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NMIMS-MBA-I (2007-08) Session-3- Segmentation, Targeting, Positioning, Differentiation

Segmentation- Where to compete

• Identify buyer subsets with similar


needs demonstrating similar buyer
behavior - segmentation
• Segment- viable, profitable,
measurable, potential, competitive
intensity, access, values fit- Entry?
• Tourists- by state / country, by age
groups, by interests- adventure,
history, sports, nature, cuisine
Segmentation methods
Demographic segmentation
Customer Markets
• Geography-City, State, Zone (Coke-Chota-Rural, Bada –Urban)
• Psychographics – lifestyle (outdoor/ travel/ clubs), personality (Woodlands-rugged/ extrovert)
• Demographics- Income (Garments/Car), occupation, education, religion, age (Hospitals), sex
(insurance), social class (middle/lower/upper), marital status, Generation (Tech /Net savvy)
• Behaviour- Occasions (Vacations-tour operators/Greeting cards/Wedding) Benefits (Quality-
Sony/Nokia, Service-Dominos), Usage (consumption, heavy, light), User (new, regular),
Loyalty (loyal, split, shifters, switchers), Readiness (Informed, interested, unaware), Attitude
(+ve/-ve, hostile), Convenience (EMI, Home Delivery), User (Brides, Pregnancy)
• Ideal- integrated segment mix
Business Markets
• Demographic- Industry, Company size, Markets
• Operational Variables- Technology, Business terms
Segmentation Matrix- Business Battlemap (Mobiles)
Age (Kids, College, YUP, Execs, Housewives) v Features (PDA. Cam, GPRS, Games, Battery, Talk)

Sports Shoes Market (Exercise) Which segments do Nike, Adidas & Reebok target
Cricket Tennis Soccer Hockey TT Adventure Badminton Exercise
Professional
Amateur
Casual

Psychographic segmentation (Cultural, social, psychological and lifestyle)


• Cultural- Deepest / broadest influence
• Social- Family/friends-most influential, religious, professional
Lifestyle- How u spend time & money eg Niche magazines- Grooming, fashion, car, outdoors
Readers Digest lost 3 million customers only from 1997 to 1999 to niche magazines

VALS- Values, Attitudes, Lifestyle Segmentation


Resources (demographics + psychographics) v Orientation (Principle, status, action)
Actualisers- successful, resourceful, open to change High
Orientation Principle Status Action
Resources

Fulfilleds Achievers Experiencers


Satisfied, practical Career oriented, low risk Impulsive, young
Believers Strivers Makers
Strong principles, Achievers, less Action oriented, self
brands resourceful sufficiency
Strugglers- Economically weak, focus on survival Low

Marketing I (Concepts & Environment) Amit Rangnekar amitrangnekar@gmail.com


NMIMS-MBA-I (2007-08) Session-3- Segmentation, Targeting, Positioning, Differentiation

AIO- How people spend time, what interests them, self view & world view
AIO Activities Interests Opinions
Example Work, Hobbies, Shopping Family, Community, Fashion, Self, PEST
Food
Marketer To identify which lifestyle segments, buying patterns, consumption, usage, attitude, target
relevant segments eg Nike to Joggers, Adidas to serious sportsmen, Reebok to Tennis

Targeting- Which product, which market


• Post-segmentation, select segment/s to target, resource allocation targeted at the segment

Positioning -What Your Customer perceives


• Creating distinct and valued physical and perceptual differences between one’s
product and its competitors, as perceived by the target customer
• The act of designing the firm’s market offering so that it occupies a distinct and valued
place in the minds of its target customers
• Projects brand identity & personality, creates brand perception & image in consumer's minds
• Brand perceptions differ intra segment from C2C eg Food stalls- VFM, variety, cheap,
unhygienic
• Outward expression of brand, aimed at developing a strategic, sustainable competitive
advantage
• Manages perceptions, results in brand image & reputation

Positioning types
• Attribute-Longevity-Since 1904 • Category- Big small car-Indica
• Benefit- Sea view, service speed • Quality-Benz-Future of the automobile
• Use-ICICI- Fast A/c opening • Value-Budget Hotels, Residential flats
• User-Louis Philipe-Upper crust
Positioning anomalies
• Under-Fridge-PUF
• Over- Casio watches now start at Rs 500, perceived as expensive earlier
• Confused- Top Ramen Noodles-‘Smooth’
• Doubtful- Tall promises-Teak plantations, Finance schemes

Marketing I (Concepts & Environment) Amit Rangnekar amitrangnekar@gmail.com


NMIMS-MBA-I (2007-08) Session-3- Segmentation, Targeting, Positioning, Differentiation
Positioning strategies
• Single- Camry-Touch Perfection, Double-Tavera-Comfortable family car, Triple-Liquidity, safety,
returns-MFs
• Multiple Positioning- Brand-positioning strategy presented differently to various target audiences,
success depends on accurate judgment of the market segments and their precise needs /wants
• A chocolate-based health drink, Central positioning of nutrition, Energy- drink for active people,
Dietary food supplement for the elderly & pregnant ladies, Essential growth supplement for
youngsters, Nutritional revitalizer for busy executives
• Appealing to various segments with intact central positioning
Price
Perceptual mapping
• Brands 'mapped' together on a 'positioning map', ShoppersStop
• Compared across parameters BigBazaar
LifeStyle
• Identify weak/strong/absent competitive positions Runwal Giants
• Price v range for super stores in Mumbai High Crossroad Range
• Distinguish brands from competitive offerings
Low Globus ApnaBazar
• Gaps regarded as opportunities for
positioning/repositioning/launch Akbarallys

Positioning statement- Target +Brand +Concept +Differential


High Low
Positioning- Treacy & Wiersema
• Value disciplines- Either brand leader, operationally excellent, customer intimate
• Become best at 1/3, Improve & sustain 1, Achieve adequate performance level & improve 2&3
Trout and Ries framework for successful positioning
• Position- owned/aspired, dislodge who/how, Resources, Patience, Strategy
• To reach target customers in a crowded marketplace, begins with a product but is about perception
of the brand in the customer’s mind- Colour-J&N
• Brand that seeks to be everything to everyone ends up being nothing to everyone
Getting Into the Mind of the Consumer
• 1st mover advantage-Harvard, Sony-If not, claim unique position - Dominos-delivery,
• If brand is not number 1, relate itself to the No.1-Comparative Nirma
• Club player- Fortune 500, Top 3-Leader never says so, followers do
Positioning of a Leader
• Rule of 3- ratio of 4:2:1, generally No1-first launched brand in the product category- Xerox
• If a firm is first to introduce a product, advertising should reinforce it-Carrier ACs, Crabtree switch
• No.1 may sustain leadership, but fail in categories in which it was not first- Sintex
• To sustain leadership, follow multibranding or single-position strategy than change existing ones
holding leadership positions-Taj Hotels- Palaces, Indione Budget Hotels
• Embrace change than resist- especially new technology, 1st-mover advantage helps-Bajaj in bikes
• Sometimes necessary to adopt newer name to adapt to change-Balaji Telefilms to Balaji films, AFL
Positioning of a Follower
• Be first, establish leadership-Harvard- If second, find unoccupied position to be first.LG-Care/Health
Repositioning the Competition
• Where no unique positions exist, reposition the competition- Domino’s Pizza- Delivery 30minutes
• Perception of brand origin- Scotch, Champagne, Basmati
• Power of demonstration- Blind tasting of Colas
• Comparative communication- Double edged- TOI–HT NRS in Delhi, Outlook/Week

Positions that firms successfully have claimed in India


• Beauty- Lux • Fast food- Udipi, VadaPav, Sandwich
• Premium-Bose, Benz • Range- Vijay Sales, Alfa, Nokia
• Thanda- Coke • Youth- Pepsi, Swatch
• World scale- Reliance • Fever- Crocin
• Generic-Cadbury/ Xerox/ Amul Butter • Innovation- Sony, Casio
• Delivery-Domino’s/ Blue Dart • Macho- Enfield Bullet
• Service- Private Banks, Maruti • Performance- Nokia, Bata, Titan
Marketing I (Concepts & Environment) Amit Rangnekar amitrangnekar@gmail.com
NMIMS-MBA-I (2007-08) Session-3- Segmentation, Targeting, Positioning, Differentiation

• Friendly salesmen-Eureka Forbes • Value-Dollar Shops, Factory outlets


• Reach-HLL, Glaxo,Colgate • Tourism-Goa, Kerala, Rajasthan
• Kids-McDonalds, Esselworld, J&J • Headache-Saridon/Anacin
• Indian MNC-Ranbaxy, Infosys, Wipro
• Economy- Big Bazaar

Differentiation: how to compete (STP undertaken to help differentiate)


• Add set of meaningful & valuable differences to distinguish company’s offering from competitor’s
• By form / features- Coke bottle shape, Heinz thick ketchup, BMW auto park, Vertu-Concierge
• Identify tangible differences between brand & competitors-conscious, rational benefits like
PQRSTUV-, Performance (Nokia), Quality (Sony), Rate (Big Bazaar), Range (Maruti, Vijay Sales),
Service (ICICI Bank), Technology (HP), Utility (Bata), Value(Titan),Convenience (EMIs, Loan terms)
• Intangible Benefits - emotional, sub-conscious benefits the brand owns like Status (Benz, Bose
Speakers) or House value (Armani, Rolex)- most important leverage for brand dominance
• For services, key differentiator is ease of ordering
• Sustainable advantages- Brand perception as unique (Sony Trinitron), sustainable customer
benefit, difficult for competitors to substitute (Amul Price, Toyota low cost)

Differential variables
Brand Service People Channel Image
Performance Delivery Response Coverage Symbol
Features Convenience Competence Performance Trust

Differentiation Criteria- Important, Distinctive, Superior, Preemptive, Affordable, Profitable

Summary

Case- STPD for New Brand Launch- - Kingfisher Airlines


Segmentation Status Conscious Air Traveller, SEC-Upper middle, HHI 25k+, Wired, Professional
Targeting YUP, Executives, Family
Passengers not really economy conscious but seeking an airline commensurate with their
standing / status, who love to be pampered, are price insensitive, seek a pleasurable in-
flight ambience and experience.
More reason for Kingfisher to increase prices later.
Positioning Kingfisher Class, A never before experience, Funliner
Differentiation One Class, No male pursers, Brand New A320s, Personalised video screens with 5
Channels, 10 Kingfisher Radio channels
Pricing Value
Promotion Print, Outdoor, Electronic, Virtual
Place On line, Home delivery in Mumbai / Delhi, Travel agents
Branding Unallied Brand Extension, Kingfisher perceived as the king of good times- airline naturally
extends to ‘Fly the good times’
Advantages Great food, service, ambience, comfortable seats, gifts. Can revolutionise if consistent
Weaknesses Cost intensive industry, high operational costs, strategy should be sustainable. History of
past failures of such airlines in India
Future International foray, DeccanAir stake to cover lower end, push kingfisher to premium

Marketing I (Concepts & Environment) Amit Rangnekar amitrangnekar@gmail.com