Market Segmentation
and Positioning
Market Segmentation
and Positioning
Presented By:-
Babasab Patil
2/13/2014 Babasabpati...
Babasabpatilfreepptmba.com
What is market segmentation?What is market segmentation?
 Market Segmentation
Process of divid...
According to Philip kotler :
“ Market segmentation is sub-dividing a
market into distinct and homogeneous
subgroups of cus...
Market SegmentationMarket Segmentation
MS is a method of “dividing a market
(Large) into smaller groupings of
consumers or...
CONCEPT AND DEFINITIONCONCEPT AND DEFINITION
 The concept of market segment is based on
the fact that the market of commo...
Babasabpatilfreepptmba.com
Target MarketingTarget Marketing
 Advantages
 Easier analysis of potential and actual
consume...
Babasabpatilfreepptmba.com
Target MarketingTarget Marketing
 Disadvantages
 Increased marketing costs
 Personalization ...
Babasabpatilfreepptmba.com
Target Market SelectionTarget Market Selection
Identify Total Market
Determine Need for
Segment...
Babasabpatilfreepptmba.com
External FactorsExternal Factors
 Stage in product life cycle
 Competition
 Product specific...
Babasabpatilfreepptmba.com
Levels of Market SegmentationLevels of Market Segmentation
Mass
Market
Niche Micro-
marketing T...
1. Mass Market1. Mass Market
Consists of a group of customers
who share a similar set of needs
and wants.
Identifiable Gro...
2. NICHE MARKETING2. NICHE MARKETING
 Group of customers seeking a distinctive mix of benefits who are ready to
pay extra...
ROLLS ROYCEROLLS ROYCE
2/13/2014 Babasabpatilfreepptmba.com
3. Micro Market3. Micro Market
 Marketing programs tailored to the needs & wants of
local customer groups in trading area...
4. INDIVIDUAL MARKETING4. INDIVIDUAL MARKETING
 Ultimate segmentation – segments of 1 or customized
marketing or one to o...
Babasabpatilfreepptmba.com
Basis For Segmenting Consumer MarketBasis For Segmenting Consumer Market
Psychographic
Segmenta...
Babasabpatilfreepptmba.com
Family Size GenderFamily Size Gender
Income LevelIncome Level
OccupationOccupationEducationEduc...
Babasabpatilfreepptmba.com
Segmentation VariablesSegmentation Variables
Psychographic
Segmentation
Geographic
Segmentation...
Babasabpatilfreepptmba.com
Geographic SegmentationGeographic Segmentation
 When an organization localizes its
marketing e...
Babasabpatilfreepptmba.com
Segmenting Consumer MarketsSegmenting Consumer Markets
Psychographic
Segmentation
Geographic
Se...
Babasabpatilfreepptmba.com
Psychographic SegmentationPsychographic Segmentation
 Grouping customers together based on
soc...
Babasabpatilfreepptmba.com
Segmenting Consumer MarketsSegmenting Consumer Markets
Psychographic
Segmentation
Geographic
Se...
Babasabpatilfreepptmba.com
Light Users
80%
Light Users
80%
Heavy Users
20%
Heavy Users
20%
Behavior/Usage SegmentationBeha...
Conti…Conti…
 Occasions: Special Occasions, Holiday, Seasonal
 Benefits: Quality, Service, Economy, Convenience,
Speed
...
Babasabpatilfreepptmba.com
Segmenting Business MarketsSegmenting Business Markets
 Demographic:
1. Industry: Which indust...
Conti…Conti…
 Operating Variable:
1.Technology:What customer technologies
should we focus on?
2. User or nonuser status: ...
Conti…Conti…
 Purchasing Approaches
1. Purchasing-function organization: Should we serve
companies with highly centralize...
4. General Purchase Policies: Should we serve companies that
prefer leasing? Service contract? Systems purchase? Sealed
Bi...
 Situational Factors:
1. Urgency: Should we serve companies that need
quick and sudden delivery or service?
2. Specific A...
 Personal Characteristics
1. Buyer-seller Similarity: Should we serve
companies whose people and values are similar to
ou...
Babasabpatilfreepptmba.com
Segmenting Global MarketsSegmenting Global Markets
 Economic
 Stage of development in a host ...
Requirements for Effective SegmentationRequirements for Effective Segmentation
MeasurableMeasurable
SubstantialSubstantial...
1. Measurable
 Size, purchasing power, and profile of segment
2. Accessible
 Can be reached and served
3. Substantial
 ...
Evaluating and Selecting the Market SegmentsEvaluating and Selecting the Market Segments
Through concentrated
marketing, t...
Conti…Conti…
A firm selects a number of
segments, each objectively
attractive and appropriate.
There may be little or no
s...
The firm makes a certain
product that it sells to several
different segments. Ex: A
microscope manufacturer who
sells to u...
The firm concentrates on
serving many needs of a
particular group. Ex: A
firm that sells an
assortment of products
only to...
The firm attempts to serve all
customers groups with all the
products they might need. Only very
large firms such as IBM (...
Choosing and implementing Positioning
Strategy
Choosing and implementing Positioning
Strategy
 Differentiation through:
...
Identifying Possible Value Differences and
Competitive Advantage
Competitive Advantage: An advantage over
competitors gain...
Choosing the Right Competitive AdvantagesChoosing the Right Competitive Advantages
1. How Many Differences to Promote (USP...
Conti….Conti….
 Affordable: Buyers can afford to pay for the
differences
 Profitable: The company can introduce the
diff...
Babasabpatilfreepptmba.com
Selecting an overall Positioning StrategySelecting an overall Positioning Strategy
 Value Prop...
Possible Value Propositions
2/13/2014 Babasabpatilfreepptmba.com
More for MoreMore for More
“More for More” positioning involves providing
the most upscale product or service and
charging...
More for the SameMore for the Same
Companies can attack competitor’s more-
for-more positioning by introducing a
brand off...
The Same for LessThe Same for Less
Offering the Same for less can be a powerful
value proposition.
Ex: Wal Mart, Big Bazar...
Less For MuchLess For Much
A Market almost always exists for products that
offer less and therefore cost less. Few people
...
More For LessMore For Less
Of course, the winning value proposition would be
to offer “More for less”.
(only for short ter...
2/13/2014 Babasabpatilfreepptmba.com
Babasabpatilfreepptmba.com
Positioning StrategyPositioning Strategy
 Differentiation
through:
 Product attributes -
char...
Babasabpatilfreepptmba.com
Positioning StrategyPositioning Strategy
 Differentiation
through:
 Product user - the
typica...
Babasabpatilfreepptmba.com
Positioning StrategyPositioning Strategy
 Differentiation
through:
 Product class -
positioni...
Babasabpatilfreepptmba.com
Positioning StrategyPositioning Strategy
 Differentiation
through:
 Competition -
comparisons...
Babasabpatilfreepptmba.com
Market SegmentationMarket Segmentation
Differentiated
Concentrated
Undifferentiated
2/13/201...
Babasabpatilfreepptmba.com
Differentiated MarketingDifferentiated Marketing
 Differentiated
Marketing
 An organization
t...
Babasabpatilfreepptmba.com
Concentrated MarketingConcentrated Marketing
 Concentrated
Marketing
 When an
organization
co...
Babasabpatilfreepptmba.com
Undifferentiated MarketingUndifferentiated Marketing
 Undifferentiated
Marketing
 An organiza...
Thank You
2/13/2014 Babasabpatilfreepptmba.com
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Segmentation module 4 mba 1st sem by babasab patil (karrisatte)

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Segmentation module 4 mba 1st sem by babasab patil (karrisatte) BEC DOMS BAGALKOT MBA

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  1. 1. Market Segmentation and Positioning Market Segmentation and Positioning Presented By:- Babasab Patil 2/13/2014 Babasabpatilfreepptmba.com
  2. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 13. ROLLS ROYCEROLLS ROYCE 2/13/2014 Babasabpatilfreepptmba.com
  14. 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. 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. 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. 17. Babasabpatilfreepptmba.com Family Size GenderFamily Size Gender Income LevelIncome Level OccupationOccupationEducationEducation AgeAge Demographic SegmentationDemographic Segmentation 2/13/2014 Babasabpatilfreepptmba.com
  18. 18. Babasabpatilfreepptmba.com Segmentation VariablesSegmentation Variables Psychographic Segmentation Geographic Segmentation Behavior/Usage Segmentation Demographic Segmentation 2/13/2014 Babasabpatilfreepptmba.com
  19. 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. 20. Babasabpatilfreepptmba.com Segmenting Consumer MarketsSegmenting Consumer Markets Psychographic Segmentation Geographic Segmentation Behavior/Usage Segmentation Demographic Segmentation 2/13/2014 Babasabpatilfreepptmba.com
  21. 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. 22. Babasabpatilfreepptmba.com Segmenting Consumer MarketsSegmenting Consumer Markets Psychographic Segmentation Geographic Segmentation Behavior/Usage Segmentation Demographic Segmentation 2/13/2014 Babasabpatilfreepptmba.com
  23. 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. 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. 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. 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. 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. 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. 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. 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. 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. 32. Requirements for Effective SegmentationRequirements for Effective Segmentation MeasurableMeasurable SubstantialSubstantial AccessibleAccessible DifferentiableDifferentiable ActionableActionable 2/13/2014 Babasabpatilfreepptmba.com
  33. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 44. Possible Value Propositions 2/13/2014 Babasabpatilfreepptmba.com
  45. 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. 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. 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. 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. 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. 50. 2/13/2014 Babasabpatilfreepptmba.com
  51. 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. 52. Babasabpatilfreepptmba.com Positioning StrategyPositioning Strategy  Differentiation through:  Product user - the typical user of a product 2/13/2014 Babasabpatilfreepptmba.com
  53. 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. 54. Babasabpatilfreepptmba.com Positioning StrategyPositioning Strategy  Differentiation through:  Competition - comparisons to a product’s competition (directly or indirectly) 2/13/2014 Babasabpatilfreepptmba.com
  55. 55. Babasabpatilfreepptmba.com Market SegmentationMarket Segmentation Differentiated Concentrated Undifferentiated 2/13/2014 Babasabpatilfreepptmba.com
  56. 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. 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. 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. 59. Thank You 2/13/2014 Babasabpatilfreepptmba.com
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