intentions brand interactions

b) Personality traits, opinions, and values d) Physical location, language, and culture

PART THREE: Give short answer

1. List basic customer requirement.

2. What is customer profile?
3. List basic model of customer attitude.

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 UNIT FOUR: POSITIONING
This learning unit is designed to provide the trainees the necessary information regarding the
following content coverage and topics:

 Overview of positioning
 Positioning plan
 Positioning plan adjustment

This unit will also assist you to attain the learning outcomes stated in the cover page.
Specifically, upon completion of this learning guide, you will be able to:
 Internalize Overview of positioning
 Develop Positioning plan
 Prepare Positioning plan adjustment

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4.1. Overview of positioning
Having chosen an approach for reaching the firm‘s target segment, marketers must then
decide how best to position the product in the market. The concept of positioning seeks to
place a product in a certain ‗position‘ in the minds of the prospective buyers. Positioning is
the act of designing the company‘s offer so that it occupies a distinct and valued place in the
target customers‘ minds. In a world that is getting more and more homogenized,
differentiation and positioning hold the key to marketing success!

Meaning of positioning

In the words of Kotler, ―Positioning is the act of designing the company‘s offer and image so
that it occupies a distinct and valued place in the target consumers minds.‖ In short, the
process of creating an image for a product in the minds of targeted customers is known as
product positioning. Close-up tooth paste is looked upon by the consumers more as a mouth
wash than a teeth cleaner, while ‗pepsodent‘ has created an impression of germ killer in the
consumers minds.
The positioning gurus, Al Ries and Jack Trout define positioning as: Positioning is … your
product as the customer thinks of it. Positioning is not what you do to your product, but what
you do to the mind of your customer. Every product must have a positioning statement.

Steps in product positioning

1. Identifying potential competitive advantages: Consumers generally choose products and

services which give them greatest value. The key to winning and keeping customers is to
understand their needs and buying processes far better than the competitors do and deliver
more values.
2. Identifying the competitors position: When the firm understands how its customers view
its brand relative to competitors, it must study how those same competitors position
themselves.
3. Choosing the right competitive advantages: It refers to an advantage over competitors
gained by offering consumers greater value either through lower price or by providing
more benefits.
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4. Communicating the competitive advantage: The company should take specific steps to
advertise the competitive advantage it has chosen so that it can impress upon the minds of
consumers about the superiority claimed in respect of the product over its competing
brands.
5. Monitoring the positioning strategy: Markets are not stagnant. They keep on changing.
Consumer tastes shift and competitors react to those shifts. After a desired position is
developed, the marketer should continue to monitor its position through brand tracking
and monitoring.

Elements of positioning
It is concerned with the following four elements.

 The Product: Design, special feature, attributes, quality, package etc. of product create
its own image in the minds of the consumers. Material ingredient of a product is also
important in the process of product positioning.
 The Company: The goodwill of a company lends an aura to its brand. For example,
Tata, Godrej, Bajaj etc have very good reputation in the market
 The Competitors: Product image is build in consumers mind in relation to the
competing product. Thus a careful study of competition is required.
 The Consumer: Ultimate aim of positioning policy is to create a place for the product in
consumers‘ minds. Therefore, it becomes necessary to study the consumer behaviour
towards the product.

4.1.1. Type of market positioning strategy

A positioning strategy—also known as a market or brand positioning strategy—is a type of

marketing strategy that focuses on distinguishing a brand from its competitors. The goal of a
positioning strategy is to influence consumer perception by effectively communicating a
brand‘s competitive advantage.

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 Figure 4.1. positioning map

There are several types of positioning strategies. A few examples are positioning by:

 Positioning by Brand Endorsement: Marketers use the names of company‘s

powerful brands for line extentions or while entering another product category. Lux,
Surf, Dettol etc.
 Positioning by Product attributes and benefits: Associating your brand/product
with certain characteristics or with certain beneficial value
 Positioning by Product price: Associating your brand/product with competitive
pricing
 Positioning by Product quality: Associating your brand/product with high quality
 Positioning by Product use and application: Associating your brand/product with a
specific use
 Positioning by Competitors: Making consumers think that your brand/product is
better than that of your competitors
 Positioning by Unique value proposition: What is your product's unique value
proposition? Highlight the features and benefits of your product as uniquely equipped
to meet the specific needs of your customer base.
 Positioning by Corporate Identity: The companies that have become a tried and
trusted household name.For example, Tata, Sonyetc

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  Positioning by use, Occasion and Time: It is to find an occasion or time of use and
sit on it. For example, Vicks vaporub is to be used for child‘s cold at night.
 Positioning by Product Category: Brand is perceived to be another product
category. Eg. Maruti positioned its van as omni , family car.
 Positioning by Product User: Positioning the product as an exclusive product for a
particular class of customers. Eg. Scooty as a two wheeler for teenagers.
 Positioning by Symbols: Some companies use some symbols for positioning their
products. Eg.vodafone symbol.

4.1.2. Importance of market positioning

We‘ve prepared the top benefits of product positioning that show why it‘s one of the most
effective marketing tactics. It helps in:

• Identifying key benefits of a product and matching them with customers‘ needs;
• Finding competitive advantage even when the market changes;
• Meeting customers‘ expectations;
• Reinforcing your brand‘s name and its products;
• Winning customer loyalty;
• Creating an effective promotional strategy;
• Attracting different customers;
• Improving competitive strength;
• Launching new products;
• Presenting new features of existing products.

4.1.3. Criteria of good market positioning

Positioning is all about differentiating your offer from the one of your competitors – product,
price, place, and promotion, all providing an opportunity for differential advantage. For
positioning to be successful, 4 factors must be present:

Clarity – the positioning statement must be clear both in terms of target market and
differential advantage. Simplicity ensures for a message to be understood, believed, and
remembered.

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Consistency – when people are overwhelmed by marketing message, what cuts through the
noise is consistency. The more an audience hears the positioning message (―Because you are
worth it‖), would immediately position the brand in the customer‘s minds evoking emotions
before they even hear the brand name.

Credibility – the positioning message must be believable. If customers are going to trust the
brand, they need to see clear alignment between the company‘s vision, values, and identity
and the positioning statement for its products.

Competitiveness – the differential advantage offered by your company must offer something
of superior value than any other option on the market provided by the competitors.

4.2. Positioning plan

A positioning strategy is a strategic marketing plan that helps you determine where your
business stands in the market and how it should be positioned to attract more customers. A
poorly positioned product will never reach its full potential no matter how well it is marketed,
while an excellent positioning strategy can be all that stands between failure and profitability.

A successful positioning strategy can help companies become an authority in their field,
distinguish themselves from competitors for better brand recognition, or even create new
markets by identifying unmet needs among consumers. More specifically, businesses may
use this type of approach when they are going up against established players who have been
around longer as well as those with the more incredible distribution channel.

Creating your own brand positioning strategy involves diving deep into the details of your
brand and discovering what you do better than anyone else. These steps will help you create
a brand positioning strategy that's unique to your business.

1. Determine your current brand positioning.

2. Create a brand essence chart.
3. Identify your competitors.
4. Conduct competitor research.

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 5. Identify your unique value proposition.
6. Build a brand positioning framework.
7. Create your positioning statement.
8. Evaluate whether your positioning works.
9. Establish an emotional connection with prospects and customers.
10. Reinforce your brand's differentiating qualities during the sales process.
11. Create value.
12. Ensure that customer-facing employees embody your brand.

4.3. Positioning plan adjustment

Market repositioning is when a company changes its existing brand or product status in the
marketplace. Repositioning is usually done due to declining performance or major shifts in
the environment. Many companies, instead of repositioning, choose to launch a new product
or brand because of the high cost and effort required to successfully reposition a brand or
product.

Levels of brand positioning

There are three types of positioning strategies: comparative, differentiation, and

segmentation.

Comparative positioning: Comparative positioning is when a company compares its product

or service with alternatives that are available to its target demographic.

This helps establish their USPs and highlights their value when compared with other
companies on the market.

Differentiation positioning: Differentiation positioning is when a company focuses on

features that can‘t be copied by a market rival, i.e. they use the feature to ‗differentiate‘
themselves from competitors.

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This approach is useful because it allows companies to earmark a particular feature they‘re
able to offer, that others cannot.

Segmentation positioning: If a company is targeting more than one target audience,

segmentation positioning is beneficial, as it helps address the specific needs of each group.

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 SELF CHAECK FOR UNIT FOUR
PART ONE: True or False

1. Positioning is the act of designing a company's offer and image to occupy a distinct place
in the minds of target customers.
2. Product positioning is the process of creating an image for a product in the minds of
targeted customers.
3. Monitoring the positioning strategy is unnecessary as markets and consumer preferences
do not change.
4. The elements of positioning include the product, the company, competitors, and consumer
behavior.
5. A positioning strategy focuses on distinguishing a brand from its competitors and
influencing consumer perception.

PART TWO: Multiple choices

1. Which type of positioning strategy involves associating your brand/product with certain
characteristics or beneficial values?
a) Positioning by Brand c) Positioning by Product Price
Endorsement d) Positioning by Product Quality
b) Positioning by Product
Attributes and Benefits
2. What is one of the key benefits of product positioning?
a) Creating an effective c) Reinforcing your brand's name
promotional strategy and its products
b) Finding a competitive d) Attracting different customers
advantage even when the
market changes
3. Which factor must be present for successful positioning?
a) Complexity c) Credibility
b) Inconsistency d) Uniqueness
4. What does a positioning strategy help determine?
a) Market demand b) Competitor strategies
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 c) Product pricing d) Where the business stands in
the market
5. What type of positioning strategy involves comparing a company's product or service
with alternatives available to its target demographic?
a) Comparative positioning c) Segmentation positioning
b) Differentiation positioning d) Competitive positioning

PART THREE: Give short answer

1. What is positioning?
2. Write the difference between positioning and repositioning
3. List techniques of positioning

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 The Experts/trainers who developed the curriculum and TTLM

No Name Qualification Region College Mobile E-mail

number

1 TADDESE TESFAYE BUSINESS A.A Lideta 0922934005 [email protected]

GUTA ADMINISTRATION(MBA) Manufacturing
College

2 ENDALE MESFIN Marketing and Sales A.A Addis Ketema 0912054592 [email protected]
BERHE Management (BA) Industrial College

Marketing Management (MA)

3 ADDISALEM BUSINESS A.A Lideta 0920522464 [email protected]

MINUWEYELET ADMINISTRATION(MBA) Manufacturing
MEKONNEN College

4 ADMASIE MAMUYE Business Education(BA) AA Ministry of Labor 0912 [email protected]

and Skills
Management of Vocational
Education (MA)

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 5 WUBISHETABERA MBA AA Yeka Industrial 0916739378 [email protected]
GICHAMO College

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