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8 - Segmentation, Targeting, Positioning (STP)

This document discusses market segmentation, targeting, and positioning. It begins by defining market segmentation as dividing a market into smaller groups based on characteristics like needs, demographics, or behaviors. It describes levels of segmentation from mass to niche markets. It also outlines common variables used for segmentation like geography, demographics, and behaviors. Next, it covers market targeting as evaluating segment attractiveness and selecting segments to target. It presents strategies like undifferentiated, differentiated, and concentrated marketing. Finally, it defines market positioning as creating a distinctive place for a product in consumers' minds relative to competitors. It emphasizes the importance of competitive advantages and presenting the right benefits to occupy a strong position. It introduces perceptual

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94 views

8 - Segmentation, Targeting, Positioning (STP)

This document discusses market segmentation, targeting, and positioning. It begins by defining market segmentation as dividing a market into smaller groups based on characteristics like needs, demographics, or behaviors. It describes levels of segmentation from mass to niche markets. It also outlines common variables used for segmentation like geography, demographics, and behaviors. Next, it covers market targeting as evaluating segment attractiveness and selecting segments to target. It presents strategies like undifferentiated, differentiated, and concentrated marketing. Finally, it defines market positioning as creating a distinctive place for a product in consumers' minds relative to competitors. It emphasizes the importance of competitive advantages and presenting the right benefits to occupy a strong position. It introduces perceptual

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Berkshire Hathway cold
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© © All Rights Reserved
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Download as PPT, PDF, TXT or read online on Scribd
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Market Segmentation and Position

Agenda

 Market Segmentation
 Market Targeting
 Market Positioning
Market Segmentation, Targeting, and Positioning
Identify bases for
segmenting market
Market
Segmentation
Develop profiles of
resulting segments

Develop measures of
segment attractiveness
Market
targeting
Select the
target segment(s)

Develop positioning
for each segment
Market
positioning
Develop marketing mix
for each segment
Figure 7-1
Market Segmentation

 Dividing a market into smaller groups of


buyers with distinct needs, characteristics, or
behaviours, who might require separate
products or marketing mixes
 The key is their response to a different
marketing mix
 If all consumers respond the same way, then
there should be no need to segment a
market
Levels of Market Segmentation
Mass marketing Treats all customers the same

isolating broad segments &


Segment marketing adapting mktg to match 1+ segment

focusing on sub-segments that may


Niche marketing seek a special combination of benefits

tailoring products & mkt programs


Micromarketing to specific individuals & local groups
Micro-Market Segmentation

Local marketing: tailoring Individual marketing:


brands and promotions to tailoring products and
the needs and wants of marketing programs to the
local customer groups- needs and preferences of
cities, neighbourhoods, individual customers
and even specific stores

Mass customization: the process of creating customer-


unique value by designing products and services tailor-
made to individual needs, on a large scale
Market Segmentation Variables

 Geographic: dividing a  Psychographic: dividing a


market into different market into different groups
geographical units, such as based on social class,
national, regional, local, city lifestyle, or personality
size, density of population, characteristics
and climate
 Demographic: dividing the  *Behavioural: dividing a
market into groups based on market into groups based on
purchase occasion, benefits
demographic variables such
sought, user status, usage
as age, sex, family size/ life rate, loyalty status,
cycle, income, occupation, readiness state, and attitude
education, religion, and towards the product
ethnic origin
Geodemographic segmentation uses a combination of geographic,
demographic, and lifestyle characteristics to classify consumers.

Volume/Consumption Segmentation. the division of a market into segments


on the basis of the varying volume of demand for the product by individuals,
groups or types of customers; typically, the segments are ranked to denote
heavy usage, medium usage or light usage. For example, airlines having
‘Frequent Flyer’ are using user rate as the basis of market segmentation.
Generally, marketers are interested in the heavy user group

* Behavioristic Segmentation:
In this method consumers are classified into market segments not the basis of
their knowledge, attitude and use of actual products or product attributes.
(а) Purchase Occasion – business/ vacation. leisure
(b) Benefits Sought - High quality, low price, good taste, speed
Segmenting Business Markets

 Consumer and business marketers use many of the same variables


to segment their markets.
 Business buyers can be segmented geographically or by benefits
sought, user status, usage rate, or loyalty status.
 Additional variables unique to this market would be:
– business customer demographics (industry, company size)
– operating characteristics
– purchasing approaches
– situational factors, and
– personal characteristics.
Effective Segmentation

To be useful, market segments must be:


– Measurable: size, purchasing power, and profile
– Accessible: can be reached and served
– Substantial: large enough to profitably serve
– Differentiable: respond differently to a marketing mix
– Actionable: effective programs can be designed
Segments should be evaluated for:
– Size
– Growth characteristics
– Structural attractiveness
– Compatibility with company objectives and resources
Evaluate Segment Attractiveness
Market Targeting

 Market targeting:  Target market: a set of


– The process of buyers sharing common
evaluating each market needs or characteristics that
segment’s the company decides to
attractiveness, and serve
selecting one or more – May not be the largest
segments to enter segment
– The segment (s) that the
company can most
profitably serve
Targeting Strategies
Selecting Market Segments

Undifferentiated marketing

Company
Market
Marketing Mix

Differentiated marketing (Diff. sale in diff areas)

Company
Segment 1
Marketing Mix 1
Company
Segment 2
Marketing Mix 2
Company
Segment 3
Marketing Mix 3

Concentrated marketing
(Rolls Royce or specialised Designer furniture

Segment 1
Company
Segment 2
Marketing Mix
Segment 3

Figure 7-3
Choosing a Market Coverage Strategy

Depends on:
 Company resources
 Degree of product variability
 Product life cycle stage
 Market viability
 Competitors’ marketing strategies
Market Positioning

 Market positioning:  Product position: the way


– Arranging for a product the product is defined by
to occupy a clear, consumers on important
distinctive, and desirable attributes, relative to
place relative to competing products
competing products, – The “yeh dil maange
– In the minds of target more?”
consumers, – The “uncola?”
– Formulating competitive – “Isko laga dala to life
positioning for a product, jhingalala?”
and creating a detailed – Desh ka Namak
marketing mix
Positioning for Competitive Advantage

 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

 Three Important Steps:


– Identifying a set of possibly competitive advantages upon
which to build a position
– Choosing the right competitive advantages
– Selecting an overall positioning strategy
Choosing a Positioning Strategy

 Differences need to be:


– Important
– Distinctive
– Superior
– Communicable
– Pre-emptive (to prevent attack by disabling the enemy)
– Affordable
– Profitable
 Unique Selling Proposition:
– choosing one attribute and aggressively promoting itself as
being the best on that benefit
 Value Proposition:
– The full mix of benefits on which a product/brand is
positioned
PERCEPTUAL MAPPING
Perceptual mapping / Market mapping is a diagrammatic technique used by
marketers that attempts to visually display the perceptions of customers or
potential customers. The positioning of a brand is influenced by customer
perceptions rather than by those of businesses.

For ex. A business may feel its products are high quality and upmarket
products. But if customers sees it as low quality and downmarket products, it
is their views what will influence sales .

Typically the position of a company's product, product line, or brand is


displayed relative to their competition.

Perceptual maps, also known as market maps, usually have two


dimensions but can be multi-dimensional; they can be used to identify gaps in
the market and potential partners or merger targets as well as to clarify
perceptual problems with a company's product.

So if a business wants to find out where it's brand is positioned in the market,
it might carry out a market research. This will help them to find out how the
customers sees their brand in relation to others in the market
TWO DIMENSIONAL PERCEPTUAL MAPPING
MULTI-DIMENSIONAL PERCEPTUAL MAPPING

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