Marketing

Management

SUBJECT CODE – MS5CO07

COURSE – MBA II SEM
Contents to be Covered
Unit II (Segmentation, Targeting and Positioning)
• Levels and patterns of market segmentation
• Market Segmentation Procedure
• Needs for effective segmentation
• Bases for segmenting a consumer market
• Evaluating and selecting segments
• Market Targeting
• Positioning – Concept, Positioning strategy, and Differentiation Tools
Concept of (STP) Segmentation,
Targeting and Positioning
• In marketing, segmenting, targeting and positioning (STP) is a broad framework that
summarizes and simplifies the process of marketing by proceeding in a systematic way
Let’s understand STP.!!
• To grow or start a business, we don’t have to sell to everyone. There are not a lot of
products in the online world that appeal to every single person on Earth.
• So, instead of convincing ourselves that everyone can be our customer, we need to direct
our focus towards finding our target market and selling our products/services there.
• If we discover the people that are most likely to buy from us and target the marketing
efforts towards them, the sales process will be a breeze.
• Discovering your customers and targeting them is the concept that stands behind the STP
model of marketing. The acronym stands for the following key parts of the concept:
Segmentation
• Definition: Market Segmentation is the process of dividing your target market into smaller groups of people that
share common characteristics
Why Market Segmentation is needed??
• Not all individuals have similar needs. A male and a female would have varied interests and liking towards different
products. A kid would not require something which an adult needs. A school kid would have a different requirement
than an office goer. Market Segmentation helps the marketers to bring together individuals with similar choices and
interests on a common platform.
• Market Segmentation helps the marketers to devise appropriate marketing strategies and promotional schemes
according to the tastes of the individuals of a particular market segment
• Market segmentation helps the marketers to understand the needs of the target audience and adopt specific
marketing plans accordingly.
• Market segmentation also gives the customers a clear view of what to buy and what not to buy
• Market segmentation helps the organizations to target the right product to the right customers at the right time.
Geographical segmentation classifies consumers according to their locations. A grocery store in colder states of the
country would stock coffee all through the year as compared to places which have defined winter and summer
• Segmentation helps the organizations to know and understand their customers better
Levels of Segmentation
 Mass Marketing

• Example #1
Brands like Patanjali,
McDOnalds use mass
marketing by running TV
commercials, placing
magazine advertisements, and
pushing their products on
other channels, for example,
billboards and social media. In
most cases, organizations
collaborate with celebrities to
gain consumers' trust.
Example: Luxury Brands
Local Marketing
Bases of Segmentation
Example: Segmentation
Why is demographic segmentation in marketing so
important?

• Companies reduce the risk of running campaigns to uninterested

consumers, which quickly increases ROI
• Build long-lasting customer relationships
• Improve your products and services
• Optimizing marketing strategies
Targeting
• Definition : Targeting is a follow on process from segmentation, and is
the process of Evaluating and Selecting market segments and
planning the advertising media used to make the segment appealing
• Market targeting should not be confused as synonymous to market
segmentation.
• Through segmentation, a firm divides the market into many
segments. But all of them need not form the target market. The target
market signifies only those segments that it wants to adopt as its
markets. Thus the target markets are selected out of the segments
formed.
Five Patterns of Target Market selection)

After evaluating the segments on

the basis of segment potential,
competitor’s position and
potential goal and objective
achievement, the firm can select the
segment that will be the target
market(s). The firm can consider five
patterns of target market selection.
They are as follows:
1. Single Segment Concentration
2. Selective Segment Specialisation
3. Product Specialisation
4.Market Specialisation
5. Full Coverage
Definition: Market positioning refers to the process of establishing the image or identity of a brand
or product so that consumers perceive it in a certain way.
Brand positioning is also referred to as a positioning strategy, brand strategy, or a brand positioning
statement
For example:
• A car maker may position itself as a luxury status symbol. Whereas a battery maker may position its
batteries as the most reliable and long-lasting. And a fast-food restaurant chain may position itself as a
provider of cheap and quick standardized meals.
• A coffee company may position itself as a source of premium upscale coffee beverages. Then a retailer
might position itself as a place to buy household necessities at low prices. And a
computer company may position itself as offering hip, innovative, and use-
friendly technology products.
Ideal Positioning
 Examples of
Brand
Positioning
• Colgate is positioned as protective.
• Patanjali can be trusted as it is fully organic.
• Woodland is tough and perfect for outdoors.
• Coca-Cola brings happiness.
• Axe deodorants have a sexual appeal
Positioning & Repositioning of a
Brand
Positioning
• Positioning of a brand or product is a strategic process that involves marketing the brand
or product in a certain way to create and establish an image or identity within the minds
of the consumers in the target market.
• Market positioning of a brand or product must be maintained over the life of the brand
or product.
• Doing this requires ongoing marketing initiatives intended to reinforce the target
market’s perceptions of the product or brand.
Repositioning
• Repositioning a brand or product means altering its place in the minds of the consumer,
or essentially changing the brand’s or product’s image or identity.
• When you are repositioning, or trying to change the consumers’ perception of a brand
or product after it has already been solidified, may confuse or alienate consumers in the
target market.
Brand Repositioning Example
What is a Brand Positioning
Statement?
A positioning statement is a one or two sentence declaration that communicates
your brand’s unique value to your customers in relation to your main competitors.
There are 7 key steps to effectively clarify your positioning in the marketplace:
1. Determine how your brand is currently positioning itself
2. Identify your direct competitors
3. Understand how each competitor is positioning their brand
4. Compare your positioning to your competitors to identify your uniqueness
5. Develop a distinct and value-based positioning idea
6. Craft a brand positioning statement
7. Test the efficacy of your brand positioning statement
Positioning Statements versus
Taglines
• Brand positioning statements are often confused with company
taglines or slogans. Positioning statements are for internal use. These
statements guide the marketing and operating decisions of your
business. A positioning statement helps you make key decisions that
affect your customer’s perception of your brand.
• A tag line is an external statement used in your marketing efforts.
Insights from your positioning statement can be turned into a tagline,
but it is important to distinguish between the two.
How Brand positioning is measured?
1. Perceptual Maps
Definition: A perceptual map is a visual representation of the perceptions of customers or potential customers about specific
attributes of an organization, brand, product, service, or idea
Perceptual maps are also referred to as position maps and market maps
Why create a Perceptual Map?
• Understanding what your customers think about you and your competitors is crucial to your success. A perceptual map helps
organizations to:
• Understand the thoughts and behaviours of consumers.
• Gain insight into their competition
• Track market trends
• Identify gaps in the market
Perceptual Maps are Used for:
• Environmental scanning prior to planning
• Developing marketing, branding, and positioning strategies
• Informing product and service development initiatives
• Tracking the performance of new products
• Identifying the extent of damage to products on the decline
• Regular reviews to determine market changes and new trends
Perceptual Map Example
Points of Parity(POP) VS Points of
Difference(POD)
What Does Points of Parity and Points of Difference Mean?
• Although they sound very similar, a business’ points of parity and points of difference are distinct, and
you’ll want to identify them both. Each one is related to brand positioning, but only one separates a
business from the competition.
• When you want to position your brand two of the first thing you need to define are points of parity and
points of difference. Let’s start by looking at the basic concepts behind these two marketing terms.
Points of parity (POP) are essentially industry standards that make a business legitimate in their field. It’s
the qualities that all businesses have in order to be competitive and on par with one another. In other
words, points of parity are industry-specific similarities that are shared among many businesses.
• Points of parity are the bare minimum for competitive businesses. If you want to be competitive, your
company needs to have all the points of parity covered.
Points of difference, also known as points of differentiation or POD, is what you need to determine once
the points of parity have been covered. These are the things that are truly unique to your business and
that give you a competitive edge. When you are creating marketing pieces, campaigns and landing pages
the points of difference are what you want to highlight in your messaging.