Segmentation, Targeting and

Positioning
 Introduction
• Market Segmentation -Dividing a market into distinct groups
of buyers who have different needs, characteristics, or
behaviors, and who might require separate products or
marketing programs.
• Market Targeting -The process of evaluating each market
segment’s attractiveness and selecting one or more segments
to enter.
• Positioning -Arranging for a product to occupy a clear,
distinctive, and desirable place relative to competing products
in the minds of target consumers.
 Market Segmentation
• Market segmentation involves dividing a market into smaller
segments of buyers with distinct needs, characteristics, or
behaviors that might require separate marketing strategies or
mixes.
• The company identifies different ways to segment the market
and develops profiles of the resulting market segments.
 Major Segmentation Variables
1. Geographic segmentation
• It calls for dividing the market into different geographical
units, such as nations, regions, states, cities, or even
neighborhoods.
• A company may decide to operate in one or a few
geographical areas or operate in all areas but pay attention to
geographical differences in needs and wants.
2. Demographic Segmentation
i. Age segmentation- Dividing a market into different age
groups.
• Companies like Coca-Cola often target young adults aged 15
to 25 in their marketing campaigns by featuring youthful
individuals to appeal to this demographic.
•
ii. Family Life-cycle segmentation- It includes bachelors,
newly married, full nest, empty nest and solitary survivor.
• When a person gets married and starts a family, a host
of products such as furniture, kitchen appliances, and
cooking gadgets are needed.
iii. Gender segmentation -Dividing a market into different
segments based on gender. For example:
• Coke Zero was launched which specifically targeted
men.
iv. Income segmentation- Dividing a market into different
income segments. The marketers of products and services such
as automobiles, clothing, and cosmetics have long used income
segmentation.
3. Psychographic segmentation
• It divides buyers into different segments based on lifestyle,
personality characteristics or values.
• People in the same demographic group can have very
different psychographic characteristics.
4. Behavioral Segmentation
i. Benefits Sought- A powerful form of segmentation is
grouping buyers according to the different benefits
that they seek from a product.
Brands like Pantene, Sunsilk, Head & Shoulders offer
variant products targeted at diverse benefit segments.
ii. Decision Roles- People play five roles in a buying decision:
Initiator, Influencer, Decider, Buyer and User.
• In pharmaceutical products, for example, since doctors
prescribe specific brands of medicines, pharmaceutical
companies influence doctor’s prescription behavior by
providing technical information about products through
periodical visits by medical representatives, conferences or
free samples.
• Women play a significant role in deciding on brands of kitchen
appliances and initiating the purchase of many household
products. Therefore, many advertisements and promotional
efforts for such products are directed at homemakers.
iii. Occasions- Buyers can be grouped according to occasions
when they get the idea to buy, actually make their purchase, or
use the purchased item. Occasion segmentation can help firms
build up product usage. For example: Valentine’s Day, Mother’s
Day

iv. User Status- Markets can be segmented into nonusers, ex-

users, potential users, first-time users, and regular users of a
product. Marketers want to reinforce and retain regular users,
attract targeted nonusers, and reinvigorate relationships with ex-
users.
v. Usage Rate- Markets can also be segmented into light, medium,
and heavy product users.
• Developing customers into heavy users is the goal of airlines
frequent flier programs.
• Young males are heavy beer drinkers; that’s why brands like Coors
Light, Budweiser, and Molson Canadian devote so much attention
to them
vi. Loyalty Status- A market can also be segmented by consumer
loyalty:
1. Hard-core loyals- Consumers who buy one brand all the time.
2. Split loyals- Consumers who are loyal to two or three brands.
3. Shifting loyals- Consumers who shift loyalty from one brand to
another.
4. Switchers- Consumers who show no loyalty to any brand.
Bases for Segmenting Business Markets
 Requirements for Effective
Segmentation
• Measurable: Segments must be identifiable. The size, purchasing
power, and profiles of the segments should be measurable.
• Accessible: The market segments can be effectively reached and
served.
• Substantial: The market segments must be large or profitable
enough to serve. A segment should be the largest possible
homogeneous group worth pursuing with a tailored marketing
program.
• Differentiable: The segments should conceptually be
distinguishable and respond differently to different marketing mix
elements and programs.
• Actionable: Effective programs can be designed for attracting and
serving the segments.
 Market targeting

• The process of evaluating each market segment’s

attractiveness and selecting one or more segments to enter.
1. Evaluating Market Segments
• Size
• Sales
• Growth rate
• Expected profitability
2. Selecting Target Market Segments
i. Undifferentiated Marketing
• Using an undifferentiated marketing (or mass
marketing) strategy, a firm might decide to ignore
market segment differences and target the whole
market with one offer.
• Examples : When Henry Ford introduced the Ford
Automobile, he offered one model to the market with
one color option, black.
• Coca-Cola used this strategy when Coke was first
introduced in a single flavor and single size.
ii. Differentiated Marketing
• Using a differentiated marketing (or segmented
marketing) strategy, a firm decides to target several
market segments and designs separate offers for each.
• The Gap for instance, has different store formats-
Banana Republic, The Gap, and Old Navy to appeal to
fashion forward, traditional, and more price-sensitive
segments.
• The Gap has further differentiated the market into
GapKids, babyGap, GapMaternity and GapBody.
iii. Concentrated Marketing
• Using a concentrated marketing (or niche marketing)
strategy, firm selects a market niche (one segment of a
market) for targeting its marketing efforts.
• Porsche, targets an upscale automobile market through “class
appeal, not mass appeal”.
• The manufacturer of Rolex watches has chosen to concentrate
on the luxury segment of the watch market.
iv. Micromarketing
• Tailoring products and marketing programs to the needs and
wants of specific individuals and local customer segments; It
includes local marketing and individual marketing.
• Local marketing -Tailoring brands and promotions to the
needs and wants of local customer segments e.g. cities,
neighborhoods, and even specific stores.
• Individual marketing -Tailoring products and marketing
programs to the needs and preferences of individual
customers—also called one-to-one marketing, customized
marketing, and markets-of-one marketing.
3. Choosing a Targeting Strategy
• Companies need to consider many factors when choosing a market-
targeting strategy:
• Company’s resources
• Degree of product variability
• Product’s life-cycle stage
• Competitors’ marketing strategies
 Differentiation and Positioning
• Beyond deciding which segments of the market it will target,
the company must decide on a value proposition—how it will
create differentiated value for targeted segments and what
positions it wants to occupy in those segments.
 Identifying Possible Value Differences and
Competitive Advantages
• A company can differentiate and position itself as providing
superior customer value, it gains competitive advantage.
• In what specific ways can a company differentiate itself or its
market offer? It can differentiate along the lines of:
 Product,
 Services,
 Channels,
 People, or
 Image.
 Choosing the Right Competitive
Advantages
• How Many Differences to Promote.
• Advertising executive Rosser Reeves, for example,
said a company should develop a unique selling
proposition (USP) for each brand and stick to it.
• Thus, Walmart promotes its unbeatable low
prices, and Burger King promotes personal choice
—“have it your way.”
• Domino’s value proposition is – a good pizza
delivered to your door within 30 minutes of
ordering.
Which Differences to Promote
• Important: The difference delivers a highly valued benefit to
target buyers.
• Distinctive: Competitors do not offer the difference, or the
company can offer it in a more distinctive way.
• Communicable: The difference is communicable and visible
to buyers.
• Preemptive: Competitors cannot easily copy the difference.
• Affordable: Buyers can afford to pay for the difference.
• Profitable: The company can introduce the difference
profitably.
 Positioning
“The place a brand occupies in the customer’s mind in relation to
competing products.”
• In a marketing plan, how a brand is positioned is described in
a positioning strategy statement.
• Example: The core of Apple’s brand is innovation, beautiful
design, and an ability to bring warmth and passion to those
customers who may be averse to technical gadgetry, but need
it nonetheless to survive in today’s world.

All marketing strategies must fit with the positioning strategy.

Positioning (2 of 2)
Product Differentiation Positioning
A strategy that focuses on the unique attributes or benefits
of the product.
 Technical Innovation Positioning
A strategy that demonstrates continued technical
leadership in a product category.
 Tasks in Positioning
1. Determining a frame of reference by identifying the target
market and relevant competition
i. Identifying competitors
• To determine category membership- the products or sets of
products with which a brand competes and which function as close
substitutes.
ii. Analysing the competitors
• To conduct a SWOT analysis, to gather information about each
competitor’s real and perceived strengths and weaknesses.
2. Identifying Optimal Points-of-Difference and Points-of-Parity
• 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.
• Strong brands may have multiple points-of-difference.
• For example: Nike (performance and innovative technology) and
Southwest Airlines (value, reliability and fun personality).
• 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.
3. Brand Mantra
• Brand mantras are short, three-to-five words phrases
that capture the irrefutable essence or spirit of the
brand positioning.
• They communicate what the brand is and what it is not.
They are designed to capture the brand’s point-of-
difference.
• Nike’s brand mantra- Authentic Athletic Performance
• McDonald’s- Food, Folks and Fun
• Disney- Fun, Family and Entertainment
Segmentation and Targeting Process
 References
• Kotler, P., & Keller, K. L. (2019). Marketing
management. Pearson.
• Tuckwell & Jaffey. (2019). Think Marketing.
Pearson.
THANK YOU