Market

segmentation
Targeting and positioning
 demographic

Bases for
behavioral geographic
segmenting

psychographic
 Demographic

 Density of population
 Age
 sex
 Household patterns
 Income level
 Occupation
 Education
 Population categories
 Geographic

 Territory
 Habitat identity
 Population size
 Climate
 Flora and fauna
 Psychographic

 Nationality
 Race
 Social class and clan
 Livelihood systems
 Personality groups
 Influencing cultures
 Behavioral

 Product usage pattern

 Derived products benefit
 User status
 Usage frequency
 Brand loyalty
 State of readiness
 Attitude towards product
 Personal preferences
 Levels of
segmentation

Segment
marketing

Niche
marketing

Local
marketing

Individual
marketing
 Segment marketing
 A group of customers who share a similar
set of needs and wants.
 Marketer’s task is to identify the
segments and decide which ones to
target.
 Marketers can offer flexible market
offerings to its segment, which is of two
types:
1. Naked solution
2. Discretionary options
 Niche marketing
 A niche is a more narrowly defined
customer group seeking a distinctive mix of
benefits.
 The customer has a distinctive set of needs
 They will pay a premium to a firm that best
satisfies them.
 The niche is fairly small but has size, profit,
and growth potential and is unlikely to
attract many other competitors.
 The nicher gains certain economies
through specialization.
 Local marketing
 Target market is leading to marketing
programs tailored to the needs and wants
of local customer groups leading areas,
neighborhoods, even individual stores.
 Local marketing reflects a growing trend
called grassroots marketing.
 Marketing activities concentrate on getting
as close and personally relevant to
individual customers as possible.
 They see national advertising as wasteful
because it is too “arms length” and fails to
address local needs.
 Individual marketing
 The ultimate level of segmentation leads to
“segments of one”, “customized marketing” or
“one-to-one marketing”.
 Customerization combines operationally driven
mass customization with customized marketing in a
way that empowers consumers to design the
product and service offering of their choice.
 Customization is certainly not for every company. It
may be difficult to implement for complex products
such as automobiles.
 Customization can also raise the cost of goods by
more than the consumer is willing to pay.
 industry

Attitude towards
company
risk

segmenting
Business markets

Purchasing
location
criteria

technology
 Market targeting
 Once the firm has identified its market
segmentation opportunities, it must decide
how many and which ones to target.
marketers are increasingly combining
several variables in an effort to identify
smaller, better-defined target groups. This
has lead some market researchers to
advocate a needs-based market segmentation
approach. Roger best proposed the seven-
step approach shown below: -
 Description
 Needs-based segmentation
 Segment identification
 Segment attractiveness
 Segment profitability
 Segment positioning
 Segment “Acid Test”
 Marketing mix strategy
 Effective segment
criteria
 Measurable
 Substantial
 Accessible
 Differentiable
 actionable
 Evaluating and selecting the
market segments
M1 M2 M3

P1
 Single segment
concentration
P2

P3

M1 M2 M3
 Selective
P1
specialization
P2

P3
Contd…
M1 M2 M3
 Product P1
specialization
P2

P3

M1 M2 M3
 Market P1
specialization
P2

P3
Contd…

 Full market coverage

M1 M2 M3

P1

P2

P3
 Brand positioning
 Positioning is the act of designing the
company’s offering and image to occupy a
distinctive place in the minds of the target
markets. The goal is to locate the brand in the
minds of consumers to maximize the potential
benefit to the firm. a good brand positioning
helps guide marketing strategy by clarifying
the brand essence, what goals it helps the
consumer achieve, and how it does so in a
unique way. Everyone in the organization
should understand the brand positioning and
use it as context for making decisions.
Developing and communicating
a positioning strategy
 Competitive frame of reference.
 Points-of-difference an points-of-parity.
 Points-of-difference
 Points-of-parity
 Points-of-parity versus points-of-difference
 Establishing category membership
 Straddle positioning
 Communicating category membership
• announcing category benefits
• Comparing to exemplars
• Relying on the product descriptor
 Choosing POPs and PODs.
 Creating POPs and PODs.