Market Analysis:

Segmentation,
Targeting and
Positioning
 Market
Segmentation
• Consumers differ widely in terms of space, time,
perception and values.
• Markets are not homogeneous rather they are
heterogeneous
• Two consumers of the same commodity are never in
conformity with each other as far as their nature,
habits, taste or interests, income, age, mode of
purchasing or other attitudes are concerned.
• In order to facilitate the marketing of product
company subdivides a market into homogeneous sub-
sets of customers having common customers in one
set so that the customers may be served better with a
distinct marketing mix.
 Market
Segmentation
“ Market Segmentation is sub-dividing a market
into distinct and homogeneous subgroups of
customers, where any group can be selected
as a target market to be met with distinct
marketing mix.”

“ The process of taking the total heterogeneous

market for a product and dividing it into
market for a product and dividing it into
several submarket or segments, each of which
tends to be homogenous in all significant
aspects
 Basic Market-
Preference Patterns
(a) Homogeneous (b) Diffused (c) Clustered
preferences preferences preferences
 Market Segmentation
Procedure
Description
1. Needs-Based Group customers into segments based on similar
Segmentation needs and benefits sought by customer in solving a
particular consumption problem.
2. Segment Identification For each needs-based segment, determine which
demographics, lifestyles, and usage behaviors make
the segment distinct and identifiable (actionable).

3. Segment Using predetermined segment attractiveness criteria

Attractiveness (such as market growth, competitive intensity, and
market access), determine the overall attractiveness
of each segment.
4. Segment Profitability Determine segment profitability.
5. Segment Positioning For each segment, create a “value proposition” and
product-price positioning strategy based on that
segment’s unique customer needs and
characteristics.
 Market Segmentation
Procedure
Description
6. Segment “Acid Test” Creating segment Storyboards to test the
attractiveness of each segments positioning
strategy.
7. Market Mix Strategy Expanding segment positioning strategy to include
all aspects of marketing mix
 Bases For
Segmenting
Consumer Markets
 Variables
for Segmenting
Consumer
Markets
Demographic
Variables
for Segmenting
Consumer
Markets
 Detailed View of
Demographic Variables
✔ Age ✔ Occupation
✔ Gender ✔ Family Size
✔ Race ✔ Family Life Cycle
✔ Ethnicity ✔ Religion
✔ Income ✔ Social Class
✔ Education
Demographic Geographic
Variables
for Segmenting
Consumer
Markets
 Detailed View of
Geographic Variables

✔ Region ✔ State Size

✔ Urban, Sub- ✔ Market Density
urban, Rural ✔ Climate
✔ City Size ✔ Terrain
✔ County Size
Demographic Geographic
Variables
for Segmenting
Consumer
Markets

Psychographic
 Detailed View of
Psychographic Variables

✔Personality Attributes
✔Motives
✔Lifestyles
 Detailed View of
Psychographic Variables

✔Personality Attributes
✔Motives
✔Lifestyles
Demographic Geographic
Variables
for Segmenting
Consumer
Markets

Psychographic Behavioristic
 Detailed View of
Behavioristic Variables
✔ Volume Usage
✔ End Use
✔ Benefit Expectations
✔ Brand Loyalty
✔ Price Sensitivity
 Target Marketing
• Target Market is a distinctive category
of the market which includes market for
company's product”
• There are three alternatives for defining
and satisfying a target market
 Mass Marketing
 Market Segmentation
 Multiple Segmentation
Steps in Target Marketing
1. Identifying Markets

2. Determining Market Segmentation

3. Selecting a Market to Targeting

4. Positioning through market Strategies

 Market Targeting
• Market targeting is the process of
formulating market coverage policies.
• In this stage, the firm has to evaluate the
various segments and their structural
attractiveness and then decide which ones
to target and haw many market to target.
 Market Targeting
Procedure
I. Evaluating Market segment
• Forecasting segment potential to know the
size and growth.
• Analyzing competitors position to know
segment structural attractiveness.
• Analyzing potential goal and objective
achievement
II. Selecting Market Segmentation Strategies
 Market Segmentation Strategies

Selective Product
Single-segment specialization specialization
concentration M1 M2 M3
M1 M2 M3 M1 M2 M3
P1 P1
P1
P2 P2
P2
P3 P3
P3
Market Full market
specialization coverage
M1 M2 M3 M1 M2 M3
P1 P1
P = Product
M = Market P2 P2
P3 P3
 Undifferentiated Strategy

Single
Marketing
Mix

Organization
Target Market
 Concentrated Strategy
Through Market Segmentation

Single
Marketing
Mix

Organization
Target Market
 Concentrated Strategy
Through Market Segmentation

Single
Marketing
Mix

Organization
Target Market
 Differentiated Strategy
Through Market Segmentation
Marketing Mix 1

Marketing Mix 2
Organization

Target Market
 Positioning
• Product positioning is the final step in
target marketing.
• Positioning strategy is concerned with
selecting a marketing mix appropriate to
each target market segment.
• Positioning is the act of designing the
company’s offering and image to occupy a
distinctive place in the target market’s
mind.
 Elements of
Positioning
1. The Product
2. The Company
3. The Competition
4. The Consumer
 Dif fer entiation

“ Process of adding a set of meaningful

and valued differences to distinguish
the company’s offering from
competitors offerings”
Dif fer entiation Tools
 Pr oduct
Dif fer entiation

Conform-
Fea- Perfor-
Form Quality ance
tures mance
Quality

Dura- Relia- Repair-

Style Design
bility bility ability
 Ser vices
Dif fer entiation

Ordering
Ordering Customer
Customer
Installation
Installation

Miscellaneous
Ease
Ease Consulting
Consulting

Services
Customer Maintenance
Customer Maintenance
Delivery
Delivery Training
Training &&Repair
Repair
Ima ge Dif fer entiation
Media Atmosphere

Symbols

Events
 Per sonnel
Dif ferentiation

Commu
Competence Courtesy Credibility Reliability
nication
 Channel
Dif fer entiation
Coverage Expertise

Performance

Availability
 Mar keting Resear ch
• Today, it has become necessary to study
systematically the different aspects relating to
marketing process with regard to fulfilling the
expectations and needs of the consumer by the
right thing at the right time and at the right place.
• MR is concerned with all those factors which have
a direct impact upon the marketing of products
and services.
• It links the organization with its marketing
environment.
 Mar keting Resear ch
“ MR is the systematic design, collection,
analysis and reporting of data findings
relevant to a specific marketing situation
facing the company”

MR is the systematic gathering, recording, and

analyzing the data about marketing problems
towards the end of providing information
useful in marketing decision making’
 T he Mar keting
Research Process
Defining
Defining the
the Developing
problem
problem and
and Developing Collect
Collect the
the
research the
the research
research information
research plan
plan information
objectives
objectives

Make
Make the
the Present
Present the
the Analyze
Analyze the
the
Decision
Decision findings
findings information
information
 Defining the Problem &
Resear ch Objectives
• The precise definition on the problem helps in
determining the techniques to be used, the extent of
information to be collected.
• It is said that “ A problem well defined is half solved.
• If the problem is clearly defined, it will help the
researcher to handle the problem effectively.
• After defining the basic problem, the researcher must
specify the objectives of the study.
• It is essential for the researcher to have a clear picture
of the purpose of the research because this will guide
the rest of the research process
 1. Develop the
Resear ch Plan
• The second stage of MR calls for developing
the most efficient plan for gathering the
needed information.
• Designing a research plan calls for decision
on
 Data sources
 Research approaches
 Research Instruments
 Sampling plan
 Contact methods
Data Sour ces
 Accounts Receivables/
Payables
Internal
P & L Statements
Secondary
Data Government Publications,
such as Census Figures
External
Nongovernment
Publications
Survey In person
Telephone
Primary Observatio
Data n Mail
Experiment
Internet
Simulation Human
Mechanical
 Resear ch
A ppr oaches
Observational
Observational

Focus-group
Focus-group

Survey
Survey

Behavioral
Behavioral

Experimental
Experimental
 Resear ch
Instr uments

Qualitative
Qualitative
Measures
Mechanical
Mechanical
Devices
devices
Psychological
Psychological
tools

Questionnaires

Research Instruments
 Sampling Plan
Population
Population

Sampling
Sampling Unit
Unit

Sampling
Sampling Size
Size

Sampling
Sampling Procedure
Procedure
Contact Methods

Online
Method
Mail
Questionnaire
Telephone
Interview
Personal
Interview
Contact
Methods
 3. Collect the
infor mation
• The data collection phase of marketing
research generally the most expensive and
most prone to errors.
• In this phase three major problems arise-
 Some respondents will not be at home or
replaced.
 Respondents may refuse to cooperate.
 Respondent may give biased or dishonest
answers
 4. Anal yze the
infor mation
• In this step researcher has
to extract findings from
the collected data.
• To analyze the information
researcher should use
statistical techniques.
5. Pr esent the
Findings
• Objective Look
• Report Deficiencies and
Reasons
• Formal, Written Document
• Short, Clear, and Simple for
Executives
• Technical Report Contains More
Detail
Mar keting Infor mation
System
“ A marketing information system (MIS) consists
of people, equipment, and procedures to gather, sort,
analyze, evaluate, and distribute needed, timely, and
accurate information to marketing decision makers.”
 Components Of MIs
• Computer
• User
• Information
• Marketing Research
• Data Base
• People
 Sour ces of
Infor mation
• Internal Sources
• External Sources
 Need of MIS
• Gin a competitive edge
• Monitor consumer attitude
• Monitor the environment
• Reduce financial and image risk
• Determine the consumer behaviour.
Competition Anal ysis
 Five For ces Deter mining Se gment
Str uctur al Attr activeness (Por ter’s
Model)
Potential Entrants
(Threat of
Mobility)

Suppliers Industry Buyers

(Supplier power) Competitors (Buyer power)
(Segment rivalry)

Substitutes
(Threats of
substitutes)
 Identifying
Competitor s
1. Industry Concept of Competition
2. Market Concept of Competition.
 Industry Concept of Competition
“ An Industry is a group of firms that offer a
product or class of products that are close
substitutes for one another”
• Industry competition can be identified by-
• Number of Sellers and Degree of Differentiation
• Monopoly
• Oligopoly
• Monopolistic competition
• Pure competition
Industry Concept of Competition
• Entry, Mobility, Exit Barriers
• Cost Structure
• Cost Structure
• Degree of Vertical Integration
• Degree of Globalization
 Market Concept of Competition
• Market concept of competition say’s that –
“ Competition is rivalry for consumer disposable
income and competitors are companies that
are satisfy the same customer needs”
• Generic Competition
• Form competition
• Brand Competition
 Analyzing
Competitor s
Objectives

Strategies Competitor
Actions

Reaction
Patterns Strengths &
Weaknesses
Designing Competitive
Str ate gies(254)
Hypothetical Mar ket
Str uctur e &
Str ate gies Market
nicher
Market Market Market
leader challenger follower

40% 30% 20% 10%

Attack leader Imitate Special-

Status quo ize
 Mar ket Leader
Str ate gies
1. Expanding the Total Market(254)
• New Users
– Market-penetration strategy
– New-market segment strategy
– Geographical-expansion strategy
• New Uses
• More Usage
2. Defending Market Share
• Continuous innovation
• Maintaining same quality
 3. Defense Strategies
(2) Flank defense

(3) Preemptive (1)

defense Position (6) Contraction
Attacker defense
(4) Counter- defense
offensive
defense Defender

(5)
Mobile
defense
4. Expanding Market share
• Increasing product quality
• Increasing sales force expenditure
• Increasing sales force activities
Mar ket Challenger
Str ate gies
 Attack Str ate gies
(4) Bypass attack
(2) Flank attack

(1) Frontal attack

Attacker
Defender

(3) Encirclement attack

(5) Guerilla attack

 Specific Attack
Str ate gies
• Price-discount
• Cheaper goods
• Prestige goods
• Product proliferation
• Product innovation
• Improved services
• Distribution innovation
• Manufacturing cost reduction
• Intensive advertising promotion
Mar ket Follower
Str ate gies
Counterfeiter
Cloner
Imitator
Adapter
 Mar ket Nicher
Str ate gies
• Market-Nicher Strategies
– High margin versus high
volume
– Nicher Specialist Roles
• End-user specialist
• Vertical-level specialist
• Customer-size specialist
• Specific-customer specialist
• Geographic specialist
• Product or product-line specialist