MARKET SEGMENTATION, TARGETING AND POSITIONING

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MARKET SEGMENTATION,TARGETING AND POSITIONING
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MARKET SEGMENTATION
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MARKET SEGMENTATIONLearning objectivesAt the
end of this lesson, you should be able to
understand the following

• What is market segmentation
• The reasons for segmenting the market
• The bases for segmenting the market.
• The importance of segmenting the market.
• The criteria for segmenting the market.
• Segmentation variables in consumer and
  organisational markets.
• The importance of segmenting the market
• How companies identify attractive market segments
  and choose a market coverage strategy.

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MARKET SEGMENTATIONDefinition

• What is market segmentation?
• Market segmentation is the process of identifying
  and
• classifying customers according to their
  different needs
• and wants.
• Market segmentation means dividing a market into
  distinct groups of buyers with different needs,
  characteristics or behaviour, who might require
  separate products or marketing mixes.

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Marketing Fundamentals- MARKET SEGMENTATION.
Definition continues

• It is the division of market in to distinct
  groups of customers and using the marketing mix
  to target customers in these groups.
• It is the splitting up of customers in to
  segments and using the marketing mix to target
  customers.

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SIX STEPS IN MARKET SEGMENTATION, TARGETING AND
POSITIONING

• Identify bases for
• Segmenting the market
• 2. Develop profiles of
• Resulting segments

3. Develop measures Of segment attractiveness 4.
Select the target Segment (s)
5. Develop positioning For each target
segment 6. Develop marketing mix For each target
segment.
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LEVELS OF MARKET SEGMENTATION

• Mass marketing Using almost the same product,
  promotion and distribution for all consumers.
• Segmenting markets/ segment marketing Adapting a
  companys offerings so they more closely match
  the needs of one or more segments.
• Niche marketing Adapting a companys offerings
  to more closely match the needs of one or more
  sub segments where there is often little
  competition.
• Micromarketing A form of target marketing in
  which companies tailor their marketing programmes
  to the needs and wants of narrowly defined
  geographic, demographic, psychographic or
  behavioural segments
• Examples of Micromarketing Local marketing and
  individual marketing.

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Marketing fundamentals- MARKET SEGMENTATIONREASO
NS FOR SEGMENTING THE MARKET

• Because of differences that exist among customers
  with regards to the following
• Age
  Psychology
• Sex Life
  cycle
• Marital status Life style.
• Behaviour Location
• Income
• Culture
• Social status
• Inadequate resources to mass market (satisfy the
  whole market).
• Marketing Fundamentals

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Marketing fundamentals- MARKET SEGMENTATIONTHE
CRITERIA FOR SEGMENTING THE MARKET

• Identifiable You must first of all identify the
  segment you want to target. It may be children,
  the young or older population or you may decide
  to target just the male or female population
  What is important is the marketer should identify
  the market segment.
• Profitable The segment should be profitable.
  This means that only those segments which the
  business can get more profit should be targeted.
  The segment targeted should be able to raise
  money for the organisation.
• Recognisable The marketer should be able to
  recognise the segment and its needs. The segment
  should also recognise the fact that they have
  been segmented.
• Accessible The business should be able to get
  access to the particular market segment. Goods
  and services should reach the segment targeted.
  The segment should be able to get the products of
  the organisation. Promotion and advertisement
  should be able to reach the segment. If the
  marketer cannot get access to the segment, then
  it will be difficult to satisfy the market
  segment.
• Actionable The business must take action to
  provide the products needed by this segment.
  Customer complaints and queries should be dealt
  with in the fastest and reliable way as possible
  to satisfy the segment.
• Stable (reliable) The segment targeted should be
  a reliable segment. The segment shouldnt appear
  today and disappear tomorrow, therefore before
  targeting a particular segment, the business
  should make sure the segment is reliable. It is
  the responsibility of the business to also should
  reliability and consistency in the provision of
  goods and services to the particular segment.
  Customers should have the goods they need at all
  time at the right price, quantity and quality.
  Customer complaints should also be dealt with in
  the fastest way possible.
• Substantial The segment should be large enough
  so that the business can also get more profit.
  The business should focus on segments with many
  customers so that the profitability can be
  substantial.
• Measurable The Marketer should be able to
  measure the amount of people in a particular
  segment, the resources needed satisfy customers
  in the segment and also the cost and benefit of
  targeting a particular segment.
• Affordable The business should be able to take
  care of the needs and wants of a particular
  segment. Businesses shouldn't target segments
  that they wont be able to provide the products
  needed by the segment. Part of customer
  satisfaction is to provide the products they
  need, but in a case where a business cannot meet
  up with the demand, need and want of customers
  then customers will not be satisfied and it is to
  the detriment of the business.

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Marketing fundamentals- MARKET SEGMENTATIONBASES
FOR SEGMENTING THE MARKET IN CONSUMER MARKET

• SEGMENTATION IN CONSUMER MARKET
• Demographic Segmentation according to
  age,gender,income,occupation, marital status and
  Life cycle, education, religion, race,
  nationality, family size, family life cycle.
• Marketing Fundamentals
• Source CIM course book

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• Geographic Segmentation according to regions,
  country size, cities size, town, villages,
  continents, density climate.
• Psychographic Segmentation according to social
  class, lifestyle, personality.
• Behaviour Segmentation according to purchase
  occasion, benefit sought, loyalty status,
  readiness state, attitude towards product, User
  status, usage rate, purchase occasion, loyalty
  status

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SEGMENTING INDUSTRIAL MARKETS
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MARKET TARGETING
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MARKET TARGETING

• Learning Objectives
• After completing this chapter, you should be able
  to
• Define market targeting
• Explain the targeting strategies

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Targeting
M1
M2
M3
M1
M2
M3

Male population

P1
P1
Single segment target

Male female Old

P2
P2
P3
e.g Male population
P3
M1
M2
M3
P1
Product specialisation


Middle age
children
Old
P2
Multi-segment target
M1
M2
M3



P1
P3
P2
M1
M2
M3
P3
Suit male
Shoes male
Shirt male
P1
Full market coverage
Market Specialisation
P2
P3
MMarket and P Product
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Targeting Strategies
Segment 1
MARKETING MIX
Segment 2
Concentrated strategy/marketing Micro
marketing Niche marketing
Segment 3
Segment 1
MARKETING MIX 1
Segment 2
MARKETING MIX 2
Segment 3
MARKETING MIX 3
Differentiated strategy/marketing Individual
Marketing
Whole market
MARKETING MIX
Undifferentiated strategy/marketing e.g.
(Shoe Zone, Microsoft, Dell) Mass Marketing
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MARKET POSITIONING

• Learning Objectives
• After reading this chapter, you should be able
  to
• Define market positioning
• Explain the positioning strategies explain how
  companies can position the market and their
  products for maximum competitive advantage in the
  market place.
• Define differentiation.
• Explain why companies seek to differentiate their
  products, markets and use positioning strategies.
• Examine the positioning map of an organisation
• List and discuss the principal ways in which
  companies can differentiate their products.

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MARKET POSITIONING
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POSITIONING

• Positioning means designing a product to occupy a
  distinct and valued place in the minds of
  customers.
• Companies can position the market in terms of
  price, product, quality, brands, promotion, and
  customer service.
• The essence of positioning is to enable the
  company to have more competitive advantage over
  its competitors.
• When positioning, the company should identity
  customers needs, produce the product targeted at
  customers.
• The product packaging, labelling, styling,
  branding, designing, pricing, promotion and
  distribution should seriously be analysed.
• A good marketing programme such as marketing
  research,
• Marketing mix, segmentation, targeting, new
  product
• development and market expansion will boost the
  companys
• competitive advantage.

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POSITIONING

• Companies need to find out what position they are
• in, in relation to their competitors.
• Am I a market leader or a market follower? This
  is a question that should be asked by
  organisations.
• Marketing planning, and marketing
• strategies should be implemented to enable
• the company to have competitive
• advantage.

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POSITIONING

• KEYS TO SUCCESSFUL POSITIONING
• Source Principles and practice of marketing- 2nd
  edition by David Jobber

Consistency
Clarity
Successful positioning
Credibility
Competitiveness
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POSITIONING

• POSITIONING MAP OF SUPERMARKETS
• Source Principles and practice of marketing- 2nd
  edition by David Jobber

.
.
.
High price
.
A
B
C
D
.
.
.
Narrow product range
.
Wide product range
G
F
X
E
Low price
A PERCEPTUAL MAP OF SUPERMARKETS
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KEY DEFINITIONS

• Segmentation
• The act of dividing a market in to distinct group
  of
• customers who share the same market
  characteristics.
• Targeting
• The act of focusing on the particular segment or
  segments and providing the products needed by
  that particular segment.
• Positioning
• It means making a product to occupy a distinct
  and valued place in the minds of customers.

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REVISION QUESTIONS

1. Explain the value of market segmentation,
   targeting and positioning in modern businesses
   today.
2. Explain what is market segmentation, targeting
   and positioning.
3. Explain the criteria for segmenting the market
4. Examine the bases for market segmentation
5. Explain the various targeting strategies that
   businesses can use to target customers.