This document discusses market segmentation, targeting, and positioning. It describes how markets can be segmented based on geographic, demographic, psychographic, and behavioral factors. After identifying market segments, companies evaluate segment attractiveness and select target segments. They then develop positioning strategies for each target segment by choosing competitive advantages to promote and an overall positioning strategy. The goal is to strategically segment markets, target the most attractive segments, and position products to occupy a clear place in consumers' minds relative to competitors.

1. Market Segmentation,
Targeting and Positioning
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2. STEPS IN MARKET SEGMENTATION, TARGETING
AND POSITIONING
Market
Segmentation
• Identify bases
for segmenting
the market
• Develop
segment profiles
Target Marketing
•Develop
measure of
segment
attractiveness
•Select target
segments
Market
Positioning
• Develop
positioning for
target segments
• Develop a
marketing mix for
each segment
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3. MARKET SEGMENTATION
Dividing a market into smaller groups of buyers on the
basis of needs, characteristics or behavior who might
require separate products or marketing mixes.
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4. SEGMENTING CONSUMER MARKETS
Major segmentation
variables
Geographic
segmentation
Demographic
segmentation
Psychographic
segmentation
Behavioral
segmentation
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5. Geographic segmentation
Dividing a market into different geographical units.
– Country
– City
– Density (Urban, suburban, rural)
– Climate (Northern, Southern)
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6. Demographic segmentation
Dividing the market into groups based on demographic
variables.
 Age
 Gender
 Family life cycle
 Income
 Occupation
 Religion
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7. Psychographic segmentation
Dividing the market into groups based on social class,
lifestyle and personality.
• Social class
• Lifestyle
• Personality
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8. Behavioral segmentation
Dividing the market into groups based on consumer
knowledge, attitude, use or response to a product.
• Occasions
• Benefits
• User status
• Usage rate
• Loyalty status
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9. SEGMENTING BUSINESS MARKETS
Demographics
Major segmentation variables
• Industry
• Company size
• Locations
Operating
variables
• Technology
• User-nonuser status
• Customer capabilities
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10. Purchasing
approaches
• Purchasing function organization
• Power structure
• Nature of existing relationships
• General purchase policies
• Purchasing criteria
Situational
factors
• Urgency
• Specific applications
• Size of order
Personal
characteristics
• Buyer-seller similarity
• Attitudes toward risks
• Loyalty
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11. SEGMENTING INTERNATIONAL MARKET
Major segmentation
variables
Geographic
location
Economic
factors
Political and
legal factors
Cultural
factors
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12. TARGET MARKETING
The process of evaluating each market segment’s
attractiveness and selecting one or more segments to
enter.
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13. EVALUATING MARKET SEGMENTS
• Segment size and growth
• Major structural factors affecting segment attractiveness
 Competitors
 Substitute products
 Power of buyers
 Powerful sellers
• Company objectives and resources
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14. SELECTING MARKET SEGMENTS
Undifferentiated
(Mass)
marketing
Differentiated
(Segmented)
marketing
Concentrated
(Niche)
marketing
Micro-
Marketing
Targeting
broadly
Targeting
narrowly
Target marketing strategies / Market coverage
strategies / Levels of market segments :
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15. • Undifferentiated (mass) marketing
A market coverage strategy in which a firm decides to
ignore market segment differences and go after the
whole market with one offer.
Company
Marketing
Mix
Market
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16. • Differentiated (segmented) marketing
A market coverage strategy in which a firm decides to
target several market segments and design separate
offers for each.
Company
Marketing Mix 1
Segment 1
Company
Marketing Mix 2
Company
Marketing Mix 3
Segment 2
Segment 3
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17. Benefits of segment marketing over mass marketing –
– The company can market more efficiently toward the
consumers that it can serve best and most profitably.
– The company can market effectively by fine-tuning its
marketing mixes to the needs of carefully defined
segments.
– The company may face fewer competitors.
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18. • Concentrated (niche) marketing
A market coverage strategy in which a firm goes after a
large share of one or a few submarkets with distinctive
traits that may seek a special combination of benefits.
Segment 1
Segment 2
Segment 3
Company
Marketing
Mix
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19. • Benefits of niche marketing over mass/segment
marketing:
– Niches are Smaller and normally attract only one or a
few competitors.
– Marketers understand their consumers’ needs so well
that their customers willingly pay a price premium.
– It offers smaller companies an opportunity to compete
by focusing their limited resources on serving niches
that may be unimportant to or overlooked by larger
competitors.
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20. • Micromarketing
A market coverage strategy in which a firm tailors its
products and marketing programs to suit the tastes of
specific individuals and locations.
Micromarketing includes –
– Local marketing - Cities, neighborhoods and specific
stores
– Individual marketing – Mass customization
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21. Choosing a market-coverage strategy
»Company resources
»Product variability
»Product’s life-cycle stage
»Market variability
»Competitor’s marketing strategies
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22. POSITIONING FOR COMPETITIVE
ADVANTAGE
Market positioning is the process of arranging for a product
to occupy a clear, distinctive and desirable place relative to
competing products in the minds of target consumers.
A product’s position is the way the product is defined by
consumers on important attributes – the place the product
occupies in consumers’ minds relative to competing
products.
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23. CHOOSING A POSITIONING STRATEGY
(3 steps)
1. Identifying possible competitive advantages :
Competitive advantage is an advantage over
competitors gained by offering consumers greater
value, either through lower prices or by providing more
benefits that justify higher prices.
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24. The most common basis for constructing a product
positioning strategy are –
– Positioning on specific product features
– Positioning on specific benefits, needs or solution
– Positioning on specific use categories
– Positioning on specific usage occasions
– Positioning on a reason to choose an offering over
the competition
– Positioning against another product
– Positioning by cultural symbols
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25. 2. Choosing the right competitive advantages :
• How many differences to promote?
• Which differences to promote?
The differences must have the following criteria -
» Important
» Distinctive
» Superior
» Communicable
» Preemptive
» Affordable
» Profitable
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26. 3. Selecting an overall positioning strategy :
More for
more
More for
the same
More for
less
The same
for less
Less for
much less
More The same Less
More
The same
Less
Benefits
Price
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