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TOPIC 8 MARKETING ASPECT 1

STP
 Market Segmentation
 Market Targeting
 Market Positioning

Segmentation, Targeting and Positioning

Linking Customer Needs to Marketing Action

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TARGET MARKETING PROCESS

WHO TO SERVE ?
3 STEPS:
1. Segmentation
2. Targeting
3. Positioning
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STP
• Market segmentation: dividing market into distinct
groups which will require separate marketing mixes
• Target marketing: choosing which group(s) to appeal to
• Market positioning: creating a clear, distinctive position
in the consumer’s mind relative to competition

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Consumer Market Segmentation

• Geographic: • Psychographic:
• Regions • Social class
• Size/density • Lifestyle
• Climate • Personality
• Demographic: • Behavioral:
• Age/generation • Occasions
• Gender • Benefits
• Family size/life-cycle • User status
• Income • Usage rate
• Occupation • Loyalty status
• Religion • Readiness state
• Ethnic origin • Attitude toward product

Geographic Segmentation
• Divide markets into different geographic units.

• Examples:
• World Region or Country: Middle East, South Asia or Pakistan, India etc.
• Country Region: Punjab, KPK, Sindh, etc.
• City or Metro Size: Lahore, Karachi.
• Population Density: rural, suburban, urban
• Climate: northern areas, southern, tropical

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Demographic Segmentation
• Use Differences in:
• age, gender, family size, family life cycle, income,
occupation, education, race, and religion

• Most frequently used segmentation variable

• Ease of measurement and high availability.

Psychographic Segmentation

Psychographic segmentation People in the same demographic

classification
divides a market into often have very different lifestyles and
different groups based on personalities.
social class, lifestyle, or
personality characteristics.

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Behavioral Segmentation
• Occasion • Loyalty Status
• Special promotions &
• Nonusers, ex-users,
labels for holidays.
potential users, first-
• Special products for time users, regular
special occasions. users.

• Benefits Sought
• Different segments • Usage Rate
desire different benefits • Light, medium, heavy.
from the same products.

Loyalty Status Segmentation

Hard-core

Split loyals

Shifting loyals

Switchers
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User & Loyalty Status Segmentation

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Requirements for Effective Segmentation

• To be useful, market segments must be:
• Measurable:
• Size, purchasing power, and profiles can
be measured
• Accessible:
• Segments can be reached
• Substantial:
• Large enough to be profitable
“Lefties” are hard to
identify and measure, so • Actionable:
few firms target this
segment. • Programs can be developed to attract
and serve the segments
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Market Preference Patterns

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Target Marketing Strategies

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Undifferentiated Marketing
(Mass Marketing)

• Appeals to a broad spectrum of people

• Efficient due to economies of scale
• Effective when most consumers have similar needs

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Differentiated Marketing (Segment Marketing)

• Develops one or more products for each of
several customer groups with different
product needs
• Coca-Cola (Coke, Sprite, Diet Coke, etc.)
• Procter & Gamble (Tide, Cheer, Gain, Dreft, etc.)
• Toyota (Camry, Corolla, Prius, Scion, etc.)

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Concentrated Marketing
(Niche Marketing)
• Entails focusing efforts on offering one or
more products to a single segment
• Useful for smaller firms that do not have
the resources to serve all markets
• Niches have very specialized interests

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Micro Marketing
• Local Marketing
• Individual Marketing (one-to-one Marketing)

• Segments are so precisely defined that products are

offered to exactly meet the needs of each individual
• Example: Levi’s Original Spin (custom) jeans, hair stylists

• Mass customization is a related approach in which a

company modifies a basic good to meet the needs of an
individual
• Example: Proctor & Gamble’s products at Reflect.com Form Products
to Be Sold into Groups

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Positioning
The place a product occupies in
consumers’ minds relative to
competing products.

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Positioning Example

eBay’s positioning: No
matter what “it” is, you
can find “it” on eBay!

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Positioning Strategy

• Competitive advantages
• Points of Parity (POP)
• Points of Difference (POD) => Differentiation

Positioning results from differentiation and

competitive advantages.

Positioning may change over time.

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Positioning Example

To (target segment and need) our (brand) is a

(concept) that (point-of-difference).

“To busy mobile professionals who need to

always be in the loop, Blackberry is a wireless
connectivity solution that allows you to stay
connected to people and resources while on
the go more easily and reliably than the
competing technologies.”

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