2. Segmentation
Process of identifying and categorizing
specific groups of potential customers
with homogeneous attributes who are
likely to exhibit similar responses to a
company’s marketing mix
8. Market Segmentation Strategies
Emerging Approaches to Segmentation
One-to-One Marketing
Mass Customization
Permission Marketing
Interruption marketing
Guerrilla Marketing
Criteria for Successful Segmentation
Identifiable and Measurable
Substantial
Accessible
Responsive
9. Bases for Segmenting
Consumer Markets
Behavioral Segmentation
Segments based on actual behavior or product
usage e.g. Heavy diesel users, light diesel users, non-users
of diesel.
Demographic Segmentation
Segments based on demographic factors (e.g.,
gender, age, income, education, etc.)
Psychographic Segmentation
Segments based on state-of-mind issues (e.g.,
motives, attitudes, opinions, values, lifestyles,
interests, personality, etc.)
Geographic Segmentation
Segments based on geographic location
11. Bases for Segmenting
Business Markets
Type of Organization
Organizational Characteristics
Benefits Sought or Buying
Processes
Personal and Psychological
Relationship Intensity
12. Targeting
The process of evaluating
segments and focusing
marketing efforts on a country,
region, or group of people that
has significant potential to
respond
13. Criteria for Targeting: 9 W’s
Who buys our product?
Who does not buy it?
What need or function does it serve?
What are customers buying to satisfy the need
for which our product is targeted?
What price are they paying?
When is the product purchased?
Where is it purchased?
Why is it purchased?
14. Target Marketing Strategies
Five basic strategies for target
market selection:
(1) Single Segment Targeting
(2) Selective Targeting
(3) Mass Market Targeting
(4) Product Specialization
(5) Market Specialization
15. Advantages of Segmentation
1. The process of breaking up a homogeneous market
into heterogeneous segments forces the marketer to
analyse and consider both the needs of the market and
the company’s ability to competently serve those needs
– thereby making the company better informed about
its customers
2. Competitor offerings and marketing positioning must
also be analysed in this context so the company must
consider what its competitive advantages and
disadvantages are, helping it to clarify its own
positioning strategy
3. Limited resources are used to best advantage, targeted
at those segments that offer the best potential
16. • Size, purchasing power, profiles
of segments can be measured.
• Segments can be effectively
reached and served.
• Segments are large or profitable
enough to serve.
Measurable
Accessible
Substantial
Differential
Actionable
• Segments must respond
differently to different marketing
mix elements & programs.
• Effective programs can be
designed to attract and serve
the segments.
Requirements for effective Segmentation
18. Positioning
Locating a brand in consumers’ minds over and
against competitors in terms of attributes and
benefits that the brand does and does not offer
Attribute or Benefit
Quality and Price
Use or User
Competition
19. Differentiation and Positioning
Relative perception
Process of creating favorable relative position:
(1) Identification of target market
(2) Determination of needs, wants, preferences and
benefits desired
(3) Examination of competitors’ characteristics and
positioning
(4) Comparison of product offerings with competitors
(5) Identification of unique position
(6) Development of a marketing program
(7) Continual reassessment
20. Differentiation and Positioning
Differentiation Strategies
Product Descriptors
Product features
Advantages
Benefits
Customer Support Services
Image
Positioning Strategies
Strengthen the Current Position
Repositioning
Reposition the Competition
