Segmentation, targeting and positioning

1. Segmentation, Targeting & PositioningSegmentation, Targeting & Positioning
By: IBS GURGAONBy: IBS GURGAON

2. Market SegmentationMarket Segmentation
 It is the process of identifying specific segments of
potential customers with homogeneous attributes
 It can be based on many factors like habits, convenience,
values, cultures etc.
 It tries to identify consumers in different countries who
share similar needs and desires.
 There can be a “conventional” and an “unconventional
wisdom” to identify a segment.
 Demographics, psychographics, behavioral characteristics
and benefits help find segments.

3. Demographic SegmentationDemographic Segmentation
 Measurable characteristics like income, population, age,
gender & education contribute to this scale.
 Global demographic trends may be fewer married
couples, changing roles of women etc.
 Country demographics are taken into consideration by
companies to make global strategy.
 Demographic changes can create opportunities for
innovation in many fields.
 This helps create new categories of products, brings in
innovation in price, quality and process.

4. Demographic SegmentationDemographic Segmentation
 There are products which are complemented by higher
population.
 Income is a vital criteria for a company before launching
any product in a country.
 However, sometimes income and population may as well
give wrong or biased analysis.
 Purchasing Power Parity (PPP) sometimes gives a better
understanding of the market.
 Macro level data should be carefully used when making a
segment as these may not reveal the truth.

5. Demographic SegmentationDemographic Segmentation
 Age is an important attribute for identifying a segment
across markets say ‘teens’.
 Age helps create aspirations, usage, convenience and
image.
 Segmentation based on gender preferences can be seen
across categories and markets.
 Traditional companies into male accessories, toiletries
venturing into female market space.
 Concept or trial marketing is undertaken by companies to
see the response before segmenting.

6. Psychographic SegmentationPsychographic Segmentation
 It involves grouping people in terms of their values,
cultures, attitudes, lifestyles etc.
 Mass market, middle class and luxury type products, all
depend largely on this type of segmentation.
 It is more micro and complex in nature as it tries to
identify the inner most preferences.
 Markets pose various challenges along with these
psychographic trends.
 The world becoming more cosmopolitan and
heterogeneous, these challenges are growing.

7. Behavior SegmentationBehavior Segmentation
 Behavior is growing to be an important criteria for
grouping people for any product.
 Usage rates, i.e. how often the consumer uses the product
is often a strong criteria.
 Consumers also can be grouped on use status, i.e.
potential users, non-users, ex-users, first timers etc.
 The two most important criteria in this type of
segmentation may be experience and taste.
 And mostly there is no logic when determining these
human attributes.

8. Benefit SegmentationBenefit Segmentation
 Cereals like Kellogg has extensively tried to bank on this
type of segmentation in various markets.
 Many FMCG brands into toothpastes, food and other
categories use benefits as a strong differentiator.
 Benefit segmentation may lead to consumers’ perceived
needs.
 Global companies like Procter & Gamble, Unilever are
banking on this type of segmentation.
 This type of segmentation is more effective in home care,
personal care business as well.

9. Ethnic SegmentationEthnic Segmentation
 Particular communities in a single market may lead to this
type of segmentation.
 Ethnic groups have complex mixtures of behavior,
psychographic nature among them.
 Marketers have to smartly find out the true nature of the
markets to arrive at this segmentation.
 This segmentation can lead to consumer preferences
across automobiles, food, beverages, cosmetics etc.
 This is one of the strong basis in a hugely heterogeneous
market like India.

10. TargetingTargeting

11. TargetingTargeting
 Product-market refers to a market defined by a product
category.
 In automotives, the target markets may be small car
market, SUV market or MPV market.
 Marketing model drivers are the key elements required
for a business to thrive in a certain market.
 Enabling conditions are the structural market
characteristics which determine the success of the
marketing model.
 Many a times a first-mover advantage is beneficiary for
the company.

12. Standardized TargetingStandardized Targeting
 Its like mass marketing in a single market with the same
marketing mix.
 It is also called undifferentiated target marketing, with a
belief that a mass market exists in the market.
 Product adaptation is minimized and intensive
distribution is thrust upon.
 The objective of such a strategy is lower production and
marketing costs.
 This strategy is successful for products with higher
visibility and aspirational brand equity.

13. Concentrated TargetingConcentrated Targeting
 It involves devising a marketing mix to reach a niche
which is a separate individual segment.
 Products across industries can have this strategy which
calls for a different set of attributes.
 The first of this attribute is a strong value the product
promises to deliver.
 The brand is a absolute differentiator from the mass
market brands which are available in the market.
 This strategy may go well with adaptation to suit local
tastes even.

14. Differentiated TargetingDifferentiated Targeting
 Also called, multi-segment targeting, it is targeting two or
more segments with multiple marketing mix.
 Generally companies offer variants in the form of product
mix to a single market.
 This strategy helps in grabbing more market share within
the horizon of the potential customers.
 This addresses the need to cater to the customers’
demand of getting scaled up or down versions.
 Customers generally associate so much with the brand
that they need it to be affordable sometimes.

15. PositioningPositioning
 It is the act of differentiating a brand in customers’ minds
on the promise of the brand.
 It talks about the benefits and attributes of the brand.
What it stands for and what it doesn’t.
 It is precisely designed to take care of the brand’s
personality in the minds of the customer.
 It complements the other strategies of segmenting and
targeting the market.
 While segmentation and targeting are the external
factors, positioning is the internal factor of the brand.

16. Attribute or BenefitAttribute or Benefit
 Often the product attribute or the benefit it offers is the
biggest criteria of positioning.
 A product brand talks of the tangible benefits while a
service brand will talk of intangibles like experience.
 As for a product, the benefits can be with respect to price,
features, performance etc.
 For a service product, it can be availability, convenience,
experience etc.
 It is the most simplistic and visible model of positioning
for customers’ understanding.

17. Quality & Price PositioningQuality & Price Positioning
 Assurance of quality through top end pricing and features
 Deliberate limited supply through ‘available in select
cities’ tags
 Focussed positioning for a niche group of customers with
a penchant for exclusiveness
 Sometimes geography is used for quality attribute like
Australian for Beer – Fosters
 Another example being German engineering for
Volkswagen cars

18. Use or User PositioningUse or User Positioning
 This type of positioning strategy refers to the way a
product is used in a real life incident.
 The celebrity here may be a film, an event or even a
personality.
 For example, Dell uses corporate personalities like Raman
Roy for endorsement.
 This is a more effective way of promoting the brand as it
creates a very genuine reaction.
 Audience relate more to this type of positioning as it is
endorsed by people who have achieved a lot.