MODULE V NOTES

SEGMENTATION,TARGETING & POSITIONING

Good marketing involves the right marketing mix to targeted customer. Marketing forms the
lucrative customer relationship. The major aim of marketing is to realize value for customers
and create more wealth for organisations. Basically, marketing deals in to recognise and fulfil
human and social needs. Consequently marketing has important role in any firms or business
success. There is systematic way of marketing and the marketing segmentation is the core of
marketing. Segmentation, targeting and positioning notions for a business products and
services are imperative to widen customer base.

A segment is an exceptional group of customers or probable customer who share some

common characteristic that make them dissimilar from other groups. Everyone has the own
view and own choices. It is very important for us to keep a healthy relationship with the
customers and to do this they need to understand their customers' demand. Segmentation is
very valuable tool. But it is essential for marketer to understand each and every sub-group in
order to get the positive result from customers and to compete with competitors in the market.
It is not practicable to go after all customers, because customers have different wants, needs
and tastes. Some customers want to be style leaders. They will always purchase certain styles
and usually pay a high price spent more money for them. Other customers are involved in
bargaining while buying the product. They try to look for items at the lowest price. Clearly, a
company would have difficulty to target such market segments concurrently with one type of
product. For example, a company with premium products would not attract to bargain
customers. Segmentation and targeting comprises of three stage process. Firstly, it is
determined which kinds of customers exist, select which ones are best off trying to serve and
implement segmentation by optimizing products/services for that segment and
communicating that company has made the choice.

Segmentation is process that an organisation adopt to segregate the market into different
groups according to the dissimilar characteristics which might need different products. The
Seller, groups various people into segments on the basis of analogous characteristics, tastes,
perception so that they will have a similar response to a specific product launched specifically
for each segment. Segmentation is an effective way to explore what kinds of consumers with
different needs exist. Market segmentation is the process of dividing whole market into diverse
customer segments. Targeting or target marketing involves in deciding which potential
customer segments the company will focus on. Marketing segmentation always comes before
targeting, which assists a company to be more discerning about who they are marketing their
products to. Marketing segmentation and targeting are similarly vital to ensure huge success of
a company. If we take example of automobile market some consumers needs speed and
performance, while others are concerned about roominess and safety. It can be established
that it is not possible to be all things to all people. Scholars have stated that companies that
concentrate to fulfil the needs of one group of consumers over another tend to be more money
making. The objective of segmentation is to focus on marketing energy and force on
subdividing to compete within the segment. It is parallel to the soldierly principle of
concentration of force to overwhelm energy. Concentration of marketing energy is the core of
all marketing policies and market segmentation is the conceptual device to accomplish this
focus. The seller must try to understand the target market's needs, wants, and demands. For
example, American people need food but wants hamburger, French fries and a soft drink.
Wants are shaped by one's society (Kotler, 2000). Cartwright (2002) stated that need is
something that people cannot do without, but a want is the method by which people would like
the need to be satisfied. Demands are wants for specific products backed by an ability to pay
(Kotler, 2000).

Market segmentation was first proposed in the middle of 1950s by Wendell.R.Smith, an

American professor of marketing. According to theorists, "Market segmentation is to divide a
market into smaller groups of buyers with distinct needs, characteristics, or behaviours who
might require separate products or marketing mixes" (Charles W. Lamb 2003).

Requirement for Market Segmentation

The market segmentation is intended to increase competency, sales volume and profit ability of
the organization. To get success, the following requirement should be fulfilled.

Measurable: Segmentation of market is operational only when the information on the buyer's
need and characteristics are measurable. Customer response based on quantifiable information
is simply measureable. Otherwise marketing program cannot be articulated and implemented.

Accessible: the market segment should be accessible through exciting marketing institutions
such as middlemen, advertising media, company sales forces- with a minimum of cost and
wasted efforts.
Profitable: Each segment should be big to be lucrative. It must be able to create enough
demand for the company's product. It should attract the targeted customers scattered into
different parts of the world.

Stable: Market segmentation should be adequately stable over a time period to cover the
investment made in segmentation.

Heterogeneous needs and characteristics: The effective segmentation of marketing requires

different in buyer's characteristics. Differentiation in product needs and buyers' characteristics
help the organization for market segmentation to divide total market.

Numerous studies have described segmentation as the process of dividing the market into
groups of customers or consumers with similar needs. The more thoroughly the needs match
up, the smaller the segment tends to be, but the higher the best customers are expected to be
prepared to pay to have a product that more exactly meets their needs (Blythe, 2003).
Segmentation allows marketers to recognize different groups of customers whose behaviours
significantly differ from others. This enables companies to modify their marketing mix, to
furnish to particular needs of different market studies (Kotler, Armstrong, Saunders, & Wong,
2002).

There are numerous segmentation that include Geographic segmentation, population density
or climate, demographic segmentation that is markets segmented by age, sex, size and family
type, psychographic segmentation like markets segmented by life-style variables and
behavioural segmentation such as markets segmented by purchase occasion, benefits sought,
user status. These four segmentation will depend on many factors such as "the type of product,
the nature of demand, the method of distribution, the media available for market
communication, and the motivation of the buyers" (Chisnall 1985).

Geographic segmentation is a marketing strategy that divide segment according to geographic

region such as nations, states, regions, counties, cities, or neighbourhoods. Marketers will
modify marketing programs to fit the needs of individual geographic areas, localizing the
products, advertising, and sales effort to geographic differences in needs and wants. Marketers
will thoroughly study the population density or regional climate as factors of geographic
segmentation.

Demographic variables are basically a personal statistics such as income, gender, education,
location (rural vs. urban, East vs. West), ethnicity, and family size. Some consumers want to be
seen as similar to others, while a different segment wants to stand apart from the crowd.
Fundamentally, demographic segmentation Involves dividing the market on the basis of
statistical differences in personal characteristics, such as age, gender, race, income, life stage,
occupation, and education level (Anon 2002). Marketers can focus on customers' age because
user needs and wants vary with their age although they still want to learn the same types of
courses. In order to familiarise the new ideas in market, it is significant to look at the design of
the courses and what will be the learning outcomes to meet the user demands of different age
group. Income is another popular basis of segmentation. Customers will be more attractive
towards the less cost. We need to understand this point that in marketing the courses that
appeal directly to the customer is relatively low prices.

Another variable for segmentation is behaviour. According to Lancaster and Reynolds,

behavioural segmentation is based on actual customer's' behaviour' towards products. It has
the advantages of using variables that are closely related to the product itself. Such as brand
loyalty, benefits sought, occasions like holidays, events which stimulate point for marketing.
Lancaster & Reynolds stated that the customers can be divided into number of groups
according to their loyalty, or their propensity to repurchase brand again is called brand loyalty.
Some consumers are fond of brand such as they tend to stick with their favoured brands even
when a competing product is on sale. Some consumers are "heavy" users while others are
"light" users.

There are many forms of Behavioural segmentation. Buying on occasions is the first form of
behavioural segmentation. Products such as chocolates and premium foods will get selling on
festivals. Similarly, confectioneries will get selling when there is a party. Thus these products
are generally targeted by behavioural segmentation. Good example of targeting buying on
occasions is Hallmark greeting cards for all occasions. The primary targeting of symbol was that
be it any occasion, you will find the right kind of card for you. Thus you have the perfect option
to express yourself. Benefits sought are another form. Several products are targeted towards
the benefits sought by the customer. Loyalty is also type of behaviour segmentation. There are
two ways to grow a business. First is to acquire new customers and second is to retain your
existing customers. The more loyal customer is to marketer, the more customer base will
increase. That's one more kind of behaviour which marketers target. The strategy for brand
loyal customers is very different from that used for acquiring new customers. The example of
behavioural segmentation by loyalty is observed in the hospitality segment wherein airlines,
hotels, restaurants and others give their best to provide the best service possible such that they
can retain their customer.

The hospitality sector is the one with the best loyalty programs ever. Thus the loyalty of the
customer can also be used for behavioural segmentation. In Usage rate type, the usage can be
demonstrated in the form of heavy usage, moderate usage or lesser usage. Another example of
usage rate segmentations is in the electronics as well as the FMCG industry in industrial buying.
FMCG and electronics works on the basis of a channel with dealers and distributors. In these
segments, the maximum discount goes to the one who buys the maximum whereas others get
lesser profits as they also get lesser discounts.

Psychographic segmentation is based on the notion that the types of products and brands an
individual purchases will replicate that person' personality and patterns of living. It promotes
the product using celebrities, such as football team in order to create a big image in front of
users. Everyone has different life style, they have their own opinions but it could be influenced
by other people personalities. This is benefit for us because for example, if David Becham is
learning the team building strategies from our institute then the user influencing his fans to join
in the same course.

Marketers can also segment on benefits sought, essentially bypassing demographic explanatory
variables. Such as, some consumers prefer scented soap and a segment likely to be attracted to
brands such as Irish Spring, while others choose the unscented soap. The premium customers
are prepared to pay to have a product that more exactly meets their needs (Blythe, 2003).

Process of Market Segmentation

Market segmentation is implemented into many phases.

Survey: Market segmentation originally starts in the market survey. The market survey is
usually in a large scale and this is an expensive part. This survey is conducted to recognize the
need of the market and to study the characteristics of market. In survey product attributes
desired by customers, brand awareness, product usage pattern, demographics features (sex,
age, income, family, size) psychographics (consumer's personality, buying oriented and media
graphic (news, radio, and TV programmers) are studied.

Analysis: After conducting survey, all information has to be tabulated and analysed. Marketers
must have to use two tools to analyse the information. They are factor analysis and cluster
analysing. Factor analysis is used to isolate highly correlated variables and cluster analysis in
used to locate homogeneous clusters of needs and character factor.
Profiling: In this stage all the identified clusters are profiled about attitude, age, sex, need,
personality, behaviour, psychographics, and demographics. It involves identifying similarities
and dissimilarities among the clusters of demand for the product.

Evaluate market segment and selection of target market: In this stage the marketer has to
foresee demand for each component and has to analyse competitive position of the company.
Prediction of segment size and assessment in potential corporate goals are included in it.
Through segment evaluation, company can enter into more than one segment and it can also
adopt separate marketing program for each of the target markets.

Development of positioning strategy and establishing a marketing plan: After the selection of
market segment, it must be positioning for its own product for making target market more
accessible and company should develop overall marketing plan about product, distribution,
price and promotion.

Benefits of Market Segmentation

Organizations make best efforts to ensure that their marketing has positive impact on
consumers. In tough competition environment, it is difficult for a mass marketing strategy to
succeed. Customers are becoming more diversified and firms are continually differentiating
their products relative to competitors. When the focus is on segmented markets, the
company's marketing can better match the needs of that group. Market segmentation enables
organizations to focus their resources more efficiently and get success in business. Marketing,
product and brand managers are constantly being asked to increase their return on investment.
They are looking for new information about their markets, and new ways to approach them.
Market segmentation focuses on that subdivision of prospects that have the utmost potential
of becoming customers and generating income. Companies who segment their markets match
their strengths and offerings to the groups of customers most likely to respond to them. The
objective of market segmentation is to produce a commercial advantage. Once a commercial
advantage is obtained, marketing decisions become considerably safer and more powerful.
Through segmentation, marketers can apply more specific characterizations to each group, as
each group no longer encompasses the entire market. Psychographic segmentation offers good
understanding into the consumer as a person, which is more likely lead to the identification of
underlying needs and motives. As a result, psychographic segmentation should deliver a much
better understanding of the consumer, which in turn should create more valid and responsive
segments and subsequent marketing programs. Segmenting by demographics is easy for
everybody to understand, from management, to sales and customer service staff. It can be
more easily built into an internal marketing plan. There are many factors which can be
responsible for market segmentation. Amandeep singh (2011) have shown in study that earlier
demographic factors were considered for segmentation but they are no longer operative for
segmentation in FMCG sector.

Challenges of Market Segmentation

Currently, market segmentation has emerged as the vital source for growing a business. But
there are numerous issues challenging market segmentation. Transforming the needs of market
segments into financial services, product features, and delivery channels is a major challenge.
Financial service offers need to assess their own capacity and strategic objectives to discover
the appropriate balance between developing products that meet universal needs versus serving
the distinct needs of specific segments, and individuals.

Targeting

When segmentation process is completed on the different groups and classes, Organizations
will have to select targets. Target market comprises of set of buyers who share common needs
or behaviour characteristics that company decides to serve. Kotler visualized targeting is the
best way to approach marketing problems, the "framework for strategic success in the
marketplace" (Kotler 1991). It is established that there is no single strategy that can suit all
consumer groups. Therefore it is necessary to develop specific strategies for target markets.
Targeting evaluates the desirability of each segment of its buying power, size, growth of the
market, competitiveness. Defending a target market requires market segmentation, "the
process of pulling apart the entire market as a whole and separating it into manageable,
disparate units based on demographics". After that marketers choose or come up with a
particular strategy or a product itself for each targeted segment. Target marketing makes the
promotion, pricing and distribution of the products or services in a particular segment. Target
marketing offers a focus to all marketing operations. Theoretical literature denoted that Market
targeting helps businesses come up with tailor made products and marketing campaigns to
address the needs of the different market groups, but companies need to factor in the current
market environment, buyer preferences, competitor actions etc. to launch their targeting plan.

Market targeting is associated with choosing one's target market. A business must go through
following step-by-step approach: Evaluate market segments. Companies must realize the
segment size, growth pattern, segment attractiveness, competitors operating in that segment
and company objectives. Marketers need to choose whether or not the segment has the ability
to offer a long-term appeal and basis for development.

Selecting target market segments: A business can either target the buyers largely or in
narrowly. Based on this perception, marketers can create mass marketing strategies,
differentiated, concentrated or micromarketing strategies.

Choosing a Targeting Strategy: As per product life cycle stage, company resources, market
variability, competitor's strategies, and business can select targeting strategy. In competitive
business environment, companies must see to it that they involve the consumers in all phases
of product development and buying process. It is important to reach out to them and know
their preferences before adopting a targeting strategy.

Socially responsible market targeting: While formulating a market targeting plan, it is important
to ensure that it is parallel with the social and legal policies and sensitivity of the markets.

There are three general strategies to choose target markets:

Undifferentiated Targeting: This approach refers to the market as one group with no individual
segments, therefore using a single marketing strategy. This strategy may be beneficial for a
business or product with little competition where you may not need to tailor strategies for
different preferences. Mass/undifferentiated marketing is concerned with selling a single
product to the whole market. This strategy is based on the statement that, in respect to the
product in question, customers' needs are very similar if not identical. The advantage for the
company is that it can produce on a large scale, benefiting from low unit production costs via
economies of scale. These lower costs can be passed on to the consumer in the form of lower
prices. The limitation of mass marketing is that consumers are less interested in standardised
products and often willing to pay best prices for products that provide for their specific needs.

Concentrated Targeting: This approach involves in selecting a particular market place on which
marketing efforts are targeted. Company focuses on a single segment so you can concentrate
on understanding the needs and wants of that particular market intimately. Small companies
benefit from this strategy as focusing on one segment enables them to compete effectively
against larger firms. Niche/concentration marketing is associated with targeting one particular,
well-defined group of customers (a niche) within the overall market. Niche markets can be
targeted successfully by small firms who have comparatively small overheads and, therefore, do
not need to accomplish the volume of sales required by big competitors. The major drawback
of niche markets are that the potential for sales growth and economies of scale may be limited,
and company survival may be affected if sales decline.

Multi-Segment Targeting: This approach is used when marketers need to focus on two or more
well defined market segments and want to develop different strategies for them. Multi
segment targeting offers many benefits but can be expensive as it involves greater input from
management, increased market research and increased promotional strategies.

Differentiated/selective marketing is related with targeting each segment with a product with
its own marketing mix designed to match the needs of the consumers within the segment.

Customized marketing: In some markets, the requirements of individual customers are

exclusive and their purchasing power is more to make designing a separate marketing mix for
each customer a viable option. Many service providers such as advertising, marketing research
firms, architects and solicitors vary their offerings on a customer to customer basis. Before
choosing a particular targeting strategy, marketers must do cost benefit analysis between all
available strategies and determine which will suit your situation best.

Process of Choosing Target Market

It must ensure that target market is not identical to segmentation. Segmentation is the first
step of the target market. Target market has different basis of segmentation. It is necessary to
analyse each segment as a separate marketing opportunity and constantly evaluate the worth
of each segment. Marketers must estimate whether the segment is Distinguishable,
Measurable, Sizable, Accessible, Growing, Profitable, compatible with the firm's resources,
check if the firm has the differential advantage and distinctive capability for serving the
selected segments. Finally, they must choose those segments which are the most appropriate
for the company.

There are various factors that must be considered while target market selection: Target
marketing adapts a marketing mix for one or more segments recognized by market
segmentation. Target marketing contrasts with mass marketing, which provides a single
product to the entire market. Two important factors to consider when choosing a target market
segment that include attractiveness of the segment and the fit between the segment and the
firm's segment and the firm's objectives, resources, and capabilities objectives.

Attractiveness of a Market Segment

Some aspects should be considered when evaluating the attractiveness of a market segment
such as size of the segment (number of customers and/or number of units), growth rate of the
segment, competition in the segment, and brand loyalty of existing customers in the segment,
attainable market share given to promotional budget and competitors' expenditures,
expenditure, required market share to break even, sales potential for the firm in the segment,
expected profit margins in the segment.

Incorrect targeting strategy results of wrong targeting strategy: Ineffective increase and
targeting led to improper product offers, unsuitable marketing appeals, wrong pricing, and
overemphasis on the brand name. It is stated that none of the company can offer single
product to satisfy the entire segment. Naturally, the firms were incapable to gather worthwhile
information. As the firm did not target those segments and as they become unsuccessful to
make product offers that were suitable for them, the end result may be poor. Market targeting
assists businesses arise with tailor made products and marketing campaigns to fulfil the needs
of the different market groups.

Benefit of Target Marketing

Target marketing induces huge benefit as it offers right products. A product manager, who
properly targets his customers, knows their age range. Manager focuses on products that meet
their needs, solve their problems or help them in some way. Companies that target their
customers in marketing are also more informed about the prices customers will pay for
products and services. Savvy marketers recognize the average income of their primary
customers. They have a general idea whether their customers are price sensitive or not.
Company who define its target market is more precise in marketing and advertising efforts. Its
ideal customer dictates what strategies and tactics, company uses to reach them.

To sum up, Segmentation and targeting is precious tool for companies to increase market
share. Market segmentation is a term that is related with the policy that assesses the national
lease market as heterogonous in characteristics given divergence in demands. According to
Jobber, segmentation is the identification of individuals or organisations with similar
characteristics that have significant implications for the determination of marketing strategy.
Thus, it supports that these divergent demands be classified into smaller homogeneous market
responses that distinguish products and target markets in segments. Market targeting assists
businesses come up with tailor-made products and marketing campaigns to address the
requirements of the different market groups.

Companies must focus on the current market environment, buyer preferences, and competitor
actions to launch their targeting strategy. Target marketing means to choose a market segment
and direct marketing efforts toward that segment. The ideologies of target marketing are to
recognize the major market segments, target one or more of these segments, and alter the
marketing effort towards each particular segment. Strategies of segmentation and targeting
allow the marketer to deliver a product within the target audience needs and wants (Pickton
and Broderick, 2005: 373). It is a necessity to establish the needs and values of the target
customers within each segment, in order for companies to promote their products, brands or
services appropriately.Both have huge importance in marketing.

Positioning and differentiating the market offering

Differentiation and positioning considerations are significant components of the marketing
which makes company's product and services unique in competitive market place.
Differentiation is used when describing the individual product and positioning while explaining
the brand, but both expressions basically represent rising above competition by highlighting the
characteristic features of company product or brand. Theorist, Tan stated that differentiating
and positioning strategy for the market offering is a new stage for a marketing plan after the
concept of consumer orientation-marketing plan (2000). Other researchers affirmed that
Differentiation and positioning are closely related strategies and employed with alignment of
each other.

Differentiation: In differentiation, the attempt is to endow the product offer with certain
distinct qualities which in turn offer some special value to customer. Companies attempt to
bring about differentiation in their products to give better value to their consumers. Marketers
try to stress aspects of product differentiation to guarantee that customers see their product as
different from their competitors' products. Marketers use goods, services, delivery channels
and positioning strategies to discriminate their products. Differentiation can be based on
differences in quality, features, style, price, or can be even based on the image of the product in
the mind of the customer. Kotler describes differentiation as the process Differentiation is the
process of adding a set of meaningful and valued differences to differentiate the company's
offering from competitors offering. There are a number of differentiation dimensions and
strategies for their achievement.

Differential Tools include

Product: Form, Feature, Performance, conformance, Durability, Reliability, Reparability, Style

and Design. Product differentiation concentrates on the elements of a product that makes it
dissimilar from the competing brands. A product can be distinguished on the basis of its
physical form, features and product quality, apart from its other characteristics such as price.
The physical form of the product includes its size and shape. Product features are the
characteristics that allow a product to execute certain functions. Company can make its
products different by adding or removing certain features. Product quality denotes to the
overall characteristics that facilitate the product to perform according to the anticipations of
customers and satisfy their needs.
Services: Customer service can be improved by 24-hour customer feedback through e-mail and
the ability to respond more quickly to customer concerns. Home delivery of groceries, online
banking, and securities trading are becoming increasingly popular. Currently such services
supplement traditional services, but may someday replace them.

Personnel differentiation: In personal differentiation, the internet allows companies to deliver

products more efficiently. There is a Low-cost channels, automated processes, reduced
dependence on personnel and lower transaction cost.

Channel: In this strategy, the internet is a location-free, time-free distribution and

communication channel. There are functions as a communication channel for companies that
provide product or service information online. The internet serves as a transaction and
distribution channel for companies that conduct online commercial transactions. The internet
becomes the entire distribution channel for digital products.

Image: It includes symbols, Events and Sponsorships. In image differentiation, company can
distinguish itself by creating exceptional experience online, called "experience branding".
Through experience branding firms can better retain customers, target key segments, and
enhance profitability. Build-a-Bear extends its offline experience online. Some Web sites invite
users to upload content and comments, which gives them a competitive edge.

Differential Variables

Many times, marketers face problems to differentiate on the basis of the product alone.
Therefore, marketers initiate differentiation based on services offered with the product. These
services include ease of order, delivery, installation, financial arrangements, customer training,
warranties, repair services, maintenance and disposal of the product. Companies invest huge
amount of money annually to train their employees. Training employees assist them serve the
customer better and this can facilitate the firm in creating a difference in customer experience.

Differentiation Strategies
Trout and Rivkin recommend particular differentiation strategies common to offline and online
businesses:

 Being the first to enter the market.

 Owning a product attribute in the mind of the consumer.
 Demonstrating product leadership.
 Utilizing an impressive company history or heritage.
 Supporting and demonstrating the differentiating idea.
 Communicating the difference.

There are numerous differentiation strategies distinctive to online businesses:

 Site Environment/Atmospherics: Easy downloads, accurate and clear information, easy

navigation.
 Build Trust: Strong brand recognition. Privacy policy. Safe and encrypted payment
process for transactions.
 Efficient and Timely Order Processing.
 Pricing: In the early days of the Web, companies offered discounts as purchase
incentives. Majority of firms today differentiate themselves in other ways besides
pricing.
 Customer Relationship Management: Managing long-term relationships with customers.
Invite User-generated Content. The key is to trust customers, listen, respond, and learn.

Company can accomplish a dissimilar differentiation for its products through sufficient
distribution channels and on the basis of its recognition. Image is the way in which people
observe a company and its products. An effective image establishes the product's character and
value positions. Companies use different tools like symbols, events, print and mass media, and
communication channels to communicate the image of the product to customers.

There are five market differential strategies: A new technology offer adequate for
differentiation in market. In current marketplace, differentiating based on healthy relationship
with customers is powerful.

Positioning and Differentiating

Positioning:
Positioning is the procedure of developing the company's offering and image to gain unique
place among the target market. The objective is to discover the brand in the mind of consumers
to exploit the potential benefit to the firm (Kotler and Keller, 2009). Successful formation of a
customer-focused value proposition is the result of positioning, a forceful reason to purchase
the product. Positioning requires the similarities and differences between brands be defined
and communicated. Kerin et al. (2009) recommend two approach for positioning a product in
the market. "Head-to-head positioning" involves directly competing with competitors on a
similar product attributes in the same market and "Differentiation positioning" involves seeking
less competitive, smaller market niche in which to locate a brand. The most important
component that communicates the differences between one product and another is the brand,
besides that, three other important bases are product descriptors, customer support services
and image. Products can also be distinguished on the basis of positioning. A product's position
is the customer's observation about the product's characteristics in relation to the attributes of
competing brands. Product positioning is the process that marketers use to decide the best way
to communicate the qualities of their products to their target customers which is based on
customer requirements, competitive pressures, available communication channels and
cautiously crafted main messages. Successful product positioning makes sure that marketing
messages reverberate with target consumers and force them to take action. Product
positioning becomes a normal selection when company indulges in market segmentation. A
company should develop a unique selling proposition (USP) for each of its brands.

Several factors affect firm's decision regarding which positioning base it must use. Figure below
provide four step processes that can be used in positioning of firm's product.

Positioning process

Market Offering

Positioning is the process of creating a desired image for a company and its products in the
minds of a chosen user segment. Theoretical studies have been conducted by several
researchers. Ries and Trout (1986) differentiate from marketing theories and asserted that
positioning is not what is done to a product. Positioning is what you do to the mind of the
prospect. Positioning starts with a product. Kotler (2006) describes positioning as the act of
designing the company's offer so that it occupies a different and valued place in the target
customers mind. Scholars Kotler, Armstrong (2006) confirm that market positioning is arranging
for a product to occupy a clear, distinctive, and desirable place, in the minds of target
consumers, relative to competing products. Thus, marketers plan positions that distinguish
their products from competing products and give them the greatest strategic advantage in their
target markets. The objective of positioning is to create a unique and positive image on target
customers.

Product Positioning Steps

In other words, Positioning is developing a specific marketing mix to influence consumer's

overall perception of a brand, product line, or organization in general (Lamb, Hair, McDaniel
2004).

The e-marketer's aim is to make a position on one or more bases that are appropriate and
important to the consumer. Companies can position brands, the company, the CEO, or
individual products. Company has three main options while designing its Positioning strategy.

1. Positioning product against competitors,

2. Emphasizing a distinctive unique benefit and
3. Affiliating product with something the customer knows and values.

Positioning is a challenging job for marketers and mistakes in positioning can obstruct the
reliability of the company and lead to a loss of the product's image in the market. Therefore,
marketers must have to be very cautious while positioning their products. Major positioning
errors that can occur include under-positioning, over-positioning, doubtful positioning and
confused positioning. Once a company has created a position for the product or service in the
mind of the customer, it must converse it successfully to its consumers.

Strategies of Positioning

 Product or service attribute

 Technology positioning
 Benefit positioning
 User category
 Competitor positioning
 Integrator positioning

To summarize, Differentiation and positioning are vital for company's productivity. If

organization does not distinguish its offerings and position them clearly in consumer's mind,
then it must compete only on a price basis. The Differentiation strategy is where a company
decides to select a certain characteristic of the product to focus on. Positioning plays significant
role when reaching the desired place in the mind-sets of potential and active consumers.
Academicians designated that a differentiated marketing strategy can develop brand loyalty
resulting in a high rate of repeat purchases because it fulfil needs of each consumer segment. It
can also help a new brand to gain traction in a saturated market. But differentiated marketing
strategy may not be cost-effective for small manufacturers, as conducting the suitable market
research and developing several brands at the same time can be costly. Positioning is the
process by which a brand is marketed with the aim of owning a meaningful and differentiated
idea in the mind of the target. Basically, Positioning strategy describes the procedures, tools
and strategies used by a business to differentiate itself from competitors and gain market
share. In an ultra-competitive market, positioning strategy is often the difference between
failure and success. Product positioning engages creating an exceptional, reliable, and
recognized customer perception about a firm's offering and image. A product or service may be
positioned on the basis of thoughts or benefit, use or application, user, class, price, or level of
quality. It targets a product for particular market segments and product requirements at
accurate prices.