Module - 4

Segmentation, Targeting and

Positioning
 Contents of the Module
• Mass marketing Vs Segmentation;
• Need for Segmentation, Types of segmentation, Market segmentation process,
• Requirement of effective segmentation, Market Targeting: Target market, types
of target market.
• Differentiation & Positioning:
• Positioning, Types of positioning, Brand positioning errors, Positioning Maps.
 Mass Marketing
• Mass marketing is a marketing strategy in which a firm decides to ignore market
segment differences and appeal the whole market with one offer or one strategy,
which supports the idea of broadcasting a message that will reach the largest
number of people possible.
• Medium of Mass Marketing: Social Media, Television / Radio, Newspapers,
Magazines, Email Marketing
• Disadvantages of Mass Marketing:
• Low adaptability: The company does not adapt products according to consumer tastes and
special requirements. Thus, for quality-conscious consumers, products are not attractive.
• Low-profit margins: Companies usually rely on low prices to attract as many customers as
possible. The product is not unique, so the market perceives it to be of low value. Economies
of scale are one of the solutions to improve low margins in the market.
• High competitive pressure: The mass market is likely to attract more players. Standard
products, low switching costs, and low loyalty make rivalry between companies more intense.
 Disadvantages of Mass Marketing
• Low adaptability: The company does not adapt products according to
consumer tastes and special requirements. Thus, for quality-conscious
consumers, products are not attractive.
• Low-profit margins: Companies usually rely on low prices to attract as many
customers as possible. The product is not unique, so the market perceives it to
be of low value. Economies of scale are one of the solutions to improve low
margins in the market.
• High competitive pressure: The mass market is likely to attract more players.
Standard products, low switching costs, and low loyalty make rivalry between
companies more intense.
• High entry barriers: Existing firms invest in expensive capital equipment and
efficient supply chains to support higher economies of scale. That increases the
entry requirements to the market, leaving potential players to spend large sums
of money.
 Mass marketing Vs Segmentation
Mass Marketing Segmentation
Mass Marketing has general appeal. Segmentation has focused appeal.
Mass Marketing targets large group of people. Segmentation targets smaller group of people.
Mass Marketing is suitable for generic Niche products can be effectively marketed
products. through Segmentation.
Mass Marketing is less time consuming as it Detailed research is required to identify the
skips the aspects of segmentation. segments.
Mass Marketing does not divide the markets Segmentation begins with dividing markets
into groups. into groups.
Mass marketing Vs Segmentation
 Segmentation
• “Market segmentation is sub dividing a market into distinct and homogenous
subgroup of customers, where any group can conceivably be selected as target
market to be met with distinct marketing mix” – Philip Kotler
• The purpose of market segmentation is to separate programmes or strategies to
all segments is to determine difference among them or marketing them.
• A market segment consists of a group of customers who share a similar set of
needs and wants
• Segmenting market offers key benefits over mass marketing.
 Need for Segmentation
• Determining market opportunities
• Adjustments in marketing appeals
• Developing marketing programmes
• Designing a product ( Banking apps )
• Media selection
• Timing of marketing efforts
• Efficient use of resources
• Better service to customers
• Helps in fixing prices
 Stages of Segmentation
a. Survey Stage include search and research stage

b. Analysis Stage analysis the data collected

c. Profiling Stage drawing conclusion about the market character

 Levels of Market Segmentation
• Segmented Marketing: identify large segment who have similar wants and
purchasing power, geographical location, buying attitudes or habits Ex. An Auto
company identify four broad segments—car buyers for basic transportation or
high performance or luxury of safety.
• Niche Marketing: Niche marketing is more narrowly defined group typically
small market whose needs are not typically not served.
• Local Marketing: Marketing to local customer groups- on locality basis; like
Citi bank provides different mixes of banking service in its branches depending
on neighborhood demographics.
• Individual Marketing: Customized marketing. Trying to make the product for
every individual; Like from centuries consumers are served as individuals—the
tailor made the suit and the cobbler designed shoes for the individual.
 Consumer market
• Consumer market refers to the market where people purchase products/services
for consumption and are not meant for further sale.
• This market is dominated by the products which consumers use in their daily
life.
• Each time a consumer purchases a commodity for his own usage he/she is
participating in a consumer market.
 Bases for Segmenting Consumer Markets
• 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.
• The major segmentation variables:
• Geographic and Demographic,
• Psychographic, And
• Behavioural Segmentation
 Bases for Segmenting Consumer Markets – Geographic Segmentation
• Geographic: It divides the market into geographical units such as nations, states,
regions, counties, cities, or neighbourhoods.
• The company can operate in one or a few areas, or it can operate in all but pay
attention to local variations. In that way it can tailor marketing programs to the
needs and wants of local customer groups in trading areas, neighbourhoods,
even individual stores.
• Geographic region, city or metro size, climate etc.,
Bases for Segmenting Consumer Markets – Demographic Segmentation
• Some approaches combine geographic data with demographic data to yield even
richer descriptions of consumers.
• Such as Age, life cycle stage, Marital status, Family size, Gender, Income,
Occupation. Education, Religion
• Some are targeting Old People (Retirement plan), Women
( scotty ,scooter), TVS scotty etc. (for Lower and Middle class), Ariel/surf (for
upper class)
 Bases for Segmenting Consumer Markets contd….
• Psychographic Segmentation: Psychographics is the science of using
psychology and demographics to better understand consumers. In
psychographic segmentation, buyers are divided into different groups on the
psychological/personality traits, lifestyle, or values.
• Examples: Fitness enthusiasts, environmentalists, tech-savvy customers, luxury
enthusiasts etc.,
 Behavioral Segmentation
• Behavioral Segmentation: In this segmentation, marketers divide buyers into groups on
the basis of their knowledge of, attitude toward, use of, or response to a product.
• NEEDS AND BENEFITS: Not everyone who buys a product has the same needs or
wants the same benefits from it.
• Enthusiast:
• Image Seekers:
• Savvy Shoppers:
• Traditionalist:
• Satisfied Sippers:
• Overwhelmed:
• Loyalty Status Marketers usually envision four groups based on brand loyalty status:
• Hard-core loyals—Consumers who buy only one brand all the time
• Split loyals—Consumers who are loyal to two or three brands
• Shifting loyals—Consumers who shift loyalty from one brand to another
• Switchers—Consumers who show no loyalty to any brand
 Business Market
• The business market is the process of selling your product and services to other
businesses, where those products and services will either be used as a raw
material for the manufacturing of other products. Or those businesses buy the
products or services and resell them.
Consumer Vs industrial Market
Consumer Vs industrial Market contd….
 MARKET SEGMENTATION PROCESS
• Determine the need
• Identifying the segment
• Segment is most attractive
• Profit generation from segment
• Positioning from segment
• Expanding the segment
• Incorporating the segment in marketing strategy
 TARGET MARKET
• A target market is a group of people with some shared characteristics that a
company has identified as potential customers for its products. Identifying the
target market informs the decision-making process as a company designs,
packages, and markets its product.
• Once the firms has identified its market segment opportunities, it has to decide
how many and which one to target.
• A firm must evaluate the various segments and decide how many and which one to
target : a single segment, several segment, a specific product, a specific market, or
the full market.
• TYPES OF TARGET MARKET:
• Undifferentiated marketing
• Differentiated marketing or multi-segment targeting (Automobile industry)
• Focus or concentrated targeting (Starbucks)
• Customized marketing (Architecture firms)
 Patterns of target market selection
• Single-Segment Concentration: Many companies concentrate on a single
segment: Volkswagen, for example, concentrates on the small-car market, while
Porsche concentrates on the sports car market.
• Rolex watches. The advantages of single-segment concentration are lower costs of
production, distribution and promotion. The approach also leads to specialization. There
are greater chances of achieving a strong market presence and becoming a market leader
in that segment.
 Patterns of target market selection contd…
• Selective Specialization:- Here the firm selects a number of segments, each
objectively attractive and appropriate. There may be little or no synergy among
the segments, but each segment promises to be a moneymaker. This multi
segment coverage strategy has the advantage of diversifying the firm’s risk.
• Example:- J&J offering baby range for babies, clean and care for young adults, surgical
items for hospitals, Another Example:- Maruti, soap and detergent From P&G, Tata
Group hotels.
 Patterns of target market selection contd…
• Product Specialization:- Another approach is to specialize in making a certain
product for several segments.
• An example would be a microscope manufacturer that sells microscopes to university
laboratories, government laboratories, and commercial laboratories.
• The firm makes different microscopes for different customer groups but does not
manufacture other instruments that laboratories might use. Through a product
specialization strategy, the firm builds a strong reputation in the specific product area.
The downside risk is that the product may be supplanted by an entirely new technology.
 Patterns of target market selection contd…
• Market Specialization:- With market specialization, the firm concentrates on
serving many needs of a particular customer group.
• An example would be a firm that sells an assortment of products only to
university laboratories, including microscopes, oscilloscopes, and chemical
flasks. The firm gains a strong reputation in serving this customer group and
becomes a channel for further products that the customer group could use.
 Patterns of target market selection contd…
• Full Market Coverage:- Here a firm attempts to serve all customer groups with
all of the products they might need. Only very large firms can undertake a full
market coverage strategy.
• Examples include IBM (computer market), General Motors (vehicle market),
and Coca-Cola (drink market). Large firms can cover a whole market in two
broad ways: through undifferentiated marketing or differentiated marketing.
Patterns of target market selection
• Ferrari: Only • Apple: iPods for
luxury sports portable media
cars players market;
• Tesla: Only iPhones into mobile
electric vehicles market, iPad into
tablets market
• Unilever: FMCG
products; Pureit in • Automobile
Water purifier companies are
• Microscope manufacturer sells market into SUVs,
microscopes to university Sedans,
laboratories, government Hatchbacks,
laboratories & commercial Compact SUVs,
laboratories. Trucks etc.,
• Bicycles to urban commuters,
fitness enthusiasts, resorts,
delivery & logistics, campus &
institutional use etc., • Google, Amazon
 Differentiation & Positioning
• Differentiation is a marketing tool used to distinguish a product from others in
the same category. It contrasts with other marketing tools such as positioning
and branding.
• To better understand differentiation in marketing, we need to first look at the
concept of positioning. Positioning is a tool to differentiate a company's
products or services from its competitors. It focuses on how you position your
product or service within the marketplace to meet the needs of your target
market. It answers the question, “Where do you place your product?”.
 Differentiation
• Marketing differentiation is crafting unique products and services to attract and
retain customers.
• Companies that use marketing differentiation can differentiate between their
offerings and competitors in several ways, including price, quality, service,
innovation, and accessibility.
• A company can differentiate its market offering along five dimensions
• Product Differentiation by form, feature, performance, durability,
reliability, style, design
• Service Differentiation by ordering ease, delivery, installation, customer
training, customer consulting, maintenance and repair etc.
• Personnel Differentiation by Competence, courtesy, credibility, reliability,
responsiveness, communication
• Channel Differentiation by Coverage, channel of distribution, expertise
performance
• Image Differentiation by symbols, Media (PR) , Atmosphere, events
Major differentiating variables
 POSITIONING
• According to Philip Kotler:- “Positioning is the act of designing the company’s
offering and image to occupy a distinctive place in the target market’s mind.”
• Objective of Positioning:
• To create distinctive place of product or service in the mind of potential customers.
• To provide competitive edge to Product or service i.e. to convey the attractiveness.
• Place an intangible service within a more tangible frame of reference.
• Help influence both service development & redesigning of existing service.
• To give target market a reason of buying and to provide guidelines for the development of
marketing mix with each element being consistent with the positioning.
 Core elements of strategic brand positioning
• Target market - define a solid target audience by creating a buyer persona
known as your ideal customer.
• Product Positioning - should lead with the benefits of the product rather than
the features of it
• Market category - you need to define who the buyers are in the space, where
they are searching for services and goods, and who currently has their attention.
• Customer pains - Your product or service should aim to address customer pains
and provide a solution
• Brand promise - is ultimately what the target audience or buyer persona stands
to gain from using your product or service
• Brand identity and values - is the personality of your business and includes
logos and voice
• Mission - is the “why you do it” aspect of your brand
 Examples
• Apple is an example of a strong brand with a strong brand positioning. It focuses on tech-
savvy customers. Apple stands out by giving unique experiences with its one-of-a-kind
products. Apple makes you focus on the future of technology and the ways its product could
change the lives of the people using it.
• Key takeaway to consider: Apple now acts as a bridge between customers and the latest tech and
gadgets.
• Amazon:- For people who want to purchase a wide range of products online with quick
delivery, Amazon provides a one-stop online shopping site. Amazon delivers products to
customers quickly using its dedicated fleet of excellent drivers.
• Key takeaway to consider: Amazon’s aim is to be different from its online competitors through its
efficiency and customer convenience.
• Coca-Cola:- Coca-Cola’s products inspire happiness and make a positive difference in
customers’ lives. Coca-Cola is a classic brand that has remained the same but with the
flexibility for a fresh, modern take. Coca-Cola stands out by being a youthful, forward-
thinking company that has been around for many years.
• Key takeaway to consider: The company’s marketing and advertising campaigns always stay true to the
brand’s identity: refreshing and fun
 Examples
• Nike:- Nike is targeted for all types of athletes who want clothing that offers
performance and comfort while also standing for something more. Nike initially
started their product with a focus on performance and innovation. Nike ensures
its customers know they are getting an edge in competition with their apparel
and makes customers feel like they are part of something bigger journey.
• Key takeaway to consider: Nike gives their customers an extra intangible when it sells
its athletic gear. Their branding and messaging focuses on empowerment, from their
tagline “Just Do It”
• Facebook: Facebook is a platform for social-seeking people who want to stay
connected to their old friends and meet new ones as well. It offers a way to
digitally enhance people’s social life and keep their customers happy by helping
them be part of the things they can enjoy.
• Key takeaway to consider: Facebook is building up to be the platform in which people
communicate in the future like how mobiles are now.
 Key Takeaways
• A good brand positioning statement is about identifying the experience you
want your customers to have and guiding the internal teams who make it
happen.
• Ensure that you have first defined your :
• Target market
• Product Positioning
• Market and Customer category
• Customer Persona
• Brand promise
• Brand identity and values
• Brand Mission
 Types of brand positioning
• Value positioning (Dmart, Zudio, Meesho)
• Positioning by competitor (Soft drinks, washing powders)
• Positioning by product class ( Mercedes )
• Positioning by product attributes and benefits (Maruti Suzuki)
• Positioning by use or application ( Clinic all clear )
• Benefit-driven positioning ( Credit card )
 Positioning strategies
• Attribute positioning :- A company position itself on the basis of attribute which their
separate identity, like no. years of existence of excellence. Example Raymond's since 1925.
• Benefit positioning :- company position itself as leader in certain benefits which they
provide to their customers. Ex. Maruti – no. of Service stations.
• Application /use positioning:- Positioning can be done on the basis of use or application of
product. Corporate position their product at the best for some use like coffee café day
position itself for discussion and meeting point. Example:- café coffee day:- a lot
happens over a cup of coffee.
• User positioning:- When firm position itself and its product as best suited for a particular
user class called user positioning. Example:- Johnson & Johnson babies products
• Value Positioning:- This strategy focus on company’s positioning as offering the best
product at lower price or we can say best valued product. Example:- “McDonald burger
@ of 25/- only/”
• Competitor positioning:- In this type of positioning firm claim to be better in some product
or services than well known competitor. Example:- “Thumps up against Pepsi”
 Brand Positioning errors
• Under positioning (Less emphasis on the features): Nano
• Over Positioning (Over emphasis on the features): Diamonds, Aqua guard
• Confused Positioning (focus on new target market with different products): Colgate,
Toothpaste for women
• Doubtful positioning (Unrealistic claims through product): Fair & lovely, hair
oil etc.,
 Under positioning
• Consumers have the vague idea about the brand.
• Under positioning is where consumers in the market do not have a clear understanding of the key benefits of
your brand.
• The state of buyers where they do not have much information about the brand and its attributes and use and
consider the brand to be just another in the pool of brand is called under positioning.
• Being under positioned – that is lacking a clear position in the consumer’s mind – will result in reduced sales
and profitability.
• Example:- Solar Lamp
• Asus Laptop
• enough to the cheapest on the shelves.
• Location:- A Luxury hotel in an inconvenient location in a town filled with luxury hotels in convenient
locations.
• Identity:- A fashion brand that lacks in distinctive style or quality level that appeals to a target market.
• Features:- Features that have unclear benefits to customer such as an air conditioner with a “ mountain air”
setting.
• Communication:- A brand fulfills a valuable customer needs and is unique. This is poorly communicated
such that the customer have no idea what products do or why they are good.
 Over Positioning
• Consumers have too narrow view of the brand.
• The state where the buyers or perspective buyers attaches a very narrow image
for the brand.
• They have perception about a particular brand due to lack of information of pre
decided notion.
• For example, buyers think that Apple only comes out with expensive products
where Apple has a range of products at different prices.
• Aqua guard introduced, aqua sure, people star believing that is due to over
positioning that made for upper class, where as product was priced at around
2000=00.
• Example:- Diamond ring
 Confused Positioning
• Consumers do not believe the brand’s claim.
• It is often observed that a brand will created too many associations with the
product or will reposition the brand very frequently. This results in confusing
the potential buyers about the goods and hampers the positioning schemes.
• Example :- NEXT Computers.
 Doubtful Positioning
• Consumers confused about the brand due to frequent changes or too many
claims.
• There are situations where the buyer finds it extremely difficult to believe the
claims made by the brand given the price, product features or the manufacturer.
• This means the positioning strategy has not been to effectively in convincing the
potential buyers about the good.
• Example:- Fair and Handsome
• Another example :- hair gain loss oil.
• And weight loss medicines
Thank You