Horlicks- A leading food drink

brand

 GSK (GloxoSmithKline is a British Company)

The company has been able to serve wide
segment base ranging from children, adults to
elderly people through its regular flavor as
well as through cardamom, chocolate and
vanilla flavors.
Why the company expanded the market and
achieved growth?

 Because they adapted a more focused

approach through market segmentation and
targeting, using specifically formulated
products in different segments.
1

.Junior Horlicks 1-2-3

Targeted at Pre -school children

Mothers Horlicks

Targeted at pregnant women and

nursing mothers

Horlicks women

Working women

Horlicks lite

Calorie sensitive and health

conscious

 To reach a product or service to the right

person or company, a marketer would firstly
segment the market, then target a single
segment or series of segments, and finally
position within the segment(s).
In todays highly competitive environment
these three is required for gaining competitive
advantage.

 The business organization instead of

competing everywhere to cope with the entire
market, may decide to identify those markets
or territories of markets which can be served
with the most effectively by offering them
correct products and matching needs and long
term business and consumer interests are
served in the most desired manner. thus the
firm breaks up the market into smaller units.

STP
Segmentation, targeting, and positioning
together comprise a three stage process.
We first (1) determine which kinds of customers
exist, then (2) select which ones we are best off
trying to serve and, finally, (3) implement our
segmentation
by
optimizing
our
products/services for that segment and
communicating that we have made the choice to
distinguish ourselves that way.

Market Segmentation
Market segmentation is the
process of dividing a
heterogeneous market(non
uniform) into homogenous
(uniform) markets with
similar characteristics .
Segmentation
involves
finding out what kinds of
consumers with different
needs exist.

Why Segmentation is Necessary

Consumer needs differs
Differentiation
helps
products compete
Segmentation
helps
identify media
To identify the gaps
(opportunities) in the
market
To help identifying
repositioning
requirements

 Not all consumers are alike different

customers have different needs.
By segmenting the market and choosing
target markets, companies can differentiate
their products to provide the benefits that the
segments desire.
Once a marketer has identified their segment,
they can choose media that is targeted to that
segment for their advertising.

Steps in market segmentation, targeting and

Positioning
Market Segmentation
Identify bases for segmenting the market
Develop segment profiles

Target Marketing
Develop measure of segment attractiveness
Select target segments

Market Positioning
Develop positioning for target segments
Develop a marketing mix for each segment

The Stages of STP

situational analysis (current
positions , objectives,
constraints)
Segmentationconsider variables for segmenting the market
Develop profiles of each segment
Targeting
Decide on targeting strategy based on potential and
effectiveness of each segment
Decide which and how many segments to be targeted
Positioning
Understand the customer perception
positioning products in the mind of customers

Develop the marketing mix

Bases of market segmentation

Bases of market
segmentation

Consumer personal
characteristics (non
behavioral)

S-E

Consumer responses
(behavioral)

Ben

Occasions

User
Status

Usage
Rate

loyal

Attitude

Readiness

Geographic Segmentation
Region

South, west, North , east

City

Class-I , class-II, Metros, Cities with population of 1 million, over

1 million

Rural and semi

urban

Rural villages, semi urban areas, small towns

 In case of MNC they can divide the global

market on the basis of continental
characteristics.
For eg- coco-cola may consider the entire Asia
as its market but for further business
operation it may divide Asia into south Asia,
middle east, far east etc

Demographic Segmentation

Age and
life stage

Gender

Income

Family
size

Age consumers wants and abilities change

with age. Many products like
Products

Targeted

Toys, books, digital games, candies, chocolates,

biscuits , fruit juices and packaged foods

Children and young people

Maggie noodles, potato chips, kurkure, internet and

social networking sites

Youngsters

Disney, Hungama channels

Children

Aastha, Sanskar

Spiritually inclined older audience

Discovery, national geographic

Interested audience in Education

and entertainment

Clearasil

Adolescents

Glucon D and other energy drinks

Youngsters and sports

enthusiastic

Age
Titan watches reentered the children's watch
market with the introduction of the brand
zoop
It targets 6-14 year old children by using the
design elements that reflect the preferences
of the target audiences.

Life stage
People with the same part of the life cycle
may differ in their life stage. Life stage defines
a persons major concern such as getting
married, deciding to buy a house, taking care
of older parents, marrying off his or her
children, planning for retirement and so on

Life stage
iBall Aasaan
iBall company has introduced
a handset specially targeted
our senior citizens under the
brand name iBall Aasaan. It
has a talking keyboard with
large buttons, display screen
has higher fonts, it has bright
LED torch with a dedicated
button, a special indicators for
incoming calls, alerts for low
battery and for missed calls. It
also has a sos button, when
switched on automatically
dials five numbers .

Perfect gift for elders

Gender
Men
More self expressive and
goal oriented
Men focus on the part of
the environment that helps
them achieve the goal
Men need to be invited to
touch a product
Men like to read product
information

Women
More communal minded
Women tend to take more
of data in their immediate
environment
Women are likely to pick a
product without prompting
Women may relate to a
product on a more personal
level

Gender
Men

Park Avenue- ready made

apparel from Raymond is
positioned as a masculine
brand.
Motorcycles are considered
to be for men

Women
Two wheeler brands such as
TVS Scooty , Bajaj wave,
kinetic Flyte, Honda Activa,

Both Men and women

TVS and Mahindra also targeted brands like wego and Rodeo for both men and
women
Van Heusen and Allen solly also have targeted the both
Emami both for men and women

Income
Even if two consumers have
similar income levels, each
may own different types and
brands of products based on a
host of factors like lifestyle,
values and attitudes.
With the increasing income
and growing no. of middle
class
people
luxury
wristwatch brands such as
TAG Heuer are increasing
their visibility and presence
in the Indian market

Socio-economic Segmentation
Education and occupation
Based on these two parameters, each household is
classified in one of 12 SEC groups A1, A2, A3, B1, B2, C1,
C2, D1, D2, E1, E2 and E3. These 12 groups are applicable to
both urban and rural India. With the growth of the
economy and of small towns and rural, it has become
imperative to look at a single SEC classification system for
both urban and rural India.
The SEC classification helps the marketers to identify
segments that have high consuming potential. The high
potential types: A1, A2, the medium ones and the bottom
of pyramid ones.
.

Psychographic Segmentation

Lifestyle
Personality traits
Psychological
Values

VALS segmentation framework

(innovators, thinkers, achievers and experiencers)
(Believers, strivers, makers and survivors)

EgThe market for wristwatches provides an illustration

of segmentation base on lifestyle parameters.
In India Titan watches have a wide range of sub
brands within their Titan range- Edge, Regalia,
Nebula,Raga to appeal to different lifestyle
segments.
The range of watches and accessories under the
brand name Fastrack appeals to youthful
segments
Sonata good-looking watch at an affordable
price

 Sonata is the value for money watch brand

from Titan industries. It is targeted at
consumers seeking durability and value with a
clear positioning of No compromise watch.

This brand was targeted towards the

youth

Raga watches at women in the

premium segment which gave
them the feeling of intimacy.

 Xylys comes from the House

of Titan, is targeting a new
generation of achievers who
are looking for symbols to
reflect their lifestyle, attitude,
moods and beliefs.
Nebula-precious
jewellery
watches from Titan. It is a
collection of intricately carved
designs for women inspired by
floral patterns and these
watches are engraved with
beautiful patterns in gold and
precious stones. This is for the
premium segment.

Behavioral segmentation
Marketers divides buyers into groups on the
basis of their knowledge of, attitude towards,
use of, response to a product.

Occasions
Segmenting on the basis of special occasions
or situations
Example Statements:
Whenever our daughter Jamie gets a raise, we
always take her out to dinner.
When Im away on business, I try to stay at a
suites hotel.
I always buy my wife flowers on Valentines Day.

Occasions
Greeting card

Festival seasons, special occasions

(Christmas, anniversaries, new year,
birthdays, valentine day)

Durable products

Two wheelers, TV, refrigerators are heavily

advertised during festive occasions

Chocolates , sweets and dry fruits

Specifically packed for festivals like Holi,

diwali etc

User status

Non users
Ex-users
Potential users
First time users
Regular users

Usage rate
Light
Medium
Heavy product users- high percentage of total
consumption

Benefit Segmentation
Segmenting on the basis of the most important
and meaningful benefit
( quality, speed, service and economy)
Eg- car (quality- Mercedes benz, service-bullet
proof, economy-maruti 800, specialty-Ferrari)

BENEFITS TOOTH PASTE

Benefit segmentation
Segmented on the basis of benefits sought by consumers
Toothpaste
General benefits that consumers seek are
cleanliness and hygiene in all segments.
Other key benefits are:-

Cosmetic

Protection against
foul smell, modernity
and cosmic value. EgColgate, Prudent

Fluoride

Herbal

Family health,
extra protection
for children. EgColgate Fluoride,
Cibaca Fluoride.

Family health and

welfare.
Traditionally good
for health.
Eg-Neem, Dabur.

Loyalty status
Hard core loyal- one brand all the time-egcolgate
Split of soft core loyal- loyal to two or three
brand.eg-Colgate switching between two
brands pepsodent and close-up
Shifting loyals- shift from one brand to another
Switchers- no loyalty to any brand

Readiness

Unaware
Aware
Informed
Interested
Desirous
Intending to buy

Attitude

Enthusiastic
Positive
Indifferent
Negative
Hostile (unfriendly /aggressive)

Eg-Attitude
Enthusiastic- impulsive purchases-carry cash
all the time . Need credit card
Positive
Indifferent- think a lot and pay cash for
purchases. technology averse (don't use credit
cards)
Negative- they will never go for credit card

Examples
Titan has segmented the watch market and
identified clearly the needs of each group.
Titan has segmented the market on the basis
of the following variables:
Non behavioral -Demographic (age,gender),
Psychographic (lifestyle and personality),
Behavioural (benefits and occasions,)

Segmentation
Geography
North
South
East
West
Taste
Salted
Mustard sting
Nimbu
Chilly

Plain Salted

Mustard Sting

Spicy Red/ Chilly

Nimbu Flavour

12 - 20
Years
> 50
Years

20-35
Years
35-50
Years

Demographic (Age Group)

Conservative,
reserved, shy
Outgoing,
Fun Loving,
Bindaas
Attitude / Behavior)

Plain
Salted

North

West

East

South

Indian Geography

Mustar
d Sting

Nimbu
flavor
Spicy /
Red Chilly

Taste

Segmentation:
Age Group
Attitude/Behavior
Geography
Taste

Targeting

Demographic (Age)

12-20
(Attitude/Behavior)

>50

Age
class

20-35
Conservative, reserved, shy

35-50

Outgoing, Fun loving, Bindass

Benefits of segmentation
Helps focusing strategies more sharply on target groups
Helps the company to know the demand pattern of each segment
Helps the marketers to understand the need, behavior, habits, tastes
and expectations of consumers of different segments
Marketing can be mores specialized if segmentation is done
Helps in adapting different policies, programmes for different markets
New customers are attracted because of this strategy (segmentation)
Support development of niche market
Customers are benefited as products that serve their interest and
satisfy their need
Better competitive position for existing brands

Requirements for Effective

Segmentation
Measurable
Size, purchasing power, and profile of segment

Accessible
Can be reached and served

Substantial
Large and profitable enough to serve

Differentiable
Respond differently

Actionable
Effective programs can be developed

Targeting
After the market has been separated into its
segments, the marketer will select a segment
or series of segments and 'target' it/them.
Resources and effort will be targeted at the
segment.

Target Marketing
Target Market
Consists of a set of buyers who share common
needs or characteristics that the company decides
to serve

Target Marketing
Evaluating Market Segments
Segment size and growth
Segment structural attractiveness

Level of competition
Substitute products
Power of buyers
Powerful suppliers

Company objectives and resources

Marketers should understand

First, how well are existing segments served
by other manufacturers? It will be more difficult to
appeal to a segment that is already well served than to
one whose needs are not currently being served well.
Secondly, how large is the segment, and how can we
expect it to grow? (Note that a downside to a large,
rapidly growing segment is that it tends to attract
competition).
Thirdly, do we have strengths as a company that will
help us appeal particularly to one group of
consumers?

 Evaluate the market segment on the basis of

porters five forces model
Select the market segment five patterns of
target market selection .

Strategies/patterns

 Single segment- Allahabad law book agency

(specialized in only law books) , BPB publication
specialized in computer books
(one particular product for one particular market)
Selective segment company z produces TV and
walkman (two different product for two different
markets)
Product specialization one product to different
markets eg- microscope to university lab, govt lab,
commercial lab
Market specialization-company specialized in home
appliances- TV, WM, Refrigerators. Micro ovens, fans
etc. for middle class people segment
Full market coverage very large firm adopts thisIBM, GE, coco cola

Full market coverage -Mass/Undifferentiated

marketing
Multiple segment- selective specialization, product

specialization and market specialization

(selective/Differentiated marketing)

Single segment -Niche/Concentrated marketing

Single segment concentration strategy

The firm selects a single segment or market and fully
concentrate its marketing efforts to try and seek maximum
advantage.

Car maker

Single marketing mix

Semi-luxury segment
(Expensive)
Small car
segment
(affordable,
less
expensive)

Luxury car
segment
(very
expensive)

Undifferentiated targeting strategy

Concentrated strategy

Differentiated strategy

Companies might
develop
one
marketing
mix
strategy that is
appropriate for all
members of the
total market.
Powder milk

 Example- coca-cola, Pepsi, thumps- up

Multi-segments strategy
Here the firm may select two or more then two or may be all
the segments and approach each segment with an
appropriate marketing mix programme.
Car maker

Marketing Mix

Small car segment

Marketing Mix

Semi-luxury
segment

Marketing Mix

Luxury segment

Undifferentiated targeting strategy

Concentrated strategy

Differentiated strategy

Exists when a firm

develops different
marketing mix
plans specially
tailored for each of
two or more
market segments.
P&G

Undifferentiated targeting strategy

Concentrated strategy

Differentiated strategy

Only
one
marketing mix is
developed
and
directed toward a
few, or perhaps
one,
profitable
market segments.
Mont Blanc pens

Choosing a Target Marketing Strategy

Considerations include:
Company resources
The degree of product variability
Products life-cycle stage
Market variability
Competitors marketing strategies

Criteria for Effective Targeting

Identifiable

Sizeable

Stable

Accessible

Congruent with the

companys objectives and
resources

 There are five criteria for effective targeting, as shown on

the slide. First of all, the target must be identifiable. This
means that the marketer must be able to see or find the
characteristic they have chosen for segmentation.
The segment must also be sizeable. It must be large
enough to be profitable to the marketer.
A stable segment means that the consumers are not
fickle and likely to change very quickly.
A group of consumers must be accessible to be targeted.
The marketer must be able to reach that market in an
affordable way.
Finally, the target must be congruent with the companys
objectives and resources.

Positioning

Positioning
Positioning:
The place the product occupies in consumers minds
relative to competing products.
Typically defined by consumers on the basis of important
attributes.
Involves implanting the brands unique benefits and
differentiation in the customers mind.
Positioning maps that plot perceptions of brands are
commonly used.

Positioning
Positioning of a product or service is creating
an image in the consumers mind.
Consumers generally buy images rather than
actual product.
Marketers mostly use advertising as a tool to
build up brand or corporate image.

Positioning Example
eBays positioning:
No
matter what it is, you can
find it on eBay!

Positioning of P&G Detergents

Brand

Positioning

Tide

Tough, powerful cleaning

Cheer

Tough cleaning, color protection

Bold

Detergent plus fabric softener

Gain

Sunshine scent and odor-removing formula

Era

Stain treatment and stain removal

Dash

Value brand

Oxydol

Bleach-boosted formula, whitening

Solo

Detergent and fabric softener in liquid form

Dreft
9
LOSnow
Ivory

Outstanding cleaning for baby clothes, safe

Ariel

Tough cleaner, aimed at Hispanic market

Fabric & skin safety on baby clothes

positioning
Physical positioning- physical product
characteristics
Perpetual positioning- endorsement of
celebrities
So a marketer has to create both physical and
perpetual differences

Bases of Positioning
Sl.
no.

Positioning

Definition

Advertising claims

1.

Customer
benefits

Associate a brand or product with customer

benefits

Benefit(s)
Eg-Maruti Suzuki-Most
efficient cars

2.

Price and
quality

A product is highlighted in terms of service

features or performance. Manufacturer
charges high price

Value for money

Eg-Jet Airways Premium
full service airline

3.

Application

Associating a product or service with a use

or application

Use or application of a
product or services.egodomos-safe protection
from mosquito bites

4.

Product user

Associating a product or service with a user

or class of users.

Cine stars or sports

heroes using the product.
Eg- Peter engliand- mid
proce formal wear
offering value for money
range for young men who
have just started their
career.

Positioning strategies
Sl.
no.
5

Positioning
strategy
Product class

Definition
Associating a product or
service in a particular
product class

Advertising claims

Liquid dishwasher with

dish wash bar

Cultural
symbols

Associating cultural
symbols with a product or
service to differentiate
from competitors product

Royal

Competitors

Associating with
competitors product or
service by comparison

Compares with
competitors brand
Colgate Vs.pepsodent

Positioning

Positioning by Product Attributes or customer BenefitsEg- Close-up is promised on fresh breath and cosmetic benefit
Promise is positioned on gum care
Colgate is positioned on fresh breath, decay prevention and taste
Positioning by price-quality-eg organic products

Positioning by product user- eg-Lakme position themselves

targeting fashion conscious women

Position by use of application eg-Odex for sprain and muscle

pains, vicks vaporub of child s cold.

Competing brands in the

health drinks market

Advertising claims

Complan

complete planned food

for growing children.
Contains 23 vital
nutrition

Horlicks

The great nourisher-with

extra calcium

Bournvita

Health strength and

energy.contains
protiens,vitamins,
menerals and
carbohydrates.

Boost

Energy Ah! Energy

Viva

Double action drink

Health drink
market

Health

Drink
Market

Product repositioning
In some cases products that are selling well are also
repositioned. This is done to enlarge the reach of the
product and increase the sale by appealing to a wider
target market.
Eg- milkmaid
Milkmaid was positioned as convenient form of milk for use
in tea and coffee. It repositioned in 1980 as a product for all
uses involving milk. For that a well planned advertisement
campaign was launched , repositioning milkmaid as an ideal
ingredient for a variety of sweets and other preparation, in
addition to daily use in tea and coffee.

Perceptual Mapping
A means of displaying or graphing, in two or
more dimensions, the location of products,
brands, or groups of products in customers
minds.

Choosing a Positioning Strategy

Topics
Identifying
possible
competitive advantages and
compare with competitors
products serving the same
target market
Choosing
the
right
competitive advantage
Choosing
a
positioning
strategy

Differentiation can be based on

Products
Services
Channels
People
Image

 Product Differentiation Service Differentiation

features, performance,
delivery,
installation,
style
&
design,
repair,
customer
attributes
training

 Channel Differentiation Image Differentiation

offering goods and
symbols, characters
services
in
more
convenient places
People Differentiation
hiring & training better
people
than
competitors do

Topics
Identifying possible
competitive advantages
Choosing the right
competitive advantage
Choosing a positioning
strategy

How many differences to

promote?
Unique selling proposition
Several benefits
Which differences to promote?
Criteria include:
Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable

Topics
Identifying possible
competitive advantages
Choosing the right
competitive advantage
Choosing a positioning
strategy

Value propositions represent the

full positioning of the brand