1. SEGMENTATION, TARGETING AND POSITIONING
CHAPTER-4
SEGMENTATION, TARGETING AND POSITIONING

2. Marketers know that they cannot appeal to all buyers in their markets or at least not to all buyers in the same way. Buyers are too numerous, too widely scattered, and too varied in their needs and buying practices. Therefore many companies today are moving away from mass marketing, instead they practice target marketing.

3. What is Market segmentation
What is Market segmentation? Dividing a market into smaller groups of buyers distinct needs, characteristics, or behavior who might require separate products or marketing mixes.

4. There is no single way to segment a market; a marketer has to try different segmentation variables to find the best way. Here we look at the major variables such as Geographic, Demographic, Psychographic and behavioral.

5. GEOGRAPHIC SEGMENTATION Dividing a market into different geographical units such as nations, states, regions, cities etc. A company may decide to operate in one or a few geographical areas, or to operate in all areas but pay attention to geographical differences in needs and wants.

6. DEMOGRAPHIC SEGMENTATION Dividing the market into groups based on demographic variables such as age, gender, family size, income, occupation, education, religion and nationality. Demographic factors are the most popular bases for segmenting customer groups. One reason is that customer needs, wants and usage rates often vary closely with demographic variables.

7. PSYCHOGRAPHIC SEGMENTATION Dividing a market into different groups based on social class, lifestyle, or personality characteristics. People in the same demographic group can have very different psychographic makeups. The products people buy reflect their lifestyles. As a result marketers often segment their markets by consumer lifestyles and personality characters.

8. BEHAVIORAL SEGMENTATION Dividing a market into groups based on their knowledge, attitudes, uses or responses to a product. Many marketers believe that behavior variables are the best starting point for building market segments.

9. EVALUATING MARKET SEGMENTS In evaluating different market segments, a firm must look at three factors: 1) Segment size and growth opportunity 2) Segment structural attractiveness and 3) Company objectives and resources

10. The firm must collect and analyze data on current segment sales, growth rates and expected profitability for various segments. It will be interested in segments that have the right size and growth characteristics.

11. TARGET MARKETING
What is target marketing? It is the process of identifying market segments, selecting one or more of them and developing products and marketing mixes tailored for each segment. In this way marketers can develop the right product for target market and adjust their prices, distribution channels and advertising to reach the target market efficiently.

12. A target market consists of a set of buyers who share common needs or characteristics that the company decide to serve.
Buyers have unique needs and wants, a seller could potentially view each buyer as a separate target market. However it is difficult, instead they look for broader segments of buyers.

13. Following are the different levels at which the target marketing can be carried out.
UNDIFFERENTIATED MASS MARKETING
A market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer.

14. CONCENTRATED / NICHE MARKETING
A niche market is a focused targetable portion of a market.
When a business is focusing on a niche market, it is addressing a need for a product or service that is not being addressed by mainstream providers. You can think of a niche market as a narrowly defined group of potential customers.

15. MICRO MARKETING/ LOCAL MARKETING OR INDIVIDUAL MARKETING:
Micro marketing is the practice of tailoring products and marketing programs to suit the tastes of specefic individuals and locations. Micro marketing includes local marketing.
Local marketing involves tailoring brands and promotions to the needs and wants of local customer groups.

16. Individual marketing consists of tailoring products and marketing programs to the needs and preferences of individual customers.

17. PRODUCT POSITIONING
A products position is the way the product is defined by consumers based on the important attributes of the product.
The place the product occupies in consumers minds relative to competing products.
Positioning involves implanting the brand’s unique benefits and differentiation in customer’s mind.

18. Consumers position products with or without the help of marketers
Consumers position products with or without the help of marketers. But marketers do not want to leave their products unpositioned. They must plan positions that will give their products the greatest advantage in selected target markets.

19. CHOOSING A POSITION STRATEGY
The positioning task consists of three steps:
Identifying a set of possible competitive advantages
Choosing the right competitive advantage
Selecting an overall positioning strategy.

20. IDENTIFYING POSSIBLE COMPETITIVE ADVANTAGE: The key to winning and keeping target customers is to understand their needs better than competitors and to deliver more value. Competitive advantage is an advantage gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices.

21. CHOOSING THE RIGHT COMPETITIVE ADVANTAGE: Once the company is successful in discovering potential competitive advantages, now it must choose the one on which it will build its positioning strategy. It must decide how many advantages to be promoted or which one to be promoted. Many marketers think that the company should aggressively promote only one advantage to the target market.

22. SELECTING AN OVERALL POSITIONING STRATEGY: The company’s should select an overall positioning strategy because the consumers typically choose products and services that give them the greatest value. Thus marketers should position their brands on the key benefit that they offer relative to competing brands. The full positioning of a brand is called the brand’s Value positioning.

23. TEST YOUR LEARNING Define Market Segmentation.
What are the major variables of market Segmentation?
Name any four Target marketing Strategies.
What is Mass marketing?
Define Niche Marketing.
Define Micro Marketing.
Define Product positioning.
What are the three steps involved in product positioning?