MODULE 1. Segmentation,Targeting and Positioning
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1 MODULE 1 Segmentation,Targeting and Positioning Segmentation, Targeting and Positioning Definitions Segmentation Variables Evaluation of Segments Summary What is segmentation, anyone? What about targeting and positioning? Segmentation is the process of grouping people or organizations within a market according to similar needs, characteristics, or behaviors Dividing the market into groups an entire market rarely has the same tastes and preferences it is difficult to handle all preferences too Mercedes Benz, for example (only high-end) Targeting is the actual selection of the segment you want to serve the target market is the group of people or organizations whose needs a product is specifically designed to satisfy Positioning is the use of marketing to enable people to form a mental image of your product in their minds (relative to other products) 1
2 STP Marketing is the name of the game The days of one size fits all are over No longer can one say You can have any colour as long as it is black Need to follow the horses for courses policy - no more mass marketing Moving towards mass customization in fact Levi s Personal Pants National Bicycle Company How to segment a market? On what basis/bases? What are some criteria/variables? Segmentation - Variables Demographic Segmentation Age, Gender, Income Age Bicycles Disney s Cartoons Pension Plans, Retirement Funds e.g. LIC Gender Hasbro Toys Cindy for girls, GI Joe for boys Gillette Razors for men, women most cosmetics, perfumes etc 2
3 Revlon, Ralph Lauren Income Toyota Lexus for high end Camry for the middle of the roaders Corolla for low end HLL soaps - Dove for high end, Hamam for low And so on Income is possibly the most common basis for segmentation Other Demographic Variables Include Religion, Ethnicity, Occupation, Generation (Baby Boomers, Generation Next, Yuppies) and so on Geographic Segmentation snow boots in the Northern part of USA Of course, all International Marketing is done on a regional(geographic basis) The Same Honda Accord is different in different countries! Most MNCs vary their products according to country special tires in the Middle East Taj: AP - hot food, Kerala - more coconut and so on Behavioral Segmentation On the basis of occasions, product usage, benefits sought, brand loyalty Occasions Y2K Cruises Hallmark Cards a greeting card for every occasion - Valentine s Day Card, Deepavali card 3
4 Benefits Sought there are certain specific benefits sought - example would be Colgate Tartar Control for Tartar User Status Non-Users Vs Current Users Credit Card Companies new card vs another card Blood Banks, entry level cars/bikes Usage Rate Heavy Users Vs. Light Users The Beer Market is a classic example Miller Lite, BudWeiser all target the heavy user Bajaj M80 could be another candidate Psychographic Segmentation Lifestyle products like Raymond Evaluation of Segments Having segmented the market, which one to choose? What are the criteria? Is there potential sales, growth and profit? Big Emerging Markets (BEMs) China, India, Brazil etc Potential Competition and Cost is it too much? Imagine going against Microsoft in the PC OS market for someone like Unix 4
5 Tata Indica was smart in battle Vs. Maruti Potential Risk environmental doing business in Iraq now Or even Kashmir Is it compatible with my current business? Mercedes going downscale with E-Class will it hurt the Mercedes brand? will it cannibalize my existing brand? Air India starting a budget airline? Summary STP Marketing is highly important Consumers are very finicky and want to feel special From mass marketing to mass customisation Segmenting is important let Bajaj Chetak, Ambassador, Fiat, Maruti 800 even be examples 5
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