Segmentation, Targeting &
Positioning
http://www.manishparihar.co.in/
Overview: Segmentation, Targeting & Positioning
Why do this?
Market Segmentation - Principles
Segmentation Variables
Geographic
Demographic
Psychographic
Behavioral
Other (anything!)
No single best way to segment a market.
Often best to combine variables and identify smaller, better-
defined target groups.
Geographic Segmentation
Divide markets into different geographic units.
Examples:
World Region or Country: North America, Western
Europe, European Union, Pacific Rim, Mexico, etc.
Country Region: Pacific, Mountain, East Coast, etc.
City or Metro Size: New York, San Francisco
Population Density: rural, suburban, urban
Climate: northern, southern, tropical, semi-tropical
Demographic Segmentation
Use Differences in:
age, gender, family size, family life cycle, income,
occupation, education, race, and religion
Most frequently used segmentation variable
Ease of measurement and high availability.
Psychographic Segmentation
Psychographic segmentation
divides a market into
different groups based on
social class, lifestyle, or
personality characteristics.
People in the same demographic classification
often have very different lifestyles and personalities.
Behavioral Segmentation
Occasion Loyalty Status
Special promotions & Nonusers, ex-users,
labels for holidays. potential users, first-
Special products for time users, regular
special occasions. users.
Benefits Sought
Different segments Usage Rate
desire different benefits Light, medium, heavy.
from the same products.
Loyalty Status Segmentation
Hard-core
Split loyals
Shifting loyals
Switchers
User & Loyalty Status Segmentation
Requirements for Effective Segmentation
Segments must be
Measurable
Accessible
Substantial
Differentiable
Lefties are hard to
identify and measure, so
few firms target this
Actionable
segment.
Evaluating Market Segments
Segment Size and Growth Potential
Sales, profitability and growth rates
Segment Structural Attractiveness
Competition, substitute products,
buyers & supplier power, new
entrants (Porters Five Forces)
Company Objectives and
Resources
Core competencies
What business do we want to be
in?
Targeting Segments - Overview
Market Preference Patterns
Undifferentiated (Mass) Marketing
Ignores segmentation opportunities
Differentiated (Segmented) Marketing
Targets several segments
and designs separate offers
for each.
Coca-Cola (Coke, Sprite, Diet Coke,
etc.)
Procter & Gamble (Tide, Cheer,
Gain, Dreft, etc.)
Toyota (Camry, Corolla, Prius, Scion,
etc.)
Niche Marketing
Targets one or a couple small segments
Niches have very specialized interests
Flexible Marketing Offerings
Naked/Core solution Discretionary options
Product and service Some segment
elements that all members value
segment members Options may carry
value additional charges
Socially Responsible Targeting
Controversies and concerns
Targeting the vulnerable and
disadvantaged
Cereal, Cigarettes, Alcohol, Fast-food
The Catch-22 of Targeting
Psychological Reactance
Failure to target seen as prejudice
Positioning
The place a product occupies in consumers
minds relative to competing products.
Positioning Example
eBays positioning: No
matter what it is, you
can find it on eBay!
Positioning Example
To (target segment and need) our (brand) is a
(concept) that (point-of-difference).
To busy mobile professionals who need to
always be in the loop, Blackberry is a wireless
connectivity solution that allows you to stay
connected to people and resources while on
the go more easily and reliably than the
competing technologies.
Positioning Maps: Luxury SUVs
Price vs. Orientation Dimensions
Positioning Strategy
Competitive advantages
Points of Parity
Points of Difference => Differentiation
Positioning results from differentiation and
competitive advantages.
Positioning may change over time.
Sources of Differentiation
Product Design
Quality
Additional Services
Image
People (Staff)
Price
Other
6-24
Choosing the Right Competitive Advantages
The best competitive advantages are
Important
Distinctive
Superior
Communicable
Pre-emptive
Affordable (to company and consumer)
Profitable
Moral: Avoid meaningless differentiation.
Generic Product Positions
& Value Propositions
In-class Activity
Describe how each of the following brands,
companies, or products is positioned:
http://www.manishparihar.co.in/
