Maket Segmentation, Targeting and Positioning

Meaning of segmentation, Bases of segmentation, Requisition of sounf market segmentation,

Benefits of segmentation, Levels of segmentation, Target marketing, Target market
strategies, Positioning strategies, Positioning attributes

Meaning of segmentation: Market segmentation is a marketing term that refers to aggregating

prospective buyers into groups or segments with common needs and who respond similarly to
a marketing action. Market segmentation enables companies to target different categories of
consumers who perceive the full value of certain products and services differently from one
another.

For example, an athletic footwear company might have market segments for basketball players
and long-distance runners. As distinct groups, basketball players and long-distance runners
respond to very different advertisements. Understanding these different market segments
enables the athletic footwear company to market its branding appropriately.

Bases/ Levels of segmentation

1. Demographic segmentation
2. Psychographic segmentation
3. Geographic segmentation
4. Behavioural segmentation

Geographic segmentation

Geographic segmentation consists of creating different groups of customers based on

geographic boundaries. The needs and interests of potential customers vary according to their
geographic location, climate and region, and understanding this allows you to determine where
to sell and advertise a brand, as well as where to expand a business.

Demographic segmentation

Demographic segmentation consists of dividing the market through different variables such as
age, gender, nationality, education level, family size, occupation, income, etc. This is one of
the most widely used forms of market segmentation, since it is based on knowing how
customers use your products and services and how much they are willing to pay for them.
Psychographic segmentation

Psychographic segmentation consists of grouping the target audience based on their behaviour,
lifestyle, attitudes and interests. To understand the target audience, market research methods
such as focus groups, surveys, interviews and case studies can be successful in compiling this
type of conclusion.

Behavioural segmentation

Behavioural segmentation focuses on specific reactions, i.e., the consumer behaviours, patterns
and the way customers go through their decision-making and purchasing processes. The
attitudes the public has towards your brand, the way they use it and their awareness are
examples of behavioral segmentation. Collecting this type of data is similar to the way you
would find psychographic data. This allows marketers to develop a more targeted approach.
Requisites for sound marketing

1. Measurable

The size and purchasing power profiles of your market should be measurable, meaning there
is quantifiable data available about it. A consumer’s profiles and data provide marketing
strategists with the necessary information on how to carry out their campaigns. It would be
difficult to create advertisements for markets that have little to no data or for audiences that
can’t be measured. Always ask whether there is a market for the kind of product or service that
your business wants to produce then define how many possible customers and consumers are
in that market.

2. Accessible

Accessibility means that customers and consumers are easily reached at an affordable cost.
This helps determine how certain ads can reach different target markets and how to make ads
more profitable. A good question to ask is whether it’s more practical to place ads online, on
print, or out of house. For example, gather data on the websites a specific target market usually
visits so you can place more advertisements on those websites instead.

3. Substantial

The market a brand should wants to penetrate should have a substantial number. Clearly
definable consumer’s profiles by gathering data on their age, gender, job, socio-economic
status, and purchasing power should be feasible. It doesn’t make sense to try and reach an
unjustifiable number of people — you’re just wasting resources. However, you also don’t want
to market the brand to a group too small that the business doesn’t become profitable.

4. Differentiable

When segmenting the market, you should make sure that different target markets respond
differently to different marketing strategies. If a business is only targeting one segment, then
this might not be as much of an issue. But for example, if your target market is college students,
then it’s essential to create a marketing strategy that both freshman students and senior students
react to in the same positive way. This process ensures that you are creating strategies that are
more efficient and cost-effective.
 5. Actionable

Lastly, your market segments need to be actionable, meaning that they have practical value. A
market segment should be able to respond to a certain marketing strategy or program and have
outcomes that are easily quantifiable. As a business owner, it’s important to identify what kind
of marketing strategies work for a certain segment. Once those strategies have been identified,
ask yourself if the business is capable of carrying out that strategy.

Benefits of Market Segmentation

1. Higher Rate of Success

Market segmentation means to study your market, to be more precise it helps to divide a bigger
market into smaller modules and lets the marketers know the potential of the market/consumers
which reduces the risk of loss and thus there are higher chances of success for the business.

2. Increases Profitability

Market segmentation is a very effective process for business and it helps the business to target
particular segments of the market and thus helps to find better business opportunities pertaining
to that particular market segment. The marketers can thus, strategize their campaigns as per the
chosen market segment needs and requirements and helps to increase the business profitability.
This technique lets the companies focus on one particular segment rather than the whole market
which in return gives increased profit.

3. Increases Competitiveness

When the focus and the target market is clearly identified to the marketers and the business
team, then comes the competitiveness. As the target market is known to the business, the
competition in the market will increase and the marketing team will come up with new
innovative ideas to promote their brand better to stand out among the competitors. Different
offers and discounts will help the marketing team to attract more consumers and knowing your
consumers better will help gain brand loyalty.

4. Retention of Customer

Retaining customers is very crucial for the business and market segmentation helps in customer
retention. Once the business knows the consumers, their needs can be catered well and the
customer’s experience with the market brand will help to connect with the product/service like
the hospitality sectors. Consumers mostly prefer the products/services they have experienced
especially in the cases of airlines and hospitals.

5. Creates and Provides Market Opportunities

Market segmentation helps to identify and recognize potential market opportunities. The
market segments where the consumers are less satisfied with the other brands are the
opportunity areas for the company to focus and to establish their brand. The companies can
work in these segments and provide a better product to the consumers than the already existing
ones in the market and earn the consumer’s loyalty. Thus, market segmentation gives excellent
market opportunities.

6. Effective Market Campaigning

As the business knows the consumers and their needs, the marketing team can customize or
personalize their marketing campaign accordingly and organize their strategies as per the need
of the market which is directly proportional to the success of the business.

7. Wise and Efficient Use of Resources

Market segmentation helps to save unnecessary time and effort engaged in the marketing
campaign by identifying the potential areas of the market. Thus it helps to use the company
resources and money in a more streamlined and efficient manner.

8. Higher Customer Satisfaction

Market segmentation directs or guides the company to make its market-ing efforts consumer
and market-oriented in a specific market segment, and lets the companies serve the consumers
better, increasing customer satisfaction which is the ultimate goal of the business.

9. Cost-Efficient

Efficient market research and market segmentation help to save a lot of useful time, money,
and resources invested in the marketing campaign. Also as the customers are grouped as per
their needs, commonalities, choices, statuses, etc. it becomes easy to target the audience for the
marketers. Thus through market segmentation, the campaign management process is conducted
very smoothly and efficiently in a cost-effective manner.
 10. Know your Customer Better

Market segmentation helps to study the market needs and potential consumer which reduces
the risk of loss or unsuccessful marketing campaigns. As the market research is done in advance
before the campaign the chances of being successful are much more as the segmentation of the
market helps the marketers to do their homework for marketing. The marketers can strategize
and plan their campaigns as per the generic needs of the potential consumers as per the market
research.

Target marketing

A target market is a group of people that have been identified as the most likely potential
customers for a product because of their shared characteristics such as age, income, and
lifestyle. Identifying the target market is a key part of the decision-making process when a
company designs, packages, and advertises its product.

Part of creating a new product is envisioning the consumers who will want it. A new product
must satisfy a need or solve a problem, or both. That need or problem is probably not universal
unless it reaches the level of indoor plumbing. More likely, it is needed by a subset of
consumers, such as environmentally-conscious vegetarians, or science nerds, or outdoor
enthusiasts. It may appeal to a teenager or a middle-aged professional, a bargain-hunter or a
snob. Envisioning your likely target market is part of the process of creating and refining a
product, and informs decisions about its packaging, marketing, and placement.

For example, there are an estimated 100,000 Italian restaurants in the U.S. Clearly, they have
enormous appeal. But a corner pizza joint might appeal mostly, although by no means entirely,
to a younger and more budget-conscious consumer, while an old-fashioned white tablecloth
place might be dominated by older folks and families who live in the neighbourhood.
Meanwhile, a newer place down the street might cater to an upscale and trend-conscious crowd
who will travel a good distance for the restaurant's innovative menu and fancy dine list.

Target marketing strategies

1. Mass Marketing (same product to all consumers) in mass marketing we assume that
target market is made of similar kind of consumers and we use the same product,
 promotion, and distribution to all consumers. e.g. coca cola at a time. Mass production,
distribution in the bulk-and global advertisement are the advantage of mass marketing.
2. Segment Marketing (different products to one & more segments) in segment
marketing we make an offering so they more closely match the needs of one or more
segments. We also refer it to selective marketing or differentiated marketing, Executive
class and economy class of ticketing in the airlines’ industry, Room segmentation in
hotel business are the example of segment marketing. These products are carefully
designed to meet the needs of each segment served.
3. Niche Marketing (different products to subgroups within segments) in Niche
marketing a company makes its offering to match the needs of one or more micro-
segments more closely where there is no, or petition or little competition. We can name
it as concentrated marketing, firms concentrate their selling to a small market segment
or niche. Fortuner SUV is a classic example of niche marketing.
4. Micro Marketing (products to suit the tastes of individuals or locations) is
marketing programs tailored to narrowly defined geographic, demographics
psychographics behavioural segments. These marketing strategies are applicable to
selected segments only and can’t be relevant to another segment though similar.

Positioning strategies

Positioning refers to the place you want your brand or product to have within a particular target
market. More specifically, the process of market positioning and brand positioning involves
how you market your brand or product to consumers to achieve that position. The aim of
positioning in marketing is to establish or sway how consumers perceive you to gain a
competitive advantage. A great positioning strategy elevates marketing efforts to help
consumers move from knowing about a brand to deciding to purchase a product. And as
positioning can sometimes be subtle, it’s usually easier to detect when viewing from the same
angle as a consumer.

For example, look at Burger King’s brilliant advertisement “Why eat with the clown when you
can dine with a king?”. Not only does it suggest that Burger King has a higher class of dining
experience than McDonald’s, but it’s also an excellent example of how positioning in
marketing operates.
Positioning attributes

1. Positioning on Product attribute

The first product positioning strategy is positioning on product attributes or characteristics.

While marketing the product, you need to describe your product’s specific features i.e. why it
is unique from others, why these unique features matter, etc. to your target customers. Your
product’s specific feature could be specific quality, design, price, service, and any other
attributes that particularly give a specific feature to your product. This strategy may help you
to build up your organization’s image in the market.

2. Positioning of Product Benefits

This is another one of the important product positioning strategies. In this strategy, you can
mention the significant benefits of your product that can obtain any buyer when using it. In this
strategy, many companies focus on adding various benefits to a product. The product benefits
may be durability, reliability, convenience, economy, efficiency, peak experience, etc. And, it
is believed that this positioning strategy may create the needs in the minds of the customers for
that particular product.

3. Positioning on Specific Usage Occasions

You can also position your product in the market on the basis of specific occasions. Here, the
marketer seeks to position his product on the basis of the specific usage situation of the target
market. When you want to position your product on birthday, is one example of occasion
positioning. A marketer may target on many occasions of his target customers such as birthday,
engagement, marriage, special festivals, picnic, weekend, etc. For this, he has to understand
the intention, what people need to have on their special occasion, etc. The uniqueness of
occasionally offering may bring more sales to the firm which leads to increase profit and market
share also.

4. Positioning on Category

In this, the marketer or business firm deals with certain specialized products and focuses on
some specific users. Here, a marketer wants a product position in a specific market segment.
For e.g. a marketer focuses only on girls under 10 rather than focusing on both all girls and
boys. A marketer can make his campaign only for children, where he is only inviting children
customers. Some may advertise as ‘remember for quality product and service’, here they are
inviting only high-class people who require quality product and services. Also, some may
advertise as ‘remember for low priced products, here they are inviting low-class people who
need cheapest products and can not buy expensive products.

5. Positioning against competition

As its name suggests, in this positioning strategy a marketer wants to make his product’s
position over competitors. The marketer wants to messages the target customer that his product
is more qualitative or better than others. It is just like jumping into a competition. To make
better quality, may a marketer has to modify all the settings including raw materials, production
system, marketing mix, after-sales service, etc. It may be costly while restructuring all the
settings. However, when the marketer becomes successful he will earn competitive profits as
well as may bear the loss as there are very high opponents. Because, sometimes this type of
product positioning strategy, instead of building a company’s image, damage its goodwill or
image in the long run.

6. Positioning on Product Price and Quality

In the market, people are of both types – price sensitive and quality sensitive. Price-sensitive
people believe that paying a high price for the product is a waste of money. While buying
products they always focus on price, which means they ignore the quality of the product. And
they buy the product at having a low price. Whereas, quality-sensitive people believe that
higher-priced products have higher quality. They assume product quality and price have a
direct relation. While purchasing the products, they prefer the quality either the price is very
high, they have believed that they are using the product that has no side effects on their health.
So, while marketing the marketer can use both product positioning strategies by understanding
the nature of the target customers.

7. Reducing competitors strategies

The competition will always remain in the market, eliminating it ultimately is a very
challenging job smarter companies nullify the effect of competitors to stay at prime in the
market. A brand can reduce competitors by using specific strategies such as:

➢ By correctly identifying the pain points of customers and catering them productively.
➢ By building a niche to have more space for your business
➢ Enrich your brand with innovations
➢ Get the significant step of pricing correct
➢ Focus and provide exceptional customer service
Examples: Apple is a brand who focus majorly on innovation and is always ahead of
competitors strategies. It wiped out Smartphone giants like Nokia and Blackberry from the
market due to lack of innovation.