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Segmentation, Targeting
and Positioning
Overview: Segmentation, Targeting & Positioning
• Market Segmentation:

Dividing a market into distinct groups with

distinct needs, characteristics, or behavior who
might require separate products or marketing
mixes.
 Definition
• According to Philip Kotler, “Market
segmentation is the sub-dividing of market
into homogeneous sub-sections of customers,
where any sub-section may conceivably be
selected as a market target to be reached
with a distinct marketing mix.”
Bases for segmentation in consumer
markets

Geographic

Demographic

Psychographic

Behavioralistic
 Segmenting Consumer Market
Demographic Segmentation Geographic
• Age- Group
Segmentation
• Gender • Regions
• Family size • States
• Family life-cycle stage • Urban/Rural
• Income • Climate
• Occupation
• Marital status
• Education Behavioral
Psychographic Segmentation • Occasions
• Social Class • Benefit Sought
• Life-style • User rates
• personality • Loyalty status
 Geographic segmentation

Geographic segmentation tries to divide

markets into different geographical
units:
• Regions
• States
• Urban/Rural
• Climate
 Demographic segmentation
Demographic segmentation consists of dividing the market into
groups based on variables such as:

• Age- Group • Occupation

• Gender • Marital status
• Family size • Education
• Family life-cycle stage
• Income
 Demographic segmentation
• Infants
• Children
• Teenagers
• Young Adults
• Old/ Seniors
1. Age :
• Age is an important factor for segmenting the market. This is
because demand and brand choice of people change with
age.
• On the basis of age, a market can be divided into Infants,
Children, Teenagers Young, Adults, Old/ Seniors
• For consumers of different age groups, different types of
products are produced.
• Johnson and Johnson cater to the needs of children below 6
years by presenting baby powders, baby soaps, oils etc.
 Demographic segmentation
2.Gender: Gender segmentation is widely used in consumer
marketing.
• The wants, tastes, preferences, interests, choices
etc. of men are different from that of women.
• For instance, women are more fond of cosmetics and other
fancy articles.
• Marketers use gender differences for marketing garments,
personal care products, bikes, cosmetics and magazines.

• Male
• Female
 Demographic segmentation
3.Income:
• Many companies target affluent consumers
with luxury goods and convenience
services.
• Lower Income
• Middle Income
• Upper Income
4. Family Life Cycle: It refers to the important stages in
the life of an ordinary family. Broadly divided into the
following stages.
• Stage 1: Childhood.
• Stage 2: Bachelorhood (unmarried).
• Stage 3: Young married couple.
• Stage 4: Parenthood- (a) Couple with children. (b)
Couple with grown up children.
• Stage 5: Post- parenthood- Older married couple with
children living away from Parents (due to job or
marriage of sons and daughters).
• Stage 6: Dissolution- One of the partners is dead.

❑ Wants, tastes, interests, buying habits etc. vary over

different life cycles stages.
5.Family Size:
• A marketer launches different sizes of products in
the market according to size of the family.
• For example, shampoos and oil are available in 100
ml. 200ml. 500ml etc.
6.Education: On the basis of education, market for
books may be divided as high school, plus two,
graduate and post graduate.

7.Occupation: Market segmentation is done also on

the basis of occupation of consumers. For instance,
doctors may demand Surgical equipment, lawyers
may demand coat etc.
8. Income:
• Income segmentation is used for
automobiles, clothing, cosmetics, travel,
financial services etc.
• For example, BMW (car manufacturer
concentrates on high income segment)
 Demographic segmentation
9.Lifestyle:
• Marketers are increasingly interested in the
effect of consumer "lifestyles" on demand.

• There are many different lifestyle

categorization systems, many of them
designed by advertising and marketing
agencies as a way of winning new marketing
clients and campaigns.
 Psychographic Segmentation

1. Social Class :
• On the basis of Social class, consumers may be
grouped into…
1. Lower class
2.Middle class and
3.Upper class
• Social class is determined by income, occupation and
education
 Psychographic Segmentation
2. Personality:
❑ Personality reflects a person’s traits, attitude and habits.
❑ It is in this background that a person is classified as active or
passive, rational or impulsive, creative or conventional,
introvert or extrovert.

Raymond’s advertisement says “Raymond. The

Complete Man”
 Psychographic Segmentation
3. Life Style:
• A person’s life style is the pattern of living as
expressed in the person’s activities, interests and
opinions.
• They express their life styles through the products
they use.
• For example, the life style of a college student is
different from that of an ordinary worker.
• Car, clothing, cosmetics, furniture, bike, smartphone
etc. are segmented by using life style
 Behavioral segmentation
1. Occasion Segmentation:
• According to the occasions, buyers develop a need,
purchase a product or use a product.

• There can be two types of situations- regular and

special. For example, for regular use and special
occasion.
 Behavioral segmentation
2. Benefits Sought
• The major benefit sought in a product is used as the
basis of classify consumers. High quality, low price,
good taste are examples of benefits.

• For example, some air travellers prefer economy

class (low price), while others seek executive class
(status and comfort).
 Behavioral segmentation
3. Loyalty Segmentation:
❑ Consumers have varying degree of loyalty to specific brands.

❑ On the basis of brand loyalty, buyers can be divided into the

following five groups.
(1) Hard-core loyal
(2) Soft-core loyal
(3) Shifting loyal
(4) Switchers
(5) Consumer innovators
 Behavioral segmentation
4. User Rate:
• Potential buyers may be classified as regular users,
occasional users and non-users.

• Marketers can develop new products or new uses of

old products by targeting one or another of these
groups.
 Process of Market Segmentation

Identify the potential of Segment

Determining the differentiation

Analysis of Competition

Assess the Profitability

CHARACTERISTICS OR CRITERIAS OF EFFECTIVE
SEGMENTATION
1. Measurable:
• Market segments are usually measured in terms of
sales value or volume (i.e. the number of customers
within the segment).

• If you are taking Demographical factors like age,

education, income, etc. as variables of segmentation
then it needs to be measurable.
2. Accessible :
• The segment should be such that the product
can reach the segment via distribution
channels and the promotions can reach them
via proper media.
3. Substantial/Size

Substantial refers to the fact that the

market segments are large or profitable
enough to serve.
- Some segments have one or few customers but the
marketers can sell huge volume of their products to
these customers.

- For example: Tomato Ketchup goes to different fast

food shops such as Pizza Hut, KFC etc. in huge
volume rather than individual customers.
8-28
4. Actionable

• Actionable refer to the fact that effective

programs can be designed and
implemented for attracting and serving
the segments.

8-29
5. Differentiable
• Differentiable refers to the fact that the segments
are conceptually distinguishable (separable from
each other) and respond differently to different
marketing mix elements and programs.

- For example: Married and Unmarried women can respond

differently to different products such as Clothes , cosmetics,
household products, etc. Again Consumption of Students and
Executives is quiet different.

8-30
 Target Market
• A target market refers to a group of potential
customers to whom a company wants to sell
its products and services.
• This group also includes specific customers to
whom a company directs its marketing efforts.
• Identifying the target market is an essential
step for any company in the development of
a marketing plan.
Strategies for Reaching Target Markets
1. Undifferentiated marketing/ Mass marketing
– Strategy that focuses on producing a single product and
marketing it to all customers; also called mass marketing.
– For example, toothpaste isn't made specially for one
consumer, and it is sold in huge quantities.
2.Differentiated marketing
– Strategy that focuses on producing several products and
pricing, promoting, and distributing them with different
marketing mixes designed to satisfy smaller segments.
– For example, a business selling organic dog food is looking
to target a specific type of person – a health conscious,
animal loving and eco-friendly individual.

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3. Concentrated Marketing/ Niche Marketing
• Focusing marketing efforts on satisfying a single
market segment; also called niche marketing.
• Approach can appeal to small firms or to firms
that offer highly specialized goods and services.
• For example, the manufacturer of Rolex watches
has chosen to concentrate on the luxury
segment of the watch market.

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4. Micromarketing:
• This is the narrowest approach of targeting. It is most effective
technique for small business users to sustain, build and grow their
own brand. It targets the potential customer at the very basic and
personal level.
• Examples of companies that have run successful micromarketing
campaigns include Procter & Gamble (PG) and Uber.

• Individual-marketing
✓ Adapting products and marketing programs to the needs and
preferences of individual customers-also labeled ‘markets-of-one
marketing’ ,‘one-to-one marketing’
✓ Matrimonial sites are one of the best examples of individual
marketing.

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 Positioning

Positioning is the act of designing

the company’s offering and image to
occupy a distinctive place in the
target market’s mind.
 1. By Product Attributes and Benefits

Strategy consists in associating an object with a

product characteristic or customer benefit.
Examples……
 2. By Price and Quality

Certain product categories where high price is automatically

associated with quality, or where low price is often
considered to be synonymous with inferior quality.

Example:
 3. By Quality
Certain product categories, there is an attempt to position the
product on the basis of High Quality. Quality and price are
somewhere related. High price indicate high quality.
Example:
 4.By Use and Application

Associating the product with a

specific use.

Example….

Used during cold and

Flu…..
 5. By product user

Strategy of associating the product with a particular

type or class of user.
Example….
 6. By product Class

Some brands are portrayed as something different from

existing product category and belonging to some distinct
product category.
Example….
 7. By Competitor

Positioning strategy consists in making consumers think

that your brand is better than, or as good as the
competitors
Example….

Nimbooz…..
Ekdum Asli Indian Ekdum Ghar
Jaisa
 8. By symbols

Positioning strategy consist in identifying something that is

very meaningful to people.

Example….

Maharajah of Air India has become a

world figure

It lays Emphasis on the royal Indian Comfort

 What is product differentiation?

• Product differentiation is simply the

characteristics that define your product and
make it unique to customers.

• You may hear it called the unique selling

proposition or abbreviated as the USP.