Segmentation, Targeting,

Positioning & Differentiation –

Cornerstones of Marketing
Management
Submitted by : Ankush Puri
Amit Kumar
 Steps in Market Segmentation,
Targeting, and Positioning
Market Market Market
Segmentation Targeting Positioning
1. Identify 3. Evaluate 5. Identify
segmentation attractiveness possible
positioning
variables and of each concepts for
segment the segment each target
market segment
4. Select the
2. Develop target 6. Select,
profiles of segment(s) develop, and
communicate
resulting the chosen
segments positioning
concept
 Step 1. Market Segmentation
Levels of Market Segmentation
Mass
Mass Marketing
Marketing
Same
Same product
product to
to all
all consumers
consumers
(no
(no segmentation)
segmentation)
Segment
Segment Marketing
Marketing
Different
Different products
products to to one
one or or more
more segments
segments
(some
(some segmentation)
segmentation)
Niche
Niche Marketing
Marketing
Different
Different products
products to to subgroups
subgroups within
within segments
segments
(more
(more segmentation)
segmentation)
Micromarketing
Micromarketing
Products
Products toto suit
suit the
the tastes
tastes of
of individuals
individuals and
and locations
locations
(complete
(complete segmentation)
segmentation)
Local Marketing Individual Marketing
Tailoring brands/ promotions Tailoring products/ programs
to local customer groups to individual customers
Steps in the Market Segmentation
Process
• Determine Market Boundaries
• Decide Which Segmentation Variables to
Use
• Collect and Analyze Segmentation Data
• Develop a Profile of Each Segment
• Target Segments to be Served
• Design a Marketing Plan
 Bases for Segmenting
Consumer Markets
Geographic
Region, City or Metro
Size, Density, Climate Demographic
Age, Gender, Family size
and Fife cycle, Race,
Occupation, or Income ...

Psychographic
Lifestyle or Personality

Behavioral
Occasions, Benefits,
Uses, or Attitudes
 Step 1. Market Segmentation
Bases for Segmenting Business Markets

Personal
Demographics
Characteristics

Bases
Bases
for
for Segmenting
Segmenting
Situational Business
Business Operating
Factors Markets
Markets Characteristics

Purchasing
Approaches
 Effective Segmentation
• Size, purchasing power,
Measurable
Measurable profiles of segments can
be measured.

• Segments must be large or

Substantial
Substantial profitable enough to serve.

• Segments can be
Accessible
Accessible effectively reached and
served.

• Segments must respond

differently to
Differential
Differential different marketing mix
elements & actions.

• Must be able to attract and

Actionable
Actionable serve
the segments.
 Descriptive Bases
• Age
• Gender
• Income
• Occupation
• Education
• Family Size or Family Life Cycle
• Religion or Nationality
 Geographic Bases
• Region
• Density
• Climate
• Population
 Behavioral Bases
• User Status & Brand Loyalty
• Personality/Lifestyle
• Social Class
• Occasion
• Readiness to Buy
• Benefits Sought
• Usage Rate
Single Versus Multiple Variable
Segmentation
 Step 2. Market Targeting
Evaluating Market Segments
Segment Size and Growth
Analyze sales, growth rates and expected
profitability
Segment Structural
for various Attractiveness
segments.
Consider effects of: Competitors, Availability of
Substitute Products and, the Power of Buyers &
Suppliers.
Company Objectives and Resources
Company skills & resources relative to the segment(s).
Look for Competitive Advantages.
 Five Patterns of Target Market
Selection
Single-segment Selective Product
concentration specialization specialization
M1 M2 M3 M1 M2 M3 M1 M2 M3
P1 P1 P1
P2 P2 P2
P3 P3 P3
Market Full market
specialization coverage
M1 M2 M3 M1 M2 M3
P1 P1
P = Product
M = Market P2 P2
P3 P3
 Step 2. Market Targeting
Market Coverage Strategies
Company
Company
Marketing
Marketing Market
Market
Mix
Mix
A. Undifferentiated Marketing
Company
Company
Marketing Segment
Segment11
MarketingMix
Mix11
Company
Company Segment
Segment22
Marketing
MarketingMix
Mix22
Company
Company Segment
Segment33
Marketing
MarketingMix
Mix33
B. Differentiated Marketing

Segment
Segment11
Company
Company
Marketing Segment
Marketing Segment22
Mix
Mix
Segment
Segment33
C. Concentrated Marketing
 Step 2. Market Targeting
Choosing a Market-Coverage
Company Strategy
Resources

Product
Variability

Product’s Life-Cycle
Stage

Market
Variability

Competitors’
Marketing Strategies
Positioning is the act
of designing the
company’s offering
and image to occupy a
distinctive place in
the the target
market’s mind. P 298
 Product Differentiation

Conform-
Fea- Perfor-
Form Quality ance
tures mance
Quality

Dura- Relia- Repair-

Style Design
bility bility ability
 Services Differentiation

Ordering
Ordering Customer
Customer
Installation
Installation

Miscellaneous
Ease
Ease Consulting
Consulting

Services
Customer Maintenance
Customer Maintenance
Delivery
Delivery Training
Training &&Repair
Repair
Image Differentiation

Media Atmosphere

Symbols

Events
 Important
Important

Profitable
Profitable Distinctive
Distinctive
Differences Worth
Establishing
Affordable
Affordable Superior
Superior

Preemptive
Preemptive
• Important:-the difference delivers a highly
valued benefit to a sufficient number of
buyer.
• Distinctive:-the difference is delivered in a
distinctive way.
• Superior:-the difference is superior to other
ways of obtaining the benefit
• Preemptive:-the difference cannot be easily
copied by competitors.
• Affordable:-the buyer can afford to pay for
the difference.
• Profitable:- the company will find it
profitable to introduce the difference.
 Positioning Strategies
• Product Attributes
• Benefits, Problem Solutions & Basic Needs
• Price & Quality
• Specific Use
• Against Other Products
• Product User
• Against a Competitor
PRODUCT DIFFERENTIATION
(1)FORM:-the Size,Shape ,Physical structure
for eg.(Aspirin-dosage,size,shape,colour,
coating or action time.)
(2) FEATURES :-Supplements its basic function
calculate customer value VS. CO. cost for each
potential features.
for eg. ;-Auto Cos.-several trim levels which
lowers manufacturing cost and Inventory costs.
• (3) PERFORMANCE QUALITY :-Level at
which primary characteristics operate.eg;-
Shlitz driven in it dust when it lowered “Q”.
“Q’ becoming increasingly parameter for
differentiation. Catalogues J crow raising
prices of merchandise as its raise “Q”
highly.
• (4) Conformance quality:- Every Porsche
944 designed to accelerate to 60 mph within
10 second. (C.Q.)
• (5) Durability :-long lasting-people think
more for vehicles & kitchen appliances.
(p/c’s video cameras must not be exposed to
rapid obsolescence )
• Reliability:- means that a product will not
malfunction. e.g.. -Maytag. (major home
appliances.)
• Style:-100 k & feel e.g.:- car buyers pay
high appl. Comp/Mont blanc/H.D.
• To be branded, products must be
differentiated .Perdue chicken , Bayer
aspirin , tata steel , P&G tide , cheer ,gain
candy detergents, Otis making elevators
smart.
 Personnel diff.
• Company can gain a strong competitive
advantage through having better trained
people.eg;-Singapore airlines.
 Channel diff.
• Company can achieve competitive
advantage through the way they design their
distribution channel coverage , expertise
,and performance.eg. (caterpillar)
 Image diff.
• Buyers respond differently to company and
brand image.eg.Marlboro-(machocowboy)
 DIFFERENTIATION
• Process of adding a set of meaningful and
valued differences to distinguish companies
offerings from competitors offering. For
eg.South west airlines .
 Differentiations Variables
Product Services Personnel Channel
Form Ordering ease Competence Coverage
Features Delivery courtesy Expertise
Performance Installation Credibility Performance

Conformance Customer Reliability

Durability Training Responsiveness

Reliability C. Consulting Communication

Reparability Maintenance Repair

Style Miscellaneous
Design
 Differentiation Strategies
Parameter Example
Product Features Cielo car, IFB washing machine, Sony Trinitron
TV

Performance Quality Dove beauty soap,100 pipers whisky.

Exclusivity Style Tanisque watches,Madura coats, Van

Heusen,Louies Philippe.
Product Design VIP Elanza suitcases, Bentley ties.

Product range & variety Revlon cosmetics, Ray ban sunglasses.

Service Quality Citibank, Otis elevators, eureka Forbes vacuum

cleaners
Packaging Sand piper beer
 Positioning Strategy
Bases Used Example
Brand Name Antiquity Whisky, Monte
Carlo Sweaters. orchids
Cosmetics
Consumer aspiration Esteem,Cielo Cars,
Raymond's Suitings
Brand Personality Escorts Yamaha
Bikes,Raymondes Suitings

Selective Consumer Reach Mercedes