Segmenting, Targeting, and

Positioning
 Marketing Process Involves

• Market segmentation
• Targeting market
• Positioning
• Marketing mix
 Conversion Possibility
Students 40%
(Market Size 30 %)

Target

Job seekers Conversion Possibility

(Market Size 20 %) 70%

Foreign Conversion Possibility

Travelers 50%
(Market Size 5 %)

Middle Class Population

Steps in Market Segmentation, Targeting,
and Positioning
Market Market Market
Segmentation Targeting Positioning
1. Identify 3. Evaluate 5. Identify
segmentation attractiveness possible
positioning
variables and of each concepts for
segment the segment each target
market segment
4. Select the
2. Develop target 6. Select,
profiles of segment(s) develop, and
communicate
resulting the chosen
segments positioning
concept
 Basic Market-Preference Patterns

(a) Homogeneous (b) Diffused (c) Clustered

Market
Market
Market

Costumer / Costumer / Costumer /

Consumer Consumer Consumer
 Homogeneous
Heterogeneous Market
“A market in which distinctive and different customer needs can be identified and which can then be
used as a basis for segmentation; opposite” of homogeneous.”
 Homogeneous
Heterogeneous Market
Diffused
Clustered
 Step 1. Market Segmentation
Levels of Market Segmentation
Mass
Mass Marketing
Marketing
Same
Same product
product to
to all
all consumers
consumers (no
(no segmentation)
segmentation)

Segment
Segment Marketing
Marketing
Pdt./
Pdt./ service
service to
to one
one or
or more
more segments
segments (some
(some segmentation)
segmentation)

Niche
Niche Marketing
Marketing
Pdt./service
Pdt./service to
to subgroups
subgroups within
within segments
segments (more
(more segmentation)
segmentation)

Micromarketing
Micromarketing
Products
Products // service
service to
to suit
suit the
the tastes
tastes of
of individuals
individuals and
and locations
locations
(complete
(complete segmentation)
segmentation)
Local Marketing Individual Marketing
Tailoring brands / Tailoring products /
promotions to local programs to individual
 Target the Mass Market versus the
Individual Consumer
Mass
Market Segment
Marketing
Niche Micro-
marketing
The
Individual

gme nt at i on S i ze
m o f Mar ke t Se
Continuu Micro- Personal-
ization
Segment Niche marketing
Standardized Marketing
Marketing Mix
12
 Mass Marketing
Same product /service to all consumers (no segmentation)
 Segment Marketing
Products / service to one or more segments (some segmentation)
 Niche Marketing
Products / service to subgroups within segments (more segmentation)
 Micromarketing
Products / service to suit the tastes of individuals and locations
(complete segmentation)
 Local Marketing
Tailoring brands / promotions to local customer groups

• Salary Account
• Suvidha Account
• Privileged Account
• Training Center
 Individual Marketing
Tailoring products/ programs to individual customers

• Computer Institution
• Designer Outfits
 Steps in the Market Segmentation
Process
• Determine Market Boundaries
• Decide Which Segmentation Variables to
Use
• Collect and Analyze Segmentation Data
• Develop a Profile of Each Segment
• Target Segments to be Served
• Design a Marketing Plan
 Effective Segmentation
• Size, purchasing power,
Measurable
Measurable profiles of segments can
be measured.

• Segments must be large or

Substantial
Substantial profitable enough to serve.

• Segments can be
Accessible
Accessible effectively reached and
served.

• Segments must respond

differently to
Differential
Differential different marketing mix
elements & actions.

• Must be able to attract and

Actionable
Actionable serve
the segments.
 Bases of Market Segmentation
Geographic Demographic Psychograph Behavioral Occasion Benefits-
ic Sought

• Region / •Age •Social Class •Benefits •Segmenting •Markets

Country •Gender •Lifestyle •User Status market can be
• Density •Family Size •Personality •Usage rate based on segmented
•Climate •Income •Loyalty occasion based on the
•Occupation Status when buyers benefits that
•Education •Readiness get the idea consumers
•Religion •Attitude to buy or desire from
•Race actually using a
•Nationality make their specific
purchase, or product
use the
purchased
item.
Geographic Segmentation
Demographic Segmentation
Psychograph Segmentation
Behavioral Segmentation
Occasion Segmentation
Benefits-Sought Segmentation
 Step 2 Market Targeting
Evaluating Market Segment
• Segment Structural Attractiveness Consider
effects of: Competitors, Availability of Substitute
Products and, the Power of Buyers & Suppliers.
• Segment Size and Growth
– Analyze sales, growth rates and expected profitability
for various segments.
• Company Objectives and Resources
– Company skills & resources relative to the segment(s).
– Look for Competitive Advantages.
 Target Market

• “ A set of buyer sharing common needs or

characteristics that the company decide to
serve”
 Five Patterns of Target Market Selection

Single-segment Selective Product

concentration specialization specialization
M1 M2 M3 M1 M2 M3 M1 M2 M3
P1 P1 P1
P2 P2 P2
P3 P3 P3
Market Full market
specialization coverage
M1 M2 M3 M1 M2 M3
P1 P1
P = Product
M = Market P2 P2
P3 P3
Single-segment
concentration
 Selective
specialization
M1 M2 M3
P1
P2
P3
 Selective
specialization
M1 M2 M3
P1
P2
P3
 Product
specialization
M1 M2 M3
P1
P2
P3
 Market
specialization
M1 M2 M3
P1
P2
P3
 Full market
coverage
M1 M2 M3
P1
P2
P3
 Step 2. Market Targeting
Market Coverage Strategies
Company
Company
Marketing
Marketing Market
Market
Mix
Mix

A. Undifferentiated Marketing
Company
Company
Marketing Segment
Segment11
MarketingMix
Mix11
Company
Company Segment
Segment22
Marketing
MarketingMix
Mix22
Company
Company Segment
Segment33
Marketing
MarketingMix
Mix33
B. Differentiated Marketing

Segment
Segment11
Company
Company
Marketing Segment
Marketing Segment22
Mix
Mix
Segment
Segment33
C. Concentrated Marketing
Company
Company
Marketing
Marketing Market
Market
Mix
Mix
 B. Differentiated Marketing

Company
Company
Marketing Segment
Segment11
MarketingMix
Mix11
Company
Company
Marketing Segment
Segment22
MarketingMix
Mix22
Company Segment
Company
Marketing Segment33
MarketingMix
Mix33
 Segment
Segment11
Company
Company
Marketing Segment
Marketing Segment22
Mix
Mix
Segment
Segment33

C. Concentrated Marketing
Step 2. Market Targeting
Choosing a Market-Coverage
Strategy
Company
Resources

Product
Variability

Product’s Life-Cycle
Stage

Market
Variability

Competitors’
Marketing Strategies
 Positioning the Offering

Positioning is the act of

designing the company’s
offering and image to occupy
a distinctive place in the
target market’s mind.
 The BCG Competitive
Advantage Matrix
Number of Approaches
to Achieve Advantage
Few Many
Advantage

Large
Size of the

Volume Specialized

Small Stalemated Fragmented

 Product Differentiation

Conform-
Perfor-
Form Features Quality ance
mance
Quality

Relia- Repair-
Durability Style Design
bility ability
Performance of a Product
 Consistency
(Conformance of a Product)
Reliability
Durability
Accuracy
User Friendly (Ease of Operation)
Repair
Other Value Added Services
Value of a feature and cost
Usefulness
Looks
Performance
 Services Differentiation

Ordering
Ordering Customer
Customer
Installation
Installation

Miscellaneous
Ease
Ease Consulting
Consulting

Services
Customer Maintenance
Customer Maintenance
Delivery
Delivery Training
Training &&Repair
Repair
Ordering Ease
Installation
Delivery
Customer Consulting
Customer Training
Maintenance & Repair
 Differentiation

• Personnel
• Channel
Image Differentiation

Media Atmosphere

Symbols

Events
Media
 Important
Important

Profitable
Profitable Distinctive
Distinctive
Differences Worth
Establishing
Affordable
Affordable Superior
Superior

Preemptive
Preemptive
 Perceptual Map
Live shows
Easy to reach 1.0 Little waiting
Good food
0.8 Educational,
Fantasy
animals
Exercise 0.6
0.4 Marineland
Fun rides Knott’s of the
Berry Japanese Pacific
0.2 Deer Park
Disneyland Farm

-1.6 -1.4 -1.2 -1.0 -0.8 -0.6 -0.4 -0.2 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6
-0.2
Magic Lion
Mountain -0.4 Country
Busch Safari
-0.6 Gardens
-0.8 Economical
 Positioning Process

1. Market Positioning
2. Psychological Positioning
• Objective Positioning
• Subjective Positioning
1. Positioning Approaches
 Market Positioning

• “The market positioning process of

identifying and selecting markets to
determine the criteria for competitive
success.”
 Psychological Positioning

• “Psychological Positioning enables

marketers to create a unique product
image with the objective of creating
interest”.
 Psychological Positioning

• Objective Positioning :- The objective

positioning relates to the objective
attributes of physical products or service.

• Subjective Positioning :- inspiring customer

with some intangible offering
Objective Positioning
Subjective Positioning
inspiring customer with some intangible offering
 Positioning Strategies
• Service / Product Attributes
• Benefits, Problem Solutions & Basic Needs
• Price & Quality
• Specific Use
• Against Other Products
• Product User
• Competitor
• Endorsement
• Empathy
• Service Evidence
Service / Product Attributes
Benefits, Problem Solutions & Basic
Needs
Price & Quality
Specific Use
Against Other Products
Endorsement
Empathy
Service Evidence
 Types of Mass Customization (1)
• The Four Faces of Mass Customization –
– Joseph Pine and James Gilmore - Jan.-Feb. 1997 Harvard Business
Review

– 1. Collaborative Customization:
• Consumer and producer engage in a dialogue to determine customer
requirements
• Computers, clothing and footwear, furniture, some services

– 2. Adaptive Customization:
• Product is designed so that users can alter it themselves to fit unique
requirements on different occasions
• High-end office chairs, R7 golf club, certain electronic devices
– 3. Cosmetic Customization:
• Product is unique in appearance only
• Customer’s chosen text or image on T-shirts, mouse mats,
baseball caps, mugs etc.
• Also called ‘Personalization’

– 4. Transparent Customization:
• Producer provides customized product without consumer
being necessarily being aware that it has been customized
• Can be used when consumer’s needs are predictable or can
be easily deduced, and when customers do not want their
requirements repeated.
• Example- repeat orders for customized clothing, chemicals
Collaborative Customization
Adaptive Customization
Cosmetic Customization
Transparent Customization
 True Mass Customization

• True Mass Customization requires:

– System for customer to specify requirements
easily e.g. Costumer service department, online
ordering, call centre.
– Advanced manufacturing & communication
systems
• Enable economies of scope (keep cost and price low)
– Build-to-order approach
• product is not made until order is received (Book: Build to
Order and Mass Customization – David M. Anderson)
– Minimum order quantity of one
 Advantages of MC
– Customer has control over product
– Does not have to pay for features he/she does
not want (computers etc.)
– Company does not have finished product
inventory  better use of working capital
– Easier for company to differentiate product
– Levels out economic fluctuations
• When slowdown occurs, less backlog of inventory
• Prices do not have to be cut as much
• Therefore, less likelihood of recession
What Mass Customization Isn’t
• Massive Product Variety – Customer has Choice but not
Control;
– E.g. ‘Personalize your cellphone with any of our
2000 skins’
• Advanced ordering system linked to craft production
• Personalization or mass customization of Marketing:
– Use of knowledge about customer to personalize
marketing of standard products.
– Data gathered from loyalty schemes, etc.
• Customized products with minimum quantities
– ‘Your design on a T-shirt, minimum order 100’
 Examples of Mass Customization

• Dell
– Build to order computers
– Assembly, not manufacture (modular
components)
– MC sometimes associated with higher prices
but Dell cheaper than most
– Why? Massive efficiency of supply chain
management
– ‘Living in Dell Time’ - Fast Company, Nov. 2004
• Clothing and Footwear
– NikeID, MiAdidas, Otabo Shoes, Vans
– Bivolino (shirts), U-Jeans, Land’s End, Target, Tommy
Hilfiger
– Clothing and footwear very suited to MC due to each
person being unique in size and shape
• Sports Equipment
– Nautilus (treadmills)
• Industrial equipment, construction
– Kingspan – insulated roof and wall panels, made to
order for size, colour, insulation type
 Mass Customization of Services
• Difficult to define when a service is mass
customized rather than just ‘customized’
• Degree of automation required
• Examples
– MyYahoo, MyMSN, Google Personalized
– Personalized songs – Instasong.com
– I.T. – providing services in similar way to object oriented
software – small pre-existing components of work
combined to create overall service
– Requires increased efficiency and lower prices so as not
to be just ‘packaging’ of existing services