Marketing Segmentation &
Positioning
Marketing Segmentation
 Dividing a market into smaller groups with distinct needs,
characteristics or behaviors who might require separate
products or marketing mixes.
 Companies have moved from mass marketing to target
marketing
 Companies look for different ways in which to segment the
market and develops profiles of the resulting market
segments.
Market Targeting
The process of evaluating each market segments attractiveness and
selecting one or more segments to enter
Differentiation
Actually differentiating the firm’s market offering to create superior
customer value
Positioning
Arranging for a product to occupy a clear, distinctive and desirable place
relevant to competing products in the minds of target consumers
Segmenting consumer markets
Geographic segmentation
 Dividing markets into different geographical units such as,
nation, states, region, counties, cities or neighborhoods .
 Many companies localize their products, advertising,
promotion, and sales efforts to fit the needs of individual
regions, cities and even neighborhoods
eg: Coke developed four ready to drink canned coffees for
Japanese.
Demographic segmentation
Dividing a market into groups based on variables such
as age, gender, family size, family life cycle, income,
occupation, education, religion, race, generation and
nationality.
 Age and life-cycle segmentation: Dividing a market into
different age and life-cycle groups eg: Anlene milk
 Gender Segmentation: Dividing a market into a different groups
based on gender . eg: Nivea for men
 Income: Dividing a market into different groups based on social class,
lifestyle, or personality characteristics. eg: Standard charted priority
banking
Psychographic segmentation
 Dividing a market into different groups based on social class,
life style or personality characteristics.
eg: American Express “My life My Card” campaign provides a glimpse
into the lifestyle of famous people
Behavioral Segmentation
Dividing a market into groups, based on consumer knowledge,
attitude, use or response to a product
 Occasions : Dividing a market into groups according to occasions when
buyers get the idea to buy, actually make their purchase or use the purchase
item. eg : Ginger beer with food
 Benefit sought: Dividing a market into groups according to the different
benefits that consumers seek from the products. eg: Athletic wear segments based on
functional benefits
 User status: Segment into non user, ex user, potential users, first time user
and regular user. eg: P&G invites newly weds to visit pamper.com
 Usage rate: Segment based on usage, Light, Medium and Heavy users. eg:
Sidhaleppa
 Loyalty Users : Divide groups based on there degree of loyalty. eg: Arpico
privilege users
Segmenting Business Markets
Segment Business Markets
Consumers and business use many of the same variables to
segment their markets. Business buys can be segmented
geographically, demographically (Industrial and company
size), or by benefit sought, user status or loyalty status.
Business markets use additional variables, such as customer
operating characteristics, purchasing approaches, situational
factors and personal characteristics.
eg:
For small business customers, American Express has
created the OPEN: Small Business Network, “ the one
place that’s all about small business”
Segmenting International Markets
Forming segment of consumers who have similar needs
and buying behavior even though they are located in
different countries.
Teens show surprisingly similarity no matter where they
live – these teens could be from almost anywhere.
Thus, many companies target teens with worldwide
marketing campaigns
Eg: Mercedes Benz targets the worlds well-to-do, regardless of their country.
Requirements for Effective
segmentation
 Measurable: The size, purchasing power, and profiles of the
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segments can be measured.
Accessible: Market segment can be effectively reached and
served.
Substantial: The market segments that are large or
profitable enough to serve.
Differentiable: The segments are conceptually
distinguishable and responses differently to different
marketing mix elements and programs
Actionable: Effective programs can be designed for
attracting and serving the segments
Selecting Target Market segments
Target Marketing
A set of buyers sharing common needs or
characteristics that the company decides to serve
Undifferentiated Marketing
A market-coverage strategy in which a firm decides
to ignore market segments differences and go after
the whole market with one offer.
It focuses on what us common in the needs of
consumers rather
than on what is different.
eg: Araliya sugar
Differentiated Marketing
A market-coverage strategy in which a firm decides
to target several market segments and designs
separate offers for each.
eg: Baby Cheramy
Baby chermy range for kids
Cheramy touch for adults
Concentrated Marketing
A market coverage strategy in which a firm goes
after a large share of one or few segments or niche.
Niche marketing can market more effectively and
more efficiently.
Eg: Apple computers
Micro Marketing
The practice of tailoring products and marketing programs to
the needs and wants of specific individuals and local customer
groups – includes local marketing and individual marketing
Local marketing – Tailoring brands and promotions to the
needs and wants of local customer groups-cities neighborhoods,
and even specific stores.eg: bread talk –seeni sambola bun to suit the local
pallet
Individual marketing- Tailoring products and marketing
programs to the needs and preferences of individual customersalso labeled “markets-of-one marketing” “customized marketing” and
“one to one marketing”. eg: Dell creates customer configured computers
Differentiation and Positioning
Positioning Map
Competitive advantage
An advantage over competitors gained by offering
Consumers greater value, either through lower
prices or by providing more benefits that justify
higher prices.
Companies should differentiate at every customer
contact point- product, services, channels people,
or image
Choosing the right competitive
advantage
How many differentiations to promote:
companies could choose to differentiation on a
unique selling proposition (USP) or more than one
differentiation.
Unique selling
proposition
More than one
differentiation
Carrot Face wash
Face wash & Cleanser
Choosing the right competitive
advantage
Which differentiations to promote: Not all differentiations are
meaningful. Key criteria's to follow in establishing a difference.
 Important: The difference delivers a highly valued benefit to target buyers
 Distinctive: Competitors don’t offer the difference or the companies can offer
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in a more distinctive way
Superior: The difference is superior to other ways that customers might
obtain the same benefit
Communicable: The difference is communicable and visible to buyers.
Preemptive : Competitors cannot be copy
Affordable : Buyers can offered to pay for the difference
Profitable : Companies can introduce the difference profitably
Select an overall positioning strategy
Benefits
A full positioning of the brand is called the brands
Value proposition
Price
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The same
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