1.
The STP Process
 Segmentation is the process of classifying customers
into groups which share some common characteristic
 Targeting involves the process of evaluating each
segments attractiveness and selecting one or more
segments to enter
 Positioning is arranging for a product to occupy a
clear, distinctive and desirable place relative to
competing products in the mind of the consumer

2.
Market Segmentation
The process of dividing a
potential market into
distinct subsets of
consumers and selecting one
or more segments as a target
market to be reached with a
distinct marketing mix.

3.
Why Segment?
Market
segmentation
More precise
definition of
customers needs
and wants
More accurate
marketing
objectives
Improved
resource
allocation
Better marketing
results

4.
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

5.
Steps in Segmentation, Targeting, and Positioning
1. Identify Bases
for Segmenting the Market
2. Develop Profiles
of Resulting Segments
3. Develop Selection Criteria
4. Select Target
Segment(s)
5. Develop Positioning
for Each Target Segment
6. Develop Marketing
Mix for Each Target Segment Market
Positioning
Market
Targeting
Market Segmentation

6.
• 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

7.
Levels of Market Segmentation
Mass Marketing
Same product to all consumers
(no segmentation)
Segment Marketing
Different products to one or more segments
(some segmentation)
Micromarketing
Products to suit the tastes of individuals and locations
(complete segmentation)
Niche Marketing
Different products to subgroups within segments
(more segmentation)
Local Marketing
Tailoring brands/ promotions
to local customer groups
Individual Marketing
Tailoring products/ programs
to individual customers

8.
Bases for Segmenting Consumer Markets
Geographic
Demographic
Age, gender, family size
and or income
Psychographic
Social class, lifestyle,
or personality
Behavioural
Occasions, benefits
sought, user
status, usage
rate, loyalty
Nations, states,
regions or cities

9.
Summary of Basic Methods

10.
Market Segmentation
Occupation
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Geographic Segmentation
Climate
Density of area
City Size
Region Southwest, Mountain States
Major metropolitan areas, small cities, towns
Urban, suburban, rural
Temperate, hot, humid, rainy
Demographic Segmentation
Income
Marital status
Sex
Age Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+
Male, female
Single, married, divorced, living together, widowed
Under 25,000, 25,000-34,999, 35,000-49,999, 50,000-
74,999, 75,000-99,999, 100,000 and over
Education Some high school, high school graduate, some college,
college graduate, postgraduate
Professional, blue-collar, agricultural, military

11.
continued
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Psychological Segmentation
Learning-involvement
Perception
Personality
Needs-motivation Shelter, safety, security, affection
Extroverts, aggressives,
Low-risk, moderate-risk, high-risk
Low-involvement, high-involvement
Psychographic
Subcultures (Race/ethnic)
Religion
Cultures
(Lifestyle) Segmentation Economy-minded, outdoors enthusiasts, status seekers
American, Italian, Chinese, Mexican, French, Pakistani
Catholic, Protestant, Jewish, Moslem, other
African-American, Asian
Family life cycle
Social class Lower, middle, upper
Bachelors, young married, full nesters, empty nesters
Attitudes Positive attitude, negative attitude
Sociocultural Segmentation

12.
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Use-Related Segmentation
Brand loyalty
Awareness status
Usage rate Heavy users, medium users, light users, non users
Unaware, aware, interested, enthusiastic
None, some, strong
Use-Situation Segmentation
Location
Objective
Time Leisure, work, rush, morning, night
Personal, gift, fun, achievement
Home, work, friend’s home, in-store
Person Self, family members, friends, boss, peers
Benefit Segmentation Convenience, social acceptance, long lasting, economy,
value-for-the-money

13.
Indian car market Segmentation

14.
THE TOOTHPASTE MARKET
The package of benefits sought
 WHITENESS
 FRESHNESS
 GOOD TASTING
 PRODUCT APPEARANCE
 DECAY PREVENTION
 GUMS PROTECTION
 TEETH SENSITIVITY
 ECONOMY