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  • 1. Market Segmentation and Positioning Market Segmentation and Positioning Presented By:- Babasab Patil 2/13/2014 Babasabpatilfreepptmba.com
  • 2. Babasabpatilfreepptmba.com What is market segmentation?What is market segmentation?  Market Segmentation Process of dividing a large market into smaller target markets, or customer groups with similar needs and/or desires 2/13/2014 Babasabpatilfreepptmba.com
  • 3. According to Philip kotler : “ Market segmentation is sub-dividing a market into distinct and homogeneous subgroups of customers, where any group can conceivably be selected as a target market to be met with distinct marketing mix.” 2/13/2014 Babasabpatilfreepptmba.com
  • 4. Market SegmentationMarket Segmentation MS is a method of “dividing a market (Large) into smaller groupings of consumers or organizations in which each segment has a common characteristic such as needs or behaviour.” 2/13/2014 Babasabpatilfreepptmba.com
  • 5. CONCEPT AND DEFINITIONCONCEPT AND DEFINITION  The concept of market segment is based on the fact that the market of commodities are not homogeneous but they are heterogeneous. Market represent a group of customer having common characteristics but two customer are never common in their nature, habits, hobbies income and purchasing techniques. 2/13/2014 Babasabpatilfreepptmba.com
  • 6. Babasabpatilfreepptmba.com Target MarketingTarget Marketing  Advantages  Easier analysis of potential and actual consumers  Tailoring of products to market  Assessment of demand potential  Identify competing products  Increased sales effectiveness and cost efficiencies  Product positioning and easy identification of opportunities 2/13/2014 Babasabpatilfreepptmba.com
  • 7. Babasabpatilfreepptmba.com Target MarketingTarget Marketing  Disadvantages  Increased marketing costs  Personalization can become burdensome to manage  Faux segmentation may be viewed cynically  Narrow segmentation can impact brand loyalty  Ethics and stereotyping issues 2/13/2014 Babasabpatilfreepptmba.com
  • 8. Babasabpatilfreepptmba.com Target Market SelectionTarget Market Selection Identify Total Market Determine Need for Segmentation Determine Bases for Segmentation Profile Each Selected Segment Assess Potential Profitability of Segment and Select Target Segment Select Positioning Strategy Develop and Implement Appropriate Marketing Mix Monitor, Evaluate and Control2/13/2014 Babasabpatilfreepptmba.com
  • 9. Babasabpatilfreepptmba.com External FactorsExternal Factors  Stage in product life cycle  Competition  Product specific issues  Market for the product 2/13/2014 Babasabpatilfreepptmba.com
  • 10. Babasabpatilfreepptmba.com Levels of Market SegmentationLevels of Market Segmentation Mass Market Niche Micro- marketing The Individual Personal- izationMicro- marketingNicheStandardized Marketing Mix2/13/2014 Babasabpatilfreepptmba.com
  • 11. 1. Mass Market1. Mass Market Consists of a group of customers who share a similar set of needs and wants. Identifiable Group with in a Market with Similar • Wants • Purchasing Power • Geographical Location • Buying Attitudes 2/13/2014 Babasabpatilfreepptmba.com
  • 12. 2. NICHE MARKETING2. NICHE MARKETING  Group of customers seeking a distinctive mix of benefits who are ready to pay extra premium.  Niche = segment sub – segments Eg. Washing detergents hard & gentle washes . Surf excel for tough stains ( hard on clothes) & Ezee from Godrej for delicate clothes. --- Astha , Sanskar , Q TV – focus on religion & spiritualism.  DISTINCT NEEDS  PAY PREMIUM  SPECIALIZATION  LESS COMPETITION  POTENTIAL 2/13/2014 Babasabpatilfreepptmba.com
  • 13. ROLLS ROYCEROLLS ROYCE 2/13/2014 Babasabpatilfreepptmba.com
  • 14. 3. Micro Market3. Micro Market  Marketing programs tailored to the needs & wants of local customer groups in trading areas, neighborhoods , etc.  this trend is called grass roots marketing. Ex. – Spiderman 3 was released in 5 different language in India including bhojpuri. 2/13/2014 Babasabpatilfreepptmba.com
  • 15. 4. INDIVIDUAL MARKETING4. INDIVIDUAL MARKETING  Ultimate segmentation – segments of 1 or customized marketing or one to one marketing.  Customerization – empower the consumers to design the product or service offering of their choice.  Dell- Customerization (Computers)  Ex. Paint companies have started doing this- Asian Paint , Nerolac , Berger Paints  Arvind mills launched Ruff’n Tuff Jeans, branded ready – to – stitch2/13/2014 Babasabpatilfreepptmba.com
  • 16. Babasabpatilfreepptmba.com Basis For Segmenting Consumer MarketBasis For Segmenting Consumer Market Psychographic Segmentation Geographic Segmentation Behavior/Usage Segmentation Demographic Segmentation 2/13/2014 Babasabpatilfreepptmba.com
  • 17. Babasabpatilfreepptmba.com Family Size GenderFamily Size Gender Income LevelIncome Level OccupationOccupationEducationEducation AgeAge Demographic SegmentationDemographic Segmentation 2/13/2014 Babasabpatilfreepptmba.com
  • 18. Babasabpatilfreepptmba.com Segmentation VariablesSegmentation Variables Psychographic Segmentation Geographic Segmentation Behavior/Usage Segmentation Demographic Segmentation 2/13/2014 Babasabpatilfreepptmba.com
  • 19. Babasabpatilfreepptmba.com Geographic SegmentationGeographic Segmentation  When an organization localizes its marketing efforts to accommodate the unique needs of specific geographic regions  World Region or country  Country Region  City or Metro 2/13/2014 Babasabpatilfreepptmba.com
  • 20. Babasabpatilfreepptmba.com Segmenting Consumer MarketsSegmenting Consumer Markets Psychographic Segmentation Geographic Segmentation Behavior/Usage Segmentation Demographic Segmentation 2/13/2014 Babasabpatilfreepptmba.com
  • 21. Babasabpatilfreepptmba.com Psychographic SegmentationPsychographic Segmentation  Grouping customers together based on social class, lifestyles (Achievers, Strivers, Survivors) and psychological characteristics (attitudes, interests and opinions) 2/13/2014 Babasabpatilfreepptmba.com
  • 22. Babasabpatilfreepptmba.com Segmenting Consumer MarketsSegmenting Consumer Markets Psychographic Segmentation Geographic Segmentation Behavior/Usage Segmentation Demographic Segmentation 2/13/2014 Babasabpatilfreepptmba.com
  • 23. Babasabpatilfreepptmba.com Light Users 80% Light Users 80% Heavy Users 20% Heavy Users 20% Behavior/Usage SegmentationBehavior/Usage Segmentation  Markets can be segmented by how often or how heavily consumers use a specific product  80/20 Principle - 80% of revenue generated by 20% of customers 2/13/2014 Babasabpatilfreepptmba.com
  • 24. Conti…Conti…  Occasions: Special Occasions, Holiday, Seasonal  Benefits: Quality, Service, Economy, Convenience, Speed  User Status: Nonuser, ex-user, potential user, first- time user, regular user Babasabpatilfreepptmba.com2/13/2014
  • 25. Babasabpatilfreepptmba.com Segmenting Business MarketsSegmenting Business Markets  Demographic: 1. Industry: Which industries should we serve? 2. Company size: What size companies should we serve? 3. Location: What geographical area should we serve. 2/13/2014 Babasabpatilfreepptmba.com
  • 26. Conti…Conti…  Operating Variable: 1.Technology:What customer technologies should we focus on? 2. User or nonuser status: Should we serve heavy users, medium users, light users, or non-users 3. Customer Capabilities: Should we serve customers needing many or few services 2/13/2014 Babasabpatilfreepptmba.com
  • 27. Conti…Conti…  Purchasing Approaches 1. Purchasing-function organization: Should we serve companies with highly centralized or decentralized purchasing organization? 2. Power Structure: Should we serve companies that are engineering dominated, financially dominated and so on? 3. Nature of Existing Relationship: Should we serve companies with which we have strong relationships or simply go after the most desirable companies 2/13/2014 Babasabpatilfreepptmba.com
  • 28. 4. General Purchase Policies: Should we serve companies that prefer leasing? Service contract? Systems purchase? Sealed Bidding? 5. Purchasing Criteria: Should we serve companies that are seeking quality? Service Price? 2/13/2014 Babasabpatilfreepptmba.com
  • 29.  Situational Factors: 1. Urgency: Should we serve companies that need quick and sudden delivery or service? 2. Specific Applications: Should we focus on certain applications of our products rather than all applications? 3. Size of Order: Should we focus on large or small orders?2/13/2014 Babasabpatilfreepptmba.com
  • 30.  Personal Characteristics 1. Buyer-seller Similarity: Should we serve companies whose people and values are similar to ours? 2. Attitude Towards Risk: Should we serve risk- taking or risk-avoiding customers? 3. Loyalty: Should we serve companies that show high loyalty to their suppliers? 2/13/2014 Babasabpatilfreepptmba.com
  • 31. Babasabpatilfreepptmba.com Segmenting Global MarketsSegmenting Global Markets  Economic  Stage of development in a host country  Political/Legal  Regulations and laws  Cultural  Language barriers, differences in consumer customs 2/13/2014 Babasabpatilfreepptmba.com
  • 32. Requirements for Effective SegmentationRequirements for Effective Segmentation MeasurableMeasurable SubstantialSubstantial AccessibleAccessible DifferentiableDifferentiable ActionableActionable 2/13/2014 Babasabpatilfreepptmba.com
  • 33. 1. Measurable  Size, purchasing power, and profile of segment 2. Accessible  Can be reached and served 3. Substantial  Large and profitable enough to serve 4. Differentiable  Respond differently 5. Actionable  Effective programs can be developed 2/13/2014 Babasabpatilfreepptmba.com
  • 34. Evaluating and Selecting the Market SegmentsEvaluating and Selecting the Market Segments Through concentrated marketing, the firm gains a strong knowledge of the segment’s needs and achieves a strong market presence. Firms enjoys operating economies through a strong Specializing its production, distribution and promotion 2/13/2014 Babasabpatilfreepptmba.com
  • 35. Conti…Conti… A firm selects a number of segments, each objectively attractive and appropriate. There may be little or no synergy among the segments, but each promises to be a moneymaker. This multi segment strategy has the advantage of diversifying the firm’s risk 2/13/2014 Babasabpatilfreepptmba.com
  • 36. The firm makes a certain product that it sells to several different segments. Ex: A microscope manufacturer who sells to university, government, and commercial laboratories. The firms makes different microscopes for the different customers groups & build a strong reputation in the specific product area 2/13/2014 Babasabpatilfreepptmba.com
  • 37. The firm concentrates on serving many needs of a particular group. Ex: A firm that sells an assortment of products only to university laboratories. 2/13/2014 Babasabpatilfreepptmba.com
  • 38. The firm attempts to serve all customers groups with all the products they might need. Only very large firms such as IBM (Computer Market), GM (Vehicle Market), Coco-Cola can undertake a full market coverage strategy. Can cover whole market in to two broad ways: 1. Un-differentiated Marketing (coco cola ) 2. Differentiated Marketing (HUL soaps)2/13/2014 Babasabpatilfreepptmba.com
  • 39. Choosing and implementing Positioning Strategy Choosing and implementing Positioning Strategy  Differentiation through:  Product attributes - characteristics as a positioning base  Product usage - positioning based on a products typical use Product Position: The way the products is defined by consumers on important attributes-the place the product occupies in consumer’s minds relative to competing products 2/13/2014 Babasabpatilfreepptmba.com
  • 40. Identifying Possible Value Differences and Competitive Advantage Competitive Advantage: An advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices 2/13/2014 Babasabpatilfreepptmba.com
  • 41. Choosing the Right Competitive AdvantagesChoosing the Right Competitive Advantages 1. How Many Differences to Promote (USP) 2. Which Difference to Promote  Important: The difference delivers a highly valued benefit to target buyers  Distinctive: Competitors do not offer the differences  Superior: Superior to other ways that customers might obtain the same benefit.  Communicable: The Difference is communicable and visible to buyers  Preemptive: Competitors cannot easily copy the differences2/13/2014 Babasabpatilfreepptmba.com
  • 42. Conti….Conti….  Affordable: Buyers can afford to pay for the differences  Profitable: The company can introduce the difference profitability 2/13/2014 Babasabpatilfreepptmba.com
  • 43. Babasabpatilfreepptmba.com Selecting an overall Positioning StrategySelecting an overall Positioning Strategy  Value Proposition: A Value Proposition statement must contain  Describe "What" we provide  Answer "So what?"  Quantify "How much"  Provide Proof 2/13/2014 Babasabpatilfreepptmba.com
  • 44. Possible Value Propositions 2/13/2014 Babasabpatilfreepptmba.com
  • 45. More for MoreMore for More “More for More” positioning involves providing the most upscale product or service and charging a higher price to cover the higher costs. Ex: Mercedes Automobile IIMB 2/13/2014 Babasabpatilfreepptmba.com
  • 46. More for the SameMore for the Same Companies can attack competitor’s more- for-more positioning by introducing a brand offering comparable quality but at a lower price. Ex: Toyota introduced its Lexus line with a “more-for-more” value proposition versus Mercedes and BMW 2/13/2014 Babasabpatilfreepptmba.com
  • 47. The Same for LessThe Same for Less Offering the Same for less can be a powerful value proposition. Ex: Wal Mart, Big Bazar, Croma, E-Zone 2/13/2014 Babasabpatilfreepptmba.com
  • 48. Less For MuchLess For Much A Market almost always exists for products that offer less and therefore cost less. Few people need, want, or can offered “the very best” in everything they buy. Ex: TATA NANO offers very few features and less requirements at a much lower price 2/13/2014 Babasabpatilfreepptmba.com
  • 49. More For LessMore For Less Of course, the winning value proposition would be to offer “More for less”. (only for short term) Ex: TATA Indica Offers “More Car per car” (more space and better fuel economy at a lower price) 2/13/2014 Babasabpatilfreepptmba.com
  • 50. 2/13/2014 Babasabpatilfreepptmba.com
  • 51. Babasabpatilfreepptmba.com Positioning StrategyPositioning Strategy  Differentiation through:  Product attributes - characteristics as a positioning base  Product usage - positioning based on a products typical use  Differentiation through:  Symbol - use of a symbol or icon to position a product in the consumer consciousness 2/13/2014 Babasabpatilfreepptmba.com
  • 52. Babasabpatilfreepptmba.com Positioning StrategyPositioning Strategy  Differentiation through:  Product user - the typical user of a product 2/13/2014 Babasabpatilfreepptmba.com
  • 53. Babasabpatilfreepptmba.com Positioning StrategyPositioning Strategy  Differentiation through:  Product class - positioning against another type of product or product class 2/13/2014 Babasabpatilfreepptmba.com
  • 54. Babasabpatilfreepptmba.com Positioning StrategyPositioning Strategy  Differentiation through:  Competition - comparisons to a product’s competition (directly or indirectly) 2/13/2014 Babasabpatilfreepptmba.com
  • 55. Babasabpatilfreepptmba.com Market SegmentationMarket Segmentation Differentiated Concentrated Undifferentiated 2/13/2014 Babasabpatilfreepptmba.com
  • 56. Babasabpatilfreepptmba.com Differentiated MarketingDifferentiated Marketing  Differentiated Marketing  An organization targets multiple market segments and develops segment specific mixes 2/13/2014 Babasabpatilfreepptmba.com
  • 57. Babasabpatilfreepptmba.com Concentrated MarketingConcentrated Marketing  Concentrated Marketing  When an organization concentrates its marketing efforts on a smaller segment of a larger market 2/13/2014 Babasabpatilfreepptmba.com
  • 58. Babasabpatilfreepptmba.com Undifferentiated MarketingUndifferentiated Marketing  Undifferentiated Marketing  An organization develops one strategy appropriate for all members of the total market 2/13/2014 Babasabpatilfreepptmba.com
  • 59. Thank You 2/13/2014 Babasabpatilfreepptmba.com