Segmenting Targeting and Positioning

Segmenting Targeting Segmenting Targeting and Positioningand Positioning

Maxwell RanasingheMaxwell RanasingheB.Sc. ( Business Administration) Hons. MAAT, B.Sc. ( Business Administration) Hons. MAAT,

Attorney at Law, CPM ( New Haven- USA) MSLIM Attorney at Law, CPM ( New Haven- USA) MSLIM

STP : Segmenting- Targeting- STP : Segmenting- Targeting- Positioning ( Strategic Marketing Positioning ( Strategic Marketing Thinking)Thinking)

Research into market will let know the needs and Research into market will let know the needs and wants of customers. wants of customers.

There are different groups of customers in the There are different groups of customers in the market place.market place.

Very often companies may not be able to provide Very often companies may not be able to provide needs of all such groups of the market.needs of all such groups of the market.

Therefore, a company should identify groups with Therefore, a company should identify groups with simillar needs and find out the best group or groups simillar needs and find out the best group or groups that they should offer their productsthat they should offer their products

Further a company also should consider how their Further a company also should consider how their product could be positioned in the minds of the product could be positioned in the minds of the customer so that they will see a difference among customer so that they will see a difference among other products. other products.

STP is all about MarketsSTP is all about Markets What are MarketsWhat are Markets Generally the common meaning of a Generally the common meaning of a

market is “ a place where buyers and market is “ a place where buyers and sellers gather to buy and sell goods and sellers gather to buy and sell goods and services”. Town Center, Shopping Mall, services”. Town Center, Shopping Mall, Bazzar, Pola etc.Bazzar, Pola etc.

Marketing definition of a market comprises Marketing definition of a market comprises the basic elements ( buyer/seller) of the the basic elements ( buyer/seller) of the common meaning but a wider and more common meaning but a wider and more realistic approach. It says “ Market is a realistic approach. It says “ Market is a people with needs and wants to satisfy, people with needs and wants to satisfy, willing to buy them and have the ability to willing to buy them and have the ability to buy” buy”

Therefore a market could be anywhere in Therefore a market could be anywhere in the world as long as the above elements the world as long as the above elements are there. are there.

Markets could be present market or Markets could be present market or future marketsfuture markets

Markets could be individuals or Markets could be individuals or organisationsorganisations

Markets may have customers and Markets may have customers and consumersconsumers

Products could be consumed or usedProducts could be consumed or used Eg. Food: consumed - shoes : Eg. Food: consumed - shoes :

usedused

Now talk with the person next Now talk with the person next to youto you

Target Marketing StrategiesTarget Marketing Strategies

Mass Market ( undifferentiated)Mass Market ( undifferentiated) As discussed market comprises As discussed market comprises

different types of customers. Their different types of customers. Their needs and wants also differ. needs and wants also differ. Therefore a marketer tries to offer Therefore a marketer tries to offer one product to the whole market and one product to the whole market and satisfy common need of the market.satisfy common need of the market.

Company designs the product to Company designs the product to appeal to larger number of buyers.appeal to larger number of buyers.

It relies on mass distribution, mass It relies on mass distribution, mass advertising and tries to give the advertising and tries to give the product a superior image in peoples product a superior image in peoples mind.mind.

However mass marketing may However mass marketing may not be able to satisfy all not be able to satisfy all consumers as their needs and consumers as their needs and wants differ. wants differ.

Eg. Vehicle market for Sri Eg. Vehicle market for Sri Lanka- Motor Cycles, small Lanka- Motor Cycles, small cars, mid size cars, luxury cars cars, mid size cars, luxury cars and Jeepsand Jeeps

Further mass marketer may not Further mass marketer may not be able to compete with more be able to compete with more focused competitors who supply focused competitors who supply different types of productsdifferent types of products..

Differentiated (Segmented Differentiated (Segmented marketing )marketing )

Identifying groups with similar needs Identifying groups with similar needs and wants is called segmentation.and wants is called segmentation.

Then it would be easy to supply Then it would be easy to supply different products if necessary to suit different products if necessary to suit the different market segments the different market segments

A market segment means a large A market segment means a large identifiable group of customers within identifiable group of customers within a market with similar needs and a market with similar needs and wants, purchasing power, wants, purchasing power, geographical location, buying geographical location, buying attitudes or buying habits.attitudes or buying habits.

If all are having the same need then If all are having the same need then it could be considered as the mass it could be considered as the mass market.market.

If each and every body’s need is If each and every body’s need is separately identified and served it is separately identified and served it is called Mass Customization. called Mass Customization.

Segmentation is something between Segmentation is something between the Mass Marketing and Mass the Mass Marketing and Mass Customisation. It does not talk about Customisation. It does not talk about serving the whole market with one serving the whole market with one product or serving every individual product or serving every individual with a different product. with a different product.

But it talks about grouping But it talks about grouping customers with similar needs customers with similar needs and serving them with the and serving them with the appropriate product.appropriate product.

Mass Market – Segmentation- Mass Mass Market – Segmentation- Mass CustomisationCustomisation

Now talkNow talk

Concentrated (Niche) Concentrated (Niche) MarketingMarketing

A niche is more narrowly A niche is more narrowly defined group, seeking defined group, seeking distintictive mix of benefits . distintictive mix of benefits . It is typically a small market It is typically a small market whose needs are not served whose needs are not served through the segmented through the segmented marketing. Niche markets marketing. Niche markets could be identified within a could be identified within a segment by sub dividing the segment by sub dividing the segment again.segment again.

Eg. Those segments of students who Eg. Those segments of students who go for tuition classes may have a go for tuition classes may have a need for more concentrated need for more concentrated coaching. So small group class coaching. So small group class coaching is a Niche market within coaching is a Niche market within the tuition going segment.the tuition going segment.

Eg. Within the furniture market there Eg. Within the furniture market there could be a market for expensive could be a market for expensive antiques.antiques.

Niche market may not be big but Niche market may not be big but may be lucrative and may not have may be lucrative and may not have much competition.much competition.

Individual MarketingIndividual Marketing( Mass ( Mass customization)customization)

The ultimate level of segmentation is to The ultimate level of segmentation is to have segments of “one customer” per have segments of “one customer” per segment or indvidual markets or one to one segment or indvidual markets or one to one marketing. It could be called as mass marketing. It could be called as mass customization as well.customization as well.

Eg. Tailor made garmentsEg. Tailor made garments Internet based ordering of computers with Internet based ordering of computers with

his own specifications by an individualhis own specifications by an individual An organisational buyer orders the exact An organisational buyer orders the exact

requirements.requirements.

Benefits of Market Benefits of Market SegmentationSegmentationIt will have benefits both to It will have benefits both to

marketer and the customermarketer and the customer Understanding Customer better- Understanding Customer better-

Segmenting will force the Segmenting will force the marketer to analyse the marketer to analyse the customers in the marketcustomers in the market

Understanding competitor Understanding competitor better- In a segmented market better- In a segmented market the marketer will concentrate on the marketer will concentrate on specific markets and will easily specific markets and will easily understand the behavior of the understand the behavior of the competitors competitors

Allocate resources effectively rather Allocate resources effectively rather than spread thinly across the whole than spread thinly across the whole marketmarket

Plan well- As the market is Plan well- As the market is understood closely, it would be easy understood closely, it would be easy to develop a fine tuned marketing to develop a fine tuned marketing plan to suit the requirements of the plan to suit the requirements of the segmentsegment

Expanding the market- Better Expanding the market- Better analysis of customers could increase analysis of customers could increase the customer base of the segment.the customer base of the segment.

How to segment a market effectively How to segment a market effectively ((SAMAD)SAMAD)

If a market segment to be meaningful to If a market segment to be meaningful to the marketer, it should be measurable, the marketer, it should be measurable, substantial, accessible, differentiable and substantial, accessible, differentiable and actionable.actionable.

Measurable- Should be able to identify Measurable- Should be able to identify and quantify characteristics: customers, and quantify characteristics: customers, buying power, volume of business that buying power, volume of business that could be done etccould be done etc

Substantial- Segments should be large Substantial- Segments should be large enough to serve. It should be substantial enough to serve. It should be substantial in value. If not it would not be profitable in value. If not it would not be profitable to serve the market.to serve the market.

Accessible- Market should be Accessible- Market should be reachable through your own sales reachable through your own sales force or through an agent or a force or through an agent or a distributor to serve. Eg. Certain parts distributor to serve. Eg. Certain parts of North may not be reachable to sell of North may not be reachable to sell goods.goods.

Differentiable- Segments should be Differentiable- Segments should be different. They should be reacting to different. They should be reacting to marketing stimuli differently. Eg. Full marketing stimuli differently. Eg. Full Cream milk powder for healthy and Cream milk powder for healthy and Skimmed Milk powder for High Skimmed Milk powder for High Cholesterol patientsCholesterol patients

If there is no difference among If there is no difference among the segments then there is no the segments then there is no purpose in identifying them purpose in identifying them separately. separately.

Eg. There cannot be a Eg. There cannot be a difference in buying behavior of difference in buying behavior of a After Shave lotion between the a After Shave lotion between the Junior executives and Senior Junior executives and Senior Executives. Executives.

ActionableActionable Effective marketing programs could be Effective marketing programs could be

formulated to attracting and serving the formulated to attracting and serving the segment. segment.

Even if you identify a market segment with a Even if you identify a market segment with a specific requirement, if you do not have a specific requirement, if you do not have a product to offer or if your staff is not capable of product to offer or if your staff is not capable of offering something attractive to that segment offering something attractive to that segment then the purpose of identifying that segment is then the purpose of identifying that segment is of no use. of no use.

E.g. Siksil may not be in a position to offer E.g. Siksil may not be in a position to offer classes for an identified specific segment of classes for an identified specific segment of students who wants a Group Class restricted students who wants a Group Class restricted for 10 students.for 10 students.

Now talkNow talk

Segmenting Consumer Segmenting Consumer MarketsMarkets

Following bases are used to Following bases are used to segment the consumer marketssegment the consumer markets

(A) (A) Geographic Segmentation-Geographic Segmentation-

Dividing the market into different Dividing the market into different geographic areas such as geographic areas such as

Countries ( England, USA, India, Pakistan) ,Countries ( England, USA, India, Pakistan) ,

Regions ( North East, Hilly, flat, Valleys) Regions ( North East, Hilly, flat, Valleys)

Density ( high, Mid, low population) and Density ( high, Mid, low population) and

Climate ( cold, tropical, mediumClimate ( cold, tropical, medium) )

(B) Demographic segmentation(B) Demographic segmentation Dividing the market by taking the Dividing the market by taking the

characteristics of people in the market. characteristics of people in the market. Age- ( <1 – 1to 5- 6 to 12- 13 to 19 – 20 to Age- ( <1 – 1to 5- 6 to 12- 13 to 19 – 20 to

30 – 30-50 over 55)30 – 30-50 over 55) Generation – Baby boomers( US after war), Generation – Baby boomers( US after war),

New generation, Older Generation etc.New generation, Older Generation etc. Nationality- Sri Lankan, Indian, American, Nationality- Sri Lankan, Indian, American,

ChineseChinese Social Class- Lower low, low, low middle, Social Class- Lower low, low, low middle,

middle, upper middle- low upper. Upper. middle, upper middle- low upper. Upper. Upper Upper( affluent)Upper Upper( affluent)

Family Size ( 1-2, 3-5, 5-7)Family Size ( 1-2, 3-5, 5-7) Education upto 5, upto 8 upto O/L, Education upto 5, upto 8 upto O/L,

AL, Degree, OtherAL, Degree, Other Religion – Buddhist, Islam, Hindu, Religion – Buddhist, Islam, Hindu,

Catholic, ChristianCatholic, Christian Race- Sinhala, Tamil, MoslemRace- Sinhala, Tamil, Moslem Occupation- Farmer, teacher, Occupation- Farmer, teacher,

doctor, lawyer, Police, Army, doctor, lawyer, Police, Army, Politician, Singer, Actor, JournalistPolitician, Singer, Actor, Journalist

( C ) Psychographic Segmentation( C ) Psychographic Segmentation

Here life styles and personalities Here life styles and personalities are taken into consideration in are taken into consideration in segmenting the marketssegmenting the markets

Life style-Life style- People have different People have different ways of living. Culture influences ways of living. Culture influences a lot in this aspect. Eg. Outdoor a lot in this aspect. Eg. Outdoor types and homely types, sports types and homely types, sports and fitness loversand fitness lovers

PersonalityPersonality- People have - People have different types of personalities. different types of personalities. Sincere, exciting, amiable, stern, Sincere, exciting, amiable, stern, aggressive, calm, cunning, aggressive, calm, cunning, skeptical, jovial etc.skeptical, jovial etc.

Behavioral SegmentationBehavioral Segmentation There are different types of There are different types of

behaviors in people and it could be behaviors in people and it could be used as a basis for segmentation.used as a basis for segmentation.

Benefit- quality, service, price, Benefit- quality, service, price, durability, convenience, safetydurability, convenience, safety

Occasion- Festivals, Anniversary, Occasion- Festivals, Anniversary, birthday, Wedding, Graduationbirthday, Wedding, Graduation

User Status- regular- non user- User Status- regular- non userpotential- ex userpotential- ex user

Usage rate- heavy, medium, light Usage rate- heavy, medium, light Loyalty status- very loyal- less loyal- Loyalty status- very loyal- less loyal-

not loyalnot loyal State of readiness – ready to buy- State of readiness – ready to buy-

well informed- interested-aware- not well informed- interested-aware- not awareaware

Attitude towards a product- positive- Attitude towards a product- positive- negative- indifferent- hostilenegative- indifferent- hostile

Segmenting Business markets Segmenting Business markets ( Not for SIKSIL)( Not for SIKSIL)

Demographic VariablesDemographic Variables Operating VariablesOperating Variables Purchasing VariablesPurchasing Variables Situational VariablesSituational Variables Personal VariablesPersonal Variables

Segmenting Business Segmenting Business markets…….. ( Not for SIKSIL)markets…….. ( Not for SIKSIL)

Demographic : Industry type- Size- Demographic : Industry type- Size- LocationLocation

Operating: Technology- User Status- Operating: Technology- User Status- CapabilitiesCapabilities

Purchasing : function-power structure- Purchasing : function-power structure- relationship-policies- criteriarelationship-policies- criteria

Situational- Urgency- Specific need- Situational- Urgency- Specific need- size of ordersize of order

Personal- buyer seller similarities- Personal- buyer seller similarities- attitude for risk- loyaltyattitude for risk- loyalty

Selecting the Target Market Selecting the Target Market ( Market Targeting)( Market Targeting)

Once the segmentation done Once the segmentation done effectively, the challenge is to find out effectively, the challenge is to find out what market or market segments that what market or market segments that you are going to serve with what you are going to serve with what product or productsproduct or products

Single SegmentSingle Segment Selective SegmentsSelective Segments Product SpecializationProduct Specialization Market SpecializationMarket Specialization Full Market CoverageFull Market Coverage

Segment the market for fishSegment the market for fish

P-2 Seer (Thora)

P1- Salaya

P- 3 Prawns

Figure 8.6 Patterns of Target Market SelectionFigure 8.6 Patterns of Target Market Selection



Once the Target Marketing is Once the Target Marketing is done, the marketer should done, the marketer should position the product properly in position the product properly in the consumers mind to complete the consumers mind to complete the STP process in marketingthe STP process in marketing

What is positioningWhat is positioning

“ “ Disembodied mental image , Disembodied mental image , specifically, a location in consumers specifically, a location in consumers mind”mind”

““Positioning is doing something to Positioning is doing something to the collective mind of the consumer”the collective mind of the consumer”

There is a comparative perspective There is a comparative perspective in positioning as positioning implies in positioning as positioning implies the existence of something else.the existence of something else.

The positioning is the act of creating The positioning is the act of creating a perception or image or status in a perception or image or status in buyers mind.buyers mind.

Perceptual maps and positioningPerceptual maps and positioning

Favorable Attitude

Unfavorable attitude

Low familiarityHigh familiarity

•Your Brand

•Competito

r A

Competitor C

Competitor B

Positioning is used to make a specific brand Positioning is used to make a specific brand appear to be different and better than all appear to be different and better than all competing brandscompeting brands

Key points to note are Key points to note are - It is a strategic activity( not - It is a strategic activity( not

tactical)tactical) - It is aimed at developing a - It is aimed at developing a

sustainable competitive advantagesustainable competitive advantage - It is concerned with managing - It is concerned with managing

perceptionsperceptions -Brand image and reputation are -Brand image and reputation are

the end resultsthe end results

Strategies for brand Strategies for brand positioningpositioningFeatures And Attributes

Benefits Problem Solving

Competition Corporate reputation and image

Target user

Causeemotion

Aspiration Value or pricingGuarantee