MARKET SEGMENTATION, TARGETING AND
POSITIONING
Introduction
 Today, companies are using target
marketing instead of mass marketing.
 Target marketing is the marketing
approach which focuses on serving a
specific type of customers.
 It is based on the concept that the market
for a particular product is not
homogeneous.
 Target marketing involves market
segmentation.
Mass marketing
 Mass marketing is the marketing
approach which involves serving all
customers using the same marketing
mix.
 Mass marketing does not involve
market segmentation.
Mass marketing
(No market segmentation)
Stages of target marketing
 Market segmentation=dividing the
market into smaller submarkets with
common needs or characteristics
 Market targeting=selection of one
or more market segments to enter
 Market
positioning=communicating the
unique benefits of the product to the
selected market
Market segmentation
 Market segmentation is the process
of dividing a market into different
groups of customers with similar
needs and characteristics.
 . Each submarket is known as a
market segment.
Reasons for market segmentation
 It is too difficult to satisfy the needs
and wants of all consumers
 Customers are too numerous, too
widely spread, and have different
needs and buying practices.
Benefits of market segmentation
 It helps to identify individuals with
common characteristics, needs, and
patterns of behavior.
 It provides information that helps to
design the suitable marketing mix
that specifically meets the customer
needs
 It helps to set the appropriate timing
of the promotion efforts
Benefits of market segmentation
 It helps the firm to make proper
allocation of resources
 It helps to gain competitive
advantage
 It helps to overcome cannibalization
(domination of a market by one large
firm)
Segmentation criteria
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Measurability---the segment should be identifiable
and measurable. There should be information telling
the size, purchasing power and profiles of the
segment.
Homogeneity--- the segment should be
homogeneous. People within a segment should have
common needs and characteristics that distinguish
them from other segments.
Differentiability/ heterogeneity---a market
segment must be unique (different from others) in
its response to a marketing mix.
Segmentation criteria
 Accessibility---the segment should be
reachable and accessible by communication
and distribution channels.
 Substantiality---a segment must be large
enough to be profitable.
 Actionability---a segment should be of
appropriate size for the company’s
resources to handle
 Stability---the segment should be stable
(not likely to change).
Bases for market segmentation
There are four main ways of segmenting
consumer markets:
 Geographic segmentation
 Demographic segmentation
 Psychographic segmentation
 Behavioral segmentation
Geographic segmentation
 Involves dividing the market into different
geographic units such as nations, regions,
states,neighbourhood, cities or climate.
 Demand for some goods and services can
vary according to the geographic region
 This approach can be appropriate for the
following products
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Clothing items
Drinks
Air conditioning equipment
Farm equipment
Pampers
This ad is an example of
geographic segmentation.
When visiting the web site
look for the different
countries Pampers markets
to.
Demographic segmentation
Involves dividing the market based on
demographic variables.
Demographic factors used in
segmenting the market are:
 Age
 Gender
 Family size
 Family lifecycle
Demographic variables
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Income
Occupation
Education
Ethnicity
Nationality
Religion
Segmentation by sex
Segmentation by age
Income segmentation
Watch for elite class
Watch for middle class
,
Examples
Markets for the following products can be
segmented using demographic variables:
 Cosmetics
 Clothing
 Games
 Toys
 Video show
 Books
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Hotels
Recreational places
Luxury cars
Calculators
Cigarette
Type of food
Music
Psychographic segmentation
 Involves dividing the market on the basis of
lifestyle, personality and social class.
 Lifestyles: values, attitudes, opinions,
interest
 For example, two young married women,
each with two children and equal family
income, may live two different lifestyles,
which affect their particular buying patterns
Examples
Segmentation of the market for
 Clothing
 Luxury cars
 Restaurant
 Pizza
 Cruise
Behavioural segmentation
Involves dividing the market into
groups based on their knowledge,
attitudes, uses and responses to
the product.
The following are commonly applied behavioral segments
 Occasions : Groups individuals according to the
occasions when they purchase, use or think of buying a
product.
 Benefits Sought : Groups individuals according to the
benefits they seek from the product.
 Usage Rate : Groups individuals according to the level
of usage they make of the product, be it Heavy,
Medium or Light usage.
 User Status : Groups individuals according to whether
they are non-users, potential users, first-time users,
regular users, or ex-users of a product
Market targeting
Market targeting is the
process of evaluating the
attractiveness of each
market segment and
selecting one or more of the
segments to enter
Determinants of attractiveness of
the market segment
 Size of the market segment (number
of customers)
 Growth rate of the segment
 Competition in the market
 Brand loyalty of existing customers in
the segment
 Sales potential
Target market selection strategies
 Undifferentiated marketing
(mass marketing)
 Differentiated marketing
 Concentrated marketing
 Micro marketing
Undifferentiated marketing
(mass marketing) :
 Occurs when a firm produces only one
product or product line and uses the same
marketing mix to serve the entire market.
 There is no market segmentation.The firm
decides to ignore market segment
differences
 This strategy may be useful where a
monopolistic situation exists. E.g. the
strategy employed by DAWASCO
Differentiated marketing
 When a firm produces numerous
products and uses different
marketing mix to serve different
segments
Differentiated marketing of laundry
detergents
Differentiated marketing
.
Marketing of coca cola
Concentrated marketing
(niche marketing)
 when a firm commits all of its
marketing resources to serve a single
market segment
Cosmetics for ethnic women who
have thirst for the exotic
Micro marketing
 is when a the marketing mix is
tailored on an individual consumer
basis.
 Micromarketing includes local
marketing and individual marketing.
Market positioning
 Positioning is the process of creating a distinct
image for the product in the mind of customers.
 Positioning indicates how a company wants
customers to perceive its product relative to
competing products. That is- how the company wants
customers to see its product.
 Positioning involves finding a place in the mind of the
customer to put its product.
 Positioning is used in conjunction with branding (e.g.
business logo) and advertising slogans.
“How can I make my business
stand out in the crowd?”
Product position
 Product position is the place the
product occupies in the customer’s
mind.
Examples of positioning
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Volvo is positioned as the most durable, safest and
spacious car by the slogan “the safest, most durable
wagon in which your family can ride”
Stella Artois lager was once positioned as a lager of
high quality denoted by high price by the slogan
“reassuringly expensive”
Sunflower oil is positioned as cholesterol free cooking
oil
Blue band margarine by Unilever is positioned and
advertised as stronger brand to promote faster
growth.
Examples of positioning
 BMW electric vehicles are positioned as
ultra-premium brand
 NIVEA is positioned as a day cream, a night
cream, a cream for different weather
conditions, a moisturizer, and a protective
cream.
 de beers diamond is positioned beers that
promote loving and long-lasting
relationship by the slogan “A diamond is
forever”
Benefits of positioning
 To ensure that the product is
differentiated in the mind of
customers
 To strengthen the power of messages
directed at customers
 To decide on the grounds on which to
compete
Positioning process
The process of positioning involves three
activities or steps:
 Identification of possible competitive
advantages. ( position of differentiation)
 Choosing the right competitive advantage
(selecting the unique selling proposition)
 Selecting an overall positioning strategy.
Positioning strategies
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Positioning by attributes. This approach is based
on specific features of the product. E.g. durability,
safety, designs etc.
Positioning by quality or price
Positioning with respect to benefits e.g. white
dent is positioned as the tooth paste for cavity
protection, homo detergent is positioned as dirt and
odor remover.
Positioning with respect to
uses/application/occasion or time. Eg iodex for
sprain and muscle pain, Vicks Vacorub for child’s cold
at night
INDIVIDUAL ASSIGMENT
 Submission date : 4th Jan 2021
1. Give reasons why marketing mix is
referred to as controllable variables.
2. List and briefly explain functions of
marketing
3. Give reasons why income and gender
segmentation are considered popular
Positioning strategies
 Positioning with respect to users e.g.
blue band for promoting quick growth in
kids
 Positioning against competitors
(without mentioning their name) e.g.
“vodacom, the leading cellular network”,
“when you are number two, you try harder”
by Avis against Hertz car company in rental
car services.
 Positioning by product category/class.