Segmenting, Targeting And Positioning

Market segmenting is defined as ‘the process of taking the total heterogeneous market for a product and dividing it into several submarkets or segments, each of which tends to be homogeneous in all significant aspects.

A market segment is a group of individuals or organizations within a market that shares one or more common characteristics. The process of dividing a market into segments is called market segmentation. There are two types of market segmentation approaches: concentrated and differentiated

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Requirements of effective segmenting

Substantiality,

Measurability,

Accessibility,

Representability,

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Nature of demand, and

Response rates.

Substantiality refers to the size of segmented markets. When the size of the segment become small, it may not be possible for the marketer to develop separate marketing mix for such unprofitable segments. In short, demand from one segment must be grat enough to make marketing efforts worthwhile.

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Measurability the main purpose of market segmentation is to measure the changing behavior patterns of consumers. Therefore, the segments should be capable of giving accurate measurement but this is often a difficult task and the segments are to be under constant view

Accessibility could be attained through the existing channel of distribution, advertising media salesman, etc. newspaper and magazine also offer for some help in this direction. For example, there are magazines meant exclusively for the youth, for the professional people,etc.

Representability-another condition is the represent ability of each segment. Market segments must be representative in nature and must have individuality of their own. For example, each segment will be small in the case of industrial products but comparatively large in respect of consumer products.

Nature of demand refers to different quantities demanded by various segments. Each segmented market must exhibit difference in consumption rates from another segment. In short, segmentation is required only if there are marked differences in nature of demand.

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Finally the segmented must show the difference in responses to the marketing variables. If various segments respond in similar ways to a marketing mix. For, example if all segments respond in identical fashion to price changes, there is no need for different price for individual segments.

Benefits of market segment

The manufacturer is in a better position to find out and compare the marketing potential of his products. He is able to judge product acceptance or access the resistance to his product.

The result obtained from market segmentation is an indicator to adjust the production, using men, materials and other resources in the most profitable manner. In other the organization could allocate its appropriate efforts in a most useful manner

Changes required may be studies and implemented without losing markets. As such, as soon as the product becomes absolute, or even earlier, the product line could be diversified or even discontinued.

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It helps in determining the kinds of promotional devices that are effective and also helps to evaluate their results

Appropriate timing for the introduction of new products, advertising, etc. could be easily determined

Bases or methods of market segmentation

Geographic segmentation. Chronologically, this kind of segmentation appeared first. For planning and administrative purposes, the marketer will often find it convenient to subdivide the market into areas such as nations regions, cities, etc. in a systematic way.

Demographic segmenting. Under this method, the consumers are grouped into homogeneous groups in terms of demographic similarities such as age group, product life cycle, cycle income level etc.

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Socio-economic segmentation. The segmentation here is done on the basis of social class example, working class, middle income group, etc. since marketing is potentially and intimately connected with the ability to buy this segmentation is meaningful in analyzing buying patterns of a particular class.

Product segmentation. When the segmentation of markets is done on the basis of product characteristics that are capable of satisfying certain special needs of customer.

Psychographic segmentation. In this type of segmentation, buyers are divided into different groups on the basis of personality and life cycle. Marketers create brands to suite consumer personalities.

Benefit segmentation. Under this method the buyers form the basis or segmentation but not on demographic. These benefits or utilities may be classified into generic or primary utilities and secondary or evolved utilities

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Behavioral segmentation. In this case buyers are divided into groups on the basis their knowledge of attitude etc.

Product positioning

This is an aid to product planning. It shows where proposed and or present brands are located in a market. This is technically defined as a “process of identifying the needs of market segments, product strengths and weaknesses and the extent to which competing products are perceived to customer needs. In other words relating a product to the market is termed as ‘product positioning’

Thus product positioning refers to targeting the product at specific class of customer or specific needs it determines the image of the product in relation to the rival products.

After deciding the segments which it will target a firm has to decide what position it wants to occupy in the chosen segments. A product position means a way the product is defined by consumers on important attributes i.e. the place the product occupies in consumer mind relative to competing brands.

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Positioning consists of four steps.

Identifying a set of possible competitive advantage upon which to build a product position.

Choosing the right competitive advantage.

Selecting an overall positioning strategy.

Communicating and delivering the chosen position to the target markets

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A company has to decide how many differences to promote. In doing so it should avoid under positioning and over positioning and confused positioning.

Positioning helps in achieving certain objectives

To create a distinctive image of the product in the minds of customers.

To provide a competitive edge to the product.

To give the target markets the reason of buying the product.

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To serve as a guide in developing a marketing mix, each element of which consistent with the positioning.

To assist in taking appropriate action in response to the moves of competitors.

The common basis used for positioning a product as follows

Features.- physical attributes or performance characteristics are often used to position products, size, shape, color, smell, taste and years of existence are such characteristics.

Benefits- the benefit directly related to the product is highlighted in the basis of positioning. For example surf detergent washes the whightest,”fair and lovely is fairness soap, and so on.

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Usage of application- this involves positioning the product as best for some endues or application. For example’ use complain to gain height

Comparison. Here the product is positioned as better in some way than a named or implied competitor. For example maruti cares are compared with other car brands.

Product category- in this case the product is positioned as the leader in a certain class of products. For example dove soap is positioned as the best moisturized soap and a pear is positioned as glycerin soap.

Price/ quality – here the product is positioned as offering the best value for money. For example-titan watches “international quality at Indian price.

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Geographic area. In this basis of origin of the product is highlighted e.g., Darjeeling tea, Nagpur oranges etc.

Parentage. Here the maker of the product is stressed e.g. ‘single washing machine who knows sewing machines better than u.

Ingredients. The content of the product are highlighted to position the producte.g.” hundred percent cotton shirt”

Manufacturing process. The person with whom the target customers are likely to identify are used to position the product, e.g. “sachin tendulkar saying in advertisement that boost is the secret of my energy.

Position strategies

More for more. In this positioning a firm provides the most upscale product or service at a higher price to cover the higher costs.

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More for the same. The firm offers comfortable quality but a lower price.

The same for less. The firm offers comparable qyality at a lower price.

Less for much less. It involves meeting low quality and performance needs at a much lower price.

Mare for less. For example P&G claims that its laundary detergents provides the best cleaning at lower price.

Ponds

Skin care means different things to different people, but it all comes to a single need where we like to have a smoother skin which reflects our real beauty

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Demographic segmentation of ponds

Under this, the product mainly concern for woman who are 30+ and who have a problem of wrinkles on their faces

Positioning a positioning built on meaningful differences supported by appropriate strategy and implementation can help the company build competitive advantage.

They are positioning our product in the minds of people by their slogan and there logo that reflects youth as it makes the skin wrinkle free like the skin of young people.

After the most attractive segments are selected, a company should not directly start targeting all these segments — other important factors come into play in defining a target market. Four sub activities form the basis for deciding on which segments will actually be targeted.

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The four sub activities within targeting are:

1. Defining the abilities of the company and resources needed to enter a market

2. Analyzing competitors on their resources and skills

3. Considering the company’s abilities compared to the competitors’ abilities

4. Deciding on the actual target markets.

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The first three sub activities are described as the topic competitor analysis. The last sub activity of deciding on the actual target market is an analysis of the company’s abilities to those of its competitors. The results of this analysis lead to a list of segments which are most attractive to target and have a good chance of leading to a profitable market share.

Obviously, targeting can only be done when segments have been defined, as these segments allow firms to analyze the competitors in this market. When the process of targeting is ended, the markets to target are selected, but the way to use marketing in these markets is not yet defined. To decide on the actual marketing strategy, knowledge of the differential advantages of each segment is needed.

Olay total effects

Similarly Olay total effect is the product for women’s at the age of 30 or above. This is basically to remove the problem of wrinkles on the face due to old age.

Positioning- a positioning built on meaningful differences supported by appropriate strategy and implementation can help the company build competitive advantage.

They are positioning our product in the minds of people by their slogan and there logo that reflects youth as it makes the skin wrinkle free like the skin of young people.

After the most attractive segments are selected, a company should not directly start targeting all these segments — other important factors come into play in defining a target market. Four sub activities form the basis for deciding on which segments will actually be targeted.

The four sub activities within targeting are:

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1. Defining the abilities of the company and resources needed to enter a market

2. Analyzing competitors on their resources and skills

3. Considering the company’s abilities compared to the competitors’ abilities

4. Deciding on the actual target markets.

The first three sub activities are described as the topic competitor analysis. The last sub activity of deciding on the actual target market is an analysis of the company’s abilities to those of its competitors. The results of this analysis lead to a list of segments which are most attractive to target and have a good chance of leading to a profitable market share.

Obviously, targeting can only be done when segments have been defined, as these segments allow firms to analyze the competitors in this market. When the process of targeting is ended, the markets to target are selected, but the way to use marketing in these markets is not yet defined. To decide on the actual marketing strategy, knowledge of the differential advantages of each segment is needed.

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