MARKET SEGMENTATION, TARGETING AND POSITIONING (STP)

Steps in Segmentation, Steps in Segmentation, Targeting, and Positioning Targeting,

and Positioning
6. Develop Marketing Mix for Each Target Segment 5. Develop Positioning for Each
Target Segment 4. Select Target Segment(s) 3. Develop Measures of Segment
Attractiveness 2. Develop Profiles of Resulting Segments 1. Identify Bases for
Segmenting the Market

Market Positioning Market Targeting

Market Segmentation
Market Segmentation
What is Market Segmentation?
Market segmentation is the process of dividing the total market for good or service
into several smaller groups. Dividing a market into distinct groups of buyers on
the basis of needs characteristics or behaviour who might require separate product
or marketing mixes.
Levels of Market Segmentation
Mass Marketing:
# The seller engages in mass production, mass distribution, and mass promotion of
one product to all buyers. # Mass marketing creates the largest potential market,
which leads to the lowest costs, which in turn can lead to lower prices or higher
margins. # Now a days the explosion of advertising media and distribution channels
has made it difficult and increasingly expensive to reach a mass audience.
Levels of Market Segmentation
Micromarketing: Many companies are turning to micromarketing these days by choosing
one of the four levels;
Segment marketing Individual marketing Niche marketing Local marketing
Levels of Market Segmentation
Segment marketing
Dividing the market into different segments on the basis of homogenous need.
Segmented on basis of broad similarity with regard to some attributes Segmentation
is also sometimes identifying, capturing & retaining potential new markets
Levels of Market Segmentation
Individual marketing
Extreme marketing in which marketers focus on individual customers. Keep track of
individual tastes & preferences of individual customers Many companies are
approaching individuals through e-mails to promote their products.
Levels of Market Segmentation
Niche marketing
Marketers effort to position their product or service in smaller markets that have
similar attributes and have been neglected by other marketer Segment further
divided into sub segments to cater unsatisfied needs of small group is called as
niche
Levels of Market Segmentation
Local marketing
marketers offer customized products to suit the local markets. KFC introduced
Muslimized or Pakistani products such as Spicy Chicken, Hilal Chicken, Zinger
Extreme and more
Bases for Consumer Market Segmentation

Market Segementation

Geographical
Regions, cities, states, countries

Demographic Age, gender, income, occupation, religion, social class, family size

Psychographic Life style, personality, values, beliefs

Behavioral Occasions, Benefits, Usage rate, Loyalty status

Bases for Segmenting Business Markets Bases for Segmenting Business Markets
Personal Characteristics Demographics

Situational Factors

Bases Bases for Segmenting for Segmenting Business Business Markets Markets
Purchasing Approaches

Operating Characteristics
Bases for Segmenting International Bases for Segmenting International Markets
Markets Industrial Markets Industrial Markets
Political/ Political/ Legal Legal

Geographic Geographic

Economic Economic

Cultural Cultural
Requirements for Effective Segmentation Requirements for Effective Segmentation
Measurable Measurable Accessible Accessible Substantial Substantial Differential
Differential Actionable Actionable
Size, purchasing power, profiles of segments can be measured. Segments must be
effectively reached and served. Segments must be large or profitable enough to
serve.

Segments must respond differently to different marketing mix elements & actions.
Must be able to attract and serve the segments.
MARKET TARGETING
MARKET TARGETING
Once the firm opportunities, it one to target. has identified its has to decide how
market-segment many and which

Target market is a group of customers for whom a seller designs a particular

marketing mix.
Target Market Selection Process
Evaluating the Market Segments

Selecting the Market Segments

Evaluating Market Segments
Before selecting the respective market segment, the company should evaluate the
possible market segments in the current markets. It should identify and select its
target consumers, give them their product according to their needs and establish
that group of consumer in to permanent market segments.
Selecting the Market Segments
Here the co., can consider five patterns of target market selection;
Single-Segment Concentration Selective Specialization Product Specialization
Market specialization Full market coverage
Selecting the Market Segments
Single Segment Concentration: Focusing on a single segment gives the marketer the
advantage of high sales as all the efforts are concentrated on that one segment
Example: Mercedes concentrates on upper income group
Selecting the Market Segments
Selective Specialization: Process in which the company focuses its resources on a
few segments and develops its expertise in fulfilling the needs of those segments
Selecting the Market Segments
Product Specialization :
The firm makes a certain product that it sells to several segments Example:
Microscope manufacturer who sells to university, government, and commercial
laboratories.
Selecting the Market Segments
Market specialization: The firm concentrates on serving many needs of a particular
customer group. Example: A firm sells assortment of products only to university
laboratories.
Selecting the Market Segments
Full market coverage: Company targets the full market rather than any specific
segment. Example: Hewlett-Packard targets the full market for its printers.
In Full market coverage,
Large firms can cover a whole market into two broad ways;
Undifferentiated marketing Differentiated marketing
GUIDELINES FOR SELECTING TARGET MARKET
it should be consistent. It should meet organizational goals. It should be
consistent with organizational resources. It should generate sufficient profit
volume. It should have competitors small in size and number.
MARKET POSITIONING
Positioning
In marketing, positioning has come to mean the process by which marketers try to
create an image or identity in the minds of their target market for its product,
brand, or organization. Kotler defined: designing an offer so that it occupies a
distinct and valued place in the minds of the target customer.
Positioning

Positioning Image that customers have about a product in relation to the products
competitors
Positioning Strategy
Key to developing the appropriate marketing mix is the positioning strategy of the
product.
Select Positioning Strategy
Effective positioning What consumers currently think about the product,
especially in relation to competing products. What the marketer wants consumers
to think about the product. Which positioning strategy will elevate the
consumers current product image to the desired product image.
Select Positioning Strategy
Position Mapping- creating a visual description about consumer perceptions of a
product on two or more dimensions in relation to competitors.
Select Positioning Strategy
The positioning strategy must determine where a company wants to go And how to get
there by positioning the product according to any of the following ways:

Price/Quality Product Attributes Product User Product Usage Product Class

Competition Symbol