Chapter Outline

DPM20033
4.2 Explain targeting
Fundamentals of 4.2.1 Define market targeting
4.1 Explain segmentation 4.2.2 Describe the segment
Marketing 4.1.1 Define market segmentation evaluation
4.1.2 Identify the major bases for a. Segment size and growth
segmenting consumer market b. Segment attractiveness
Chapter 4 : Market a. Geographic segmentation c. Company objectives and resources
Segmentation, b. Demographic segmentation
Targeting and c. Psychographic segmentation 4.3 Explain positioning
d. Behavioral segmentation 4.3.1 Define market positioning
Positioning 4.3.2 Identify differentiation and
positioning strategy

STP Marketing Model Define Market Segmentation

• Dividing a market into smaller groups of
buyers on the basis of needs,
S T P characteristics or behavior who might
require separate products or marketing
mixes.
• In a simple words segmentation means
SEGMENTATION TARGETING POSITIONING divide the total market into smaller
Dividing the Determine Placed a product segments that share similar
market into which customer occupies in
smaller group(segment) consumers’ characteristics.
segments that to focus on. minds relative to
share similar competing
characteristics. products.
 Bases/Variables For
Segmenting Consumer 1. Geographic
Market
• Dividing a market into different geographical units. Such
as nation, states, regions, counties, cities ,population
density or even neighborhood.
• A company may decide to operate in one or few
geographical areas or operate in all areas but pay
attention to geographical differences in needs and wants.
1. Geographic 2. Demographic 3.Psychographic 4.Behavioral • For example, national newspapers are published and
nation, states, age, gender, family lifestyle ,social knowledge, distributed to different cities in different languages to
regions, counties, life cycle, income, status and attitude, use or
cities ,population occupation and personality response to a cater to the needs of the consumers.
density or even
neighborhood
religion characteristics. product
• KFC also has a localized menu that caters directly to
unique local tastes and preferences. E.g KFC hot & spicy,
KFC tom yum crunch for ASEAN.

2. Demographic 3.Psychographic

• Dividing the market into groups based on lifestyle, social status

• Dividing the market into groups based on demographic and personality characteristics.
variables such as age, gender, family life cycle, income, • People in the same demographic group can have very different
occupation and religion. psychographic characteristics.
• Demographic market segmentation variables are the most • Personality refers to a person’s individual character traits,
popular bases for consumer market segmentation. attitudes and habits.
• Consumer needs, wants and usage rate soften closely with • Lifestyle the manner in which people live and spend their time
demographic variables. and money
• Demographic variables are rather easy to measure in contrast • Segments the markets into groups on the basis of activities,
interests, beliefs and opinions.
to many others.
• E.g – Panera caters to healthy-eating lifestyle segment of
• Age is one of the most common demographic variables used to people.
segment markets. Some companies offer different products, or • E.g - NIKE also targeting not just the youth but also adults and
use different marketing approaches for different age groups older individuals who are keen on staying active.
• For example clothes for babies, teenagers, and older adults.
 4.Behavioral Define market targeting

• Dividing the market into groups based on consumer • The process of evaluating each market
knowledge, attitude, use or response to a product. segment’s attractiveness and selecting
• Behavior variables : one or more segments to enter.
a) occasion (occasions that move a consumer to buy or use
something, eg: kurma – Ramadhan , orange -Chinese New
Year) • Target market is a set of buyers who
b) benefits sought (benefit consumer seek, diff. people seek
diff. benefits) share common needs or characteristics
c) user status (1 st time user, regular user, non user, ex-user) that a company decides to serve.
d) usage rate (light, medium, heavy product user)
e) loyalty status (completely loyal, somewhat loyal, no
loyalty)

Segment size and growth

Describe The Segment • The first criteria is the size and growth of the market
Evaluation segment.
• You want to estimate how many customers are in the
segment, how much they spend, and how fast they
Company are growing.
Segment size Segment
objectives • This will help you assess the current and future
and growth attractiveness
and resources revenue potential of the segment, as well as the level
of competition and saturation.
 Company objectives and
Segment attractiveness
resources

• A larger market segment is more attractive than a • Even if a segment has the right size and growth and
small one, basically because a larger market segment is structurally attractive, the company must consider
offers more potential customers and more potential its own objectives and resources.
conversions for a company.
• The available resources should have the capability of
• A segment is less attractive if it already contains catering to the need of the target market segment.
many strong and aggressive competitors. products
• For example , smaller company could lack the skills
may limit prices and the profits that can be earned in
and resources necessary to serve a large segment.
a segment.
• The relative power of buyers also affects segment
attractiveness.

Target Market Strategies Define market positioning

• Market positioning is a strategy placed a

product occupies in consumers’ minds
relative to competing products.
• It involves perceptions, impressions and
feelings that customers should have for
the product in comparison to competing
products.
 • Once a company has decided which Differentiation Strategies
segments to enter, marketers must For Positioning
decide which comparative advantage • Product Differentiation
they will focus on. • Differentiation in the physical product takes place in different
ways such as features, performance, style or design.
• This step is called the positioning and
differentiation strategy. A product’s • Service Differentiation
position is the way the product is • When the physical product cannot be easily differentiated,
defined by the consumers. success often lies in adding more value- adding services and
improving their quality. Service differentiation through speedy,
• To be relevant, a product or a brand convenience such as training, installation, and ease of ordering
must be easily differentiated from its
• Personnel Differentiation
competitors, mostly through its
• This can be done by hiring and training better people than
comparative advantages. competitors do. Better-trained people exhibit some
characteristics. These are: competence, courtesy, credibility,
reliability, and responsiveness.

Differentiation strategies for Positioning Strategies

positioning
• Image Differentiation
• Buyers may respond differentially to the company image
or brand image by symbols, logo, color or events it
sponsors. E.g. Apple`s bite mark logo, provide strong
brand recognition and differentiation.

• Channel Differentiation
• Channels of distribution can also be an effective means of
differentiation. Distribution can provide coverage or
availability, immediate access to expertise, and greater
ease of ordering, and higher levels of customer or
technical service.
 Positioning strategies
a) MORE FOR MORE
• Providing most upscale product or service and charging higher price.
• Offers high quality and give prestige to the buyer.
• Symbolized status and a loftier lifestyle.
• E.g Starbucks coffee, Mercedes automobile.
b) MORE FOR THE SAME
•
•
Company can attack competitors by positioning its brand as offering more fore the same price.
E.g Target position itself as the upscale discounter with ‘expect more pay less’ tagline.
THE END
c) MORE FOR LESS
•
•
Winning value proposition
Company offer the best product selection, best service, lowest price
THANK YOU
• E.g Home Depot
d) THE SAME FOR LESS
• Powerful value proposition
• Offering same product/brand at deep discount.
• Such as Walmart and Cotsco.
e) LESS FOR MUCH LESS
• Meeting consumers lower performance or quality requirement at a much lower price
• E.g ALDI grocery stores customer pay super low prices but company provide less selection and service, brings
their own shopping bag and pack their own groceries.