Prepared by Dr.Lakshmi.

H
 UNIT II
MARKET SEGMENTATION, TARGETING, DIFFERENTIATION & POSITIONING

❖Market segmentation –Concept of Market Segmentation, Benefits, Requisites of

Effective Segmentation, Bases for Segmenting Consumer Markets
❖Market Targeting – Evaluating Market Segments; Selecting Target Market Segments
❖Differentiation & Positioning for competitive Advantage –Meaning, Positioning Maps,
Choosing a Differentiation & Positioning Strategy
❖Product Management: Introduction to Product –Concept, Products Experience; Levels of
products, Product classifications
❖Branding: Concept of Branding, Types, Brand Equity,.
❖Product Classification: Individual Product Decisions, Product Line Decisions,
❖New Product Development Strategy: New Product Development Strategies and
Product Extension Strategies; Product Life Cycle Strategies
❖Packaging: Packing as a Marketing tool, Role of Labeling in packing.
 MARKET SEGMENTATION
•Concept:
•A market segment consists of a group of customers who share similar sets of
needs & wants
•Marketer’s task is to identify the appropriate number & nature of market
segments & decide which one(s) to target
 REQUISITES OF EFFECTIVE SEGMENTATION
1. Measurability: size, purchasing power, profiling of the segment & growth of the
segment can be measured. Opportunities for growth. Eg: smartphones, online
shopping
2. Accessibility: reaching the target audience- effective communication tools
3. Substantiality: size of the market- purchasing power & range of profit should
be measured
4. Differentiable: segments are distinguishable and respond differently to
different communication from the company
5. Actionable: effective programs can be designed for attracting and serving
segments- deploying enough resources for each segment
 BENEFITS OF SEGMENTATION
1. Identification of segments allows companies to know whom to analyse and
understand potential & actual customers
2. Tailored marketing programs- specific products
3. Assess the potential demand for its products
4. Knowledge about competing products in the market
5. Increase in sales in market
6. Allows companies to position the product according to the needs and wants of
customers
7. Identifying the opportunities
 MARKET AGGREGATION
•Form of undifferentiated marketing in which all customers are treated as a single
group & are handled in same manner
•Reduced cost in marketing the product
•Eg: toothpaste, detergents, bathing soaps
•Disadvantage- difficult to satisfy needs & wants of the customer in total market
•Advantage- more opportunities- larger market
•Eg: niche marketing & MS products (home basic, ultimate, professional)
 INTER MARKET SEGMENTATION
•Also called as Cross Market Segmentation
•Forming segments of consumers who have similar needs and buying behavior
even though they are located in different countries
•Eg: luxury brands
 BASIS FOR SEGMENTATION
1.Region (north, 1.Age & life 1.Social class 1.Occasions
Geographic

Behavioral
Demographic

Psychographic
east, west & cycle, (upper, lower), (regular special)
south),
2.Lifestyle (trend
2.Family size, 2.Benefits (qlty,
2.City (tier 1,2,3), setter, adapter,
service,
3.Gender follower)
3.Rural economy &
(population over 4.Income, 3.Personality speed),
10,000) & semi
5.Education, 3.User status,
urban areas, small
owns (20,000 to 6.Occupation etc 4.Usage rate,
50,000)
5.Loyalty status
 GEOGRAPHIC SEGMENTATION
•Divides the market into geographical units such as
nations, states, region, cities or neighborhood, ZIP
code, City, Country, Radius around a certain
location, Climate, Urban or rural
•Company can operate one or few areas or on all,
but pay attention to local variants
•Tailor made programs- needs & wants of the local
consumer groups- trading areas, neighborhoods &
individual stores- “grassroot marketing”
•Eg: banks- relationship executives
•Geographical markets- vary their products
preferences & requirements. Eg: north extreme
climates, south- brewed coffee, other regions tea
(different blends of coffee)
 DEMOGRAPHIC SEGMENTATION
•Division of market based on age & life cycle, family size, gender, income,
education, occupation , nationality & social class
•Age & life cycle: consumer wants & abilities- changes with age.
•Products like toys, books, magazines, video games, chocolates, candies, fruit
juice- target children.
•Youngsters- social networking, processed food.
•Older audience- spiritual channels. Jewellers for office goers, titan watches- zoop
Life stage: buying patterns change as a person gets aged.
Eg: newly married- setting up house, new born baby, elder people etc. Eg: smart
phones for different purpose, airtel services

Gender: men & women has different attitudes based on genetic setup &
socialization.
Differentiation based on clothing, hairstyling, cosmetics, fashion accessories &
magazines. Eg: Axe, Hero Honda Pleasure, Fairness Creams, Shampoos etc
4. Income: income determines the ability of consumers to participate in the market
exchange & hence its is a basic segmentation variable. Eg: rolex, tag heuer, titan
xylys, shampoo sachets etc
5. Socio economic classification: classification based on 2 levels- education level
& occupation of the head of the household. Rural 4 sections R1,R2,R3,R4

6. Generation: younger generation- initiators & influencers. Social networks

 PSYCHOGRAPHIC SEGMENTATION
•Psychographics- science of using psychology &
demographics to better understand consumers
•Psychographic segmentation- consumers are
divided into groups on the basis of
psychological/ personality traits, values &
lifestyle
•VALS system:
•VALS signifies values & lifestyles- divides
consumer into 8 primary groups based on the
response to a questionnaire- 4 demographic &
35 attitudinal questions
 Inno

VALS FRAMEWORK
vator
s High resources
Primary High
motivation innovation

Expe
Consumers are inspired by 3 motives: Think Achi rienc
ers evers ers
1. Ideals (guided by knowledge &
principles),
2. Achievement (motivated by product Belie Striv Make
look- demonstrate success to peers) & vers ers rs

3. Self expression (innovativeness, self

confidence, leadership etc)
Low
Survi resources
vors Low
innovation
 4 groups with HIGHER RESOURCES are: 4 groups with LOWER RESOURCES are:

1. Innovators: successful, sophisticated, 1. Believers: conservative traditional people

active, “take charge” with high self
esteem, niche oriented products 2. Strivers: trendy fun loving people-
resource constrained- purchase of greater
2. Thinkers: matured, satisfied & material wealth
reflective people motivated by ideals-
values order, knowledge & 3. Makers: practical, down to earth- self
responsibility- value in products sufficient

3. Achievers: successful, goal oriented 4. Survivors: elderly. Passive people-

people- favor premium products concerned about change- loyal to their
demonstrate success to the peers brands

4. Experiencers: young, enthusiastic

people- seek variety & excitement
 BEHAVIOURAL SEGMENTATION
Marketers divide buyers into groups on the basis of their knowledge of, attitude
towards, use of, or response to a product
1. Needs & benefits: Dettol- complete protection, L'oreal paris, surf excel quick wash
2. Decision roles: 5roles: initiator, influence, decider, buyer & user
Pharmaceutical- doctors- sales rep influences doctors, women- household, provisions.
Kids- different product category
3. User & usage:
i. Benefit sought: benefits seek from the product like looks, durability, price
ii. Product use rate: non users, ex users, first time users & regular users,
iii. Occasions: greeting cards, festive gifts (durable products). Eg: diary milk
celebrations
iv. Volume: Quantities of Purchase
v. Brand Loyalty:
Hardcore loyals- one brand @ all time
Split loyals: 2 or3 brands
Shifting loyals: shift from one brand to another
Switchers: no loyalty to any brand
 VOLUME SEGMENTATION
Volume segmentation refers to quantity of purchase, actual or potential
Consumers are segmented based on heavy users, light users or medium users
Consumers are segmented into bulk buyers, small scale buyers, regular buyers
and one time buyers
Company treats each segment differently. Strategies are formulated accordingly
1. Purchase occasion: consumers are segmented based on occasion, whether they
are regular buyers or occasion based buyers
2. Attitude towards product: whether consumers are enthusiastic, indifferent or
negative in their attitude towards product
Loyalty to the brand: extent of brand loyalty on the part of consumers based on
their buying behavior
Buying behavior segmentation: very useful for new products (introductory or
establishing stage)
 DEEP SEGMENTATION
•Another form of segmentation where segmentation is
done more deeper and sharper
•Market Gridding:
•It is an analytical technique, which facilitates dividing
market into segments
•Gridding disaggregates the market based on “distinctions
in the function served by the product”
•Eg: Air conditioners:
•Room conditioners
•Central air conditioning
•Industrial air conditioning
•Transport air conditioning
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 TARGET MARKET
•A set buyers sharing common needs or characteristics
that company decides to serve.
1. What makes product unique??
2. Whom to sell it??
3. Why should people buy the product or service from
you?- strong logistics, on time delivery, store open
for long hours
If above 3 questions are answered then
1. Focus on the primary market
2. Research your market
•Demographics
•Publications
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•Potential customer
EVALUATING MARKET SEGMENTS
•Once the firm has identified its market-segment opportunities, it has to
decide how many and which ones to target.
•Marketers are combining several variables in and effort to identify smaller,
better-defined target groups.
•A target market refers to a group of potential customers to whom a
company wants to sell its products and services.
•This group also includes specific customers to whom a company directs its
marketing efforts.
•A target market is one part of the total market for a good or service.
•Consumers who make up a target market share similar characteristics
including buying geography, buying power, demographics, and incomes
SELECTING TARGET MARKET SEGMENTS
•Market Targeting can be carried out at
several levels.
•Companies target:
•Very broadly (Undifferentiated)
•Very narrowly (Micromarketing)
•Somewhere in between (Differentiated
or concentrated marketing)

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 SELECTING TARGET MARKET SEGMENTS
1. Undifferentiated marketing strategy or mass marketing strategy:

Common Single
marketing undifferentiated
program market

•Market program- entire market.

•Strategy- overall marketing cost is low
•easier to track the market forces uniformly
•Tries to find out commonalities- then segments. Eg: rice, staples, petrol etc
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26 2. DIFFERENTIATED MARKETING STRATEGY
•Cater different segments of people-
Marketing mix Segment 1 cater higher sales-dominant position in
1
each segment
•Eg: automobiles, mobile phones
Marketing mix
Segment 2
2

Marketing mix
Segment 3
3
 3. CONCENTRATED MARKETING STRATEGY
Segment A
Focused
marketing Segment B
program

Segment C

•Companies decide to enter selected markets- instead of available markets. Niche

marketing
•Gather market share in small markets against strong & large competitors
•Eg: sports channels STAR Sports, ESPN, STAR Cricket etc
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4. MICRO MARKETING
•Micro marketing is the practice of tailoring products and
service according to the needs and wants of specific
individuals and locations
•Advertising efforts are focused on a small group of highly
targeted consumers.
•Micro-marketing requires a company to narrowly define an
audience by a specific characteristic, such as ZIP code or job
title, and tailor campaigns for that particular segment.
Two types:
1. Local Marketing &
2. Individual Marketing
 1. Local Marketing: 2. Individual Marketing:

•It involves tailoring brands and •Tailoring products and marketing

promotions the needs and wants programs to the needs and preferences of
of local customer group individual customer
•Eg: mobile phones with GPS, Store •Also called as one to one marketing/
locators customized marketing
•Eg: Nike ID website- personalized sneakers
•Customized T shirts, coffee mugs

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 POSITIONING
•Positioning is an act of designing a company’s offering and image to occupy a
distinctive place in the minds of the target market
•A good brand positioning helps guide, marketing strategy by clarifying the brand’s
essence, identifying the goals it helps the consumer achieve & showing how it does
so in a unique way
•Eg: Colgate, Fevicol etc

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 POSITIONING MAPS
•Perceptual positioning maps shows
consumers perceptions of their brands vs
competing products on important buying
dimensions
•Position of each circle on the map indicates
the brand’s perceived positioning
CHOOSING A DIFFERENTIATION & POSITIONING
STRATEGY
•Each firm must differentiate its offer by building unique bundle of benefits
that appeals to substantial group within the segment
•Brand positioning must serve the needs and preference of well defined
targets markets
•The differentiation and positioning task consist of 3 steps:
1. Identifying possible value differences and competitive advantages
2. Choosing right competitive advantage
3. Selecting overall positioning strategy
1. IDENTIFYING POSSIBLE VALUE DIFFERENCES AND
COMPETITIVE ADVANTAGES
•Competitive Advantage:
•An advantage over competitors gained by offering greater customer value, either
through lower prices or by providing more benefits that justify higher prices.

Customer needs

Deliver more
customer value Profitable Competitive Advantage
relationships
Extent of company
differentiation and
positioning
COMPANIES DIFFERENTIATION THEMSELVES AS
FOLLOWS:
Service differentiation
Designing a better and faster delivery system-
Product differentiation more effective & efficient solutions. First
Differentiated on features, Reliability: On Time Delivery,
performance, style and design. Resilience: Handling Emergencies, Product
Eg: Bose speakers, recalls, inquiries
Innovativeness: better information systems,
barcoding, order tracking system etc

People/ Image differentiation

Channel differentiation
Companies crafting powerful,
Companies effectively design their
compelling images that appeals
distribution channels- Wal-Mart &
to consumer’s social &
Nirma, Eureka forbes, Amway (Direct
psychological needs. Eg: color of
marketing)
McD, blue colour in Pepsi etc
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1. CHOOSING RIGHT COMPETITIVE ADVANTAGE
1. How many difference to promote?
•Company should develop an unique selling proposition (USP) for each brand and stick
to it.
•Eg: Same day delivery, Cash back, Cash on delivery, Easy returns, no cost EMI, buy now
pay later
2. Which differences to promote?

Important • The difference delivers a highly valued befit to

target buyers

Distinctive • Company can offer their products in distinctive way

Superior • Difference that is superior to other ways that

customers might obtain the same benfit

Communicable • Difference should be communicable and visible to

the buyers

Preemeptive • Companies cannot easily copy the difference

Affordable • Buyers can afford tp pay the difference

Profitable • Companies can introduce the difference profitably

 2. SELECTING AN OVERALL POSITIONING STRATEGY
•Value proposition is the full mix of benefits upon which the brand is differentiated
and positioned
1. More for More:
•“More For More” positioning involves providing
the most upscale product or service and charging
higher prices to cover the higher cost.
•Brands claim craftsmanship, superior quality,
durability, performance or style and charges price
to match.
•Offering is not only high in quality but also gives
prestige to the buyer.
•Sells “only the best” in every product and service
category.
•Companies should use this strategy for under
developed product category, else cannot sustain,
threat of cloned products at cheaper price
2. More for the same:
•Companies can attack competitor’s more for more positioning b y introducing a
brand offering comparable quality with lower price
•Eg: Xiaomi, One plus vs Apple
3. The Same for Less:
•Companies “Offering Same for Less” can be powerful value proposition
•Discount stores like Walmart, Big bazaar
•Companies don’t claim to offer different or better products, instead they offer
superior purchasing power and deep discounts
4. Less for Much Less:
• Market almost exist for products that offer less and cost less.
•Few customers wants best in everything they buy
•Consumers will gladly settle for less optimal performance and exchange for lower price
5. More for Less:
•Many companies claim to do “More for Less”
•Companies deliver more for less value.
•Eg: Tata Cars
 3. DEVELOPING A POSITIONING STATEMENT
• Positioning Statement:
•A Statement that summarises company or brand positioning to address:
1. Target Segment
2. Need
3. Point of difference
Eg: Dove, Fevicol, Blackberry
 PRODUCT
❖Product is anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a want need
❖The product is the total package of benefits the customer receives when he or she buys.
❖Products are almost always combinations of the tangible and intangible.
PRODUCTS SERVICE AND EXPERIENCES
• Company’s product offering often includes both tangible

Products
goods and service
• Some companies offer pure tangible goods, no service is
required
• Eg: Soap, toothpaste

Service • Few companies offer pure services- primarily service

• Eg: Doctor’s service, Banks

Experience • Experience have been important for marketing

• Eg: Wonderla, Disney land, PVR Inox
PRODUCT LEVELS: THREE LEVELS
Augmented Product

Actual Product

Brand
Features
Name
Delivery
Core After
&
A
Customer Sales
Credit
Value Service
Quality Design
Level
Product Packaging
& Warranty
Support
PRODUCT LEVELS
1. Core Customer Value:
❖Addresses the question What is the buyer really buying?- customer is really
buying.
❖Eg: hotel- food, ambience, comfort, good service
2. Actual product:
❖2nd level, Companies develop product and service features, design, quality,
brand name and packaging
❖Set of attributes- customer generally expects- purchase of product.
3. Augmented product:
❖It is the core benefit and actual product by offering additional features,
attributes, benefits, and service -exceeding customer expectations
 PRODUCT AND SERVICE CLASSIFICATIONS
1. Consumer Product:
❖A product by final consumer for personal consumption
2. Industrial Product:
❖ A product bought by individuals and organizations for further processing or for
use in conducting business
 PRODUCT
CLASSIFICATION
INDIVIDUAL PRODUCT DECISIONS

Product
Support
Labeling services
Packaging
Branding
Product
attributes
1. PRODUCT AND SERVICE ATTRIBUTES
i. Product Quality:
❖American Society defined Quality as “the characteristics of product or service that
bear on its ability to satisfy stated or implied customer needs”.
❖Product Quality has 2 dimensions:
Ability of a product to
Performance Quality perform its function
Eg: Rolls Royce

1.Quality Level
It means products free
from defects and
Conformance Quality consistently delivering
targeted level of
performance
ii. Product Features:
❖Product can be offered with various features
❖Companies then asses each feature’s value to customer vs its cost to the company
❖Features that customer value highly in relation to cost should be added.
iii. Product Style & Design:
❖Design is larger concept than style

Style Design
Simply describes the appearance of a product Design begins with deep understanding of
customer needs
Grabs attention and produce pleasing aesthetics Good design contributes product’s usefulness
iv. Branding:
❖A brand is name, term, sign, symbol, or design, or a combination of them,
intended to identify the goods or services of one seller or group of sellers and to
differentiate them from those of competition.”
iv. Packaging:
❖Packaging is defined as all the activities of designing and producing the container for
the product.
v. Labelling:
❖The label may be a simple tag attached to the product or an elaborately designed
graphic that is part of the package.
vi. Product Support services:
❖Company’s offer usually include support services which can be minor or major part
of the total offering.
❖Eg: Fedex, DHL, HP Care
 PRODUCT LINE DECISIONS
❖A product line is a group of products that are closely related, because they perform
a similar function, are sold to the same customer groups, are marketed through
the same channels or fall within the given price ranges.
❖The product mix may be composed of several product lines.
❖Product line analysis:
❖Product line managers need to know the sales and profits of each item in their line in
order to determine which items to build, maintain, harvest, or divest.
❖They also need to understand each product’s market profile, i.e. how their product
line is positioned against competitors’ product lines (The Product Map).
 PRODUCT LINE LENGTH
•Line stretching: occurs when company lengthen its product line beyond its current range.
1. Down market Stretching: occurs when company wishes to tie up with lower end competitors.
Uses the parents brand name. eg: Britannia tiger biscuits,
2. Up market Stretching: companies wishes to enter high end of the market to achieve more
growth
3. Two Way Stretching: consumers serving the middle market. Eg: Nokia, Samsung, Fastrack-
variety of products, price range
4. Filling in the Product Line: adding more items within the
present range of line
5. Product Line Modernization: upgrading products- intel, antivirus s/w, Microsoft
6. Product Line Featuring: flagship brand
7. Product Line Pruning: cutting/ stopping the brands
 PRODUCT MIX STRATEGIES
❖A Product Mix (also called Product Assortment) is the set of all products and items that a
particular seller offers for sale.
❖A total group of products that an organization markets.
❖A company’s product mix has a certain width, length, depth and consistency.
❖Dimensions of Product Mix:
1. The width of company’s (say HUL’s) product mix refers to how many different
product lines the company carries, such as bathing soap, detergents, shampoos,
toothpaste, food products.
2. The length of a company’s product mix refers to the total number of items in its
product mix.
❖Thus in each of the product line HUL has a number of product items.
❖Eg.in the product line of bathing soaps, HUL has several product items like Lux, Liril,
Lifebuoy, Pears.
Width of
Product Mix

Product Line
length of
3. The depth of a company’s product mix refers to how many variants , shades,
models, pack sizes are offered of each product in the line.
4. Product/ SKU: SKU (Stock Keeping Unit) denotes independent item of a product
offered for sale.
•Eg: Dove shampoo is offered in 200 ml, 150ml and 5 ml sachet
•Thus if dove comes in three formulations and in three sizes, Dove has a SKU of nine
(3x3).
5. The Consistency of the product mix refers to how closely related the various
product lines are in end-use, production requirements, distribution channels, or
some other way.
•HUL’s product lines are consistent in so far as they are consumer goods that go
through the same distribution channels.
BRANDING
 WHAT IS A BRAND?
A brand is name, term, sign, symbol, or design, or a combination of them,
intended to identify the goods or services of one seller or group of sellers and
to differentiate them from those of competition.”

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 TYPES OF BRAND (TAPAN K PANDA PG 357)
1. Manufacturer’s Brand : It is a brand owned by manufacturer or producer.
2. Private Brand : Private brands or private label brands are brand names placed
on products marketed by wholesalers and retailers. Eg: Stop brand apparel of
Shoppers stop, more, reliance.
3. Family brand : It is a brand name that identifies several related products.
Eg.Godrej, HUL, P&G, Videocon Brand.
4. Individual Brand : These are unique brand names that identify a specific
offering within a firm’s product line. Eg: Surf, Ariel, gillete

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 BRAND EQUITY
❖Brand equity is defined as the added value endowed on products & services.
❖It may be reflected in the way consumers feels, think, act with respect to the brand
as well as prices, market share & profitability
❖Customer based brand equity- customer reacts more favorably to the brand and
identifies- positive brand equity.
❖Negative brand equity- vice versa

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 NEW PRODUCT
DEVELOPMENT STRATEGY
CLASSIFICATION OF NEW PRODUCTS
New products are classified into 2 types:
1. Intrinsically new products (new to the world)
2. New products that represent marketing oriented modifications of existing
products
New Product Development
Idea screening Concept Market strategy
Idea generation development
Choosing best development &
Is the idea idea- compatible testing Any cost effective
worth with companies marketing
objectives & Good concept strategy
considering?
goals for consumers

Make future
YES plans

Product
Commercializatio
Market testing development
n Business analysis
Have the product Is the product
Product sales met the sales
Will product meet
technically & our profit or goal?
meeting expectations? commercially
expectations?
sound product?
 Stages In New Product Development
1. Generating new product ideas: 2. Idea Screening:
• New product ideas may emanate • Is there a felt need for new product?
from:
• Is it an improvement over the existing
• Company’s R & D product?
• Company's Market Research • Is it close to our current lines of business?
Or totally a new line?
• Employees, suggestion schemes,
• Can existing production & marketing
• Cross functional teams organizations handle the product?
• External research organization
• Sometimes idea emerge as Natural
happening”
3. Concept development & testing: 4. Market Analysis:
• After screening, new product idea is • Estimation of demand for new products.
subjected to “Concept Done on the basis of 2 methods:
Development” and “Concept
Testing” i. Substitution method:
• Selected idea is shaped into a • New product generally displaces old
Product Concept- what the proposed product/ pattern
product will do, how it will look like,
features • Demand estimation/ forecasting is done
• Concept testing: when a totally new ii. End use method:
product- in contrast to “me too” • Define new end use and locate potential
product is being planned for customers
introduction. Eg: Google Glass
• Simulation technologies or software
plays a vital role in new product
development
5. Business/Market analysis: 7. Market testing:
• Decide on financial aspects & • New products has to be tried in
market point of view select market segments
• Project’s overall impact on • Previous step to full scale
corporate’s financial position, manufacturing
estimate is made only on reliable
information aspects 8. Commercialization:
6. Product development: • Company decides large scale
manufacturing based on the previous
• Pilot production facility is set up. stage
• Active team for developing • Company commercialize the new
product, production, marketing product with required manufacturing
is involved & marketing
PRODUCT LIFE CYCLE
•A company’s positioning & differentiation strategy must change as the product, market &
competitors change over the PLC
•Product life cycle has to assert 4 things:
1. Products have limited life
2. Product sales pass through distinct stages, each posing different challenges, opportunities
& problems to the seller
3. Profits rise & fall at different stages of PLC
4. Product require different marketing, finance, HR , manufacturing, purchasing strategies in
each life cycle stage
•It is a Bell shaped curve
• There are 4 Stages:
•Introduction, growth, maturity, decline
 PRODUCT LIFE CYCLE
1. Introduction: slow sales growth
as the product is new to the
market- no profit- heavy expense
- product intro- skimming &
penetration
pricing strategies
•Eg: Maggi- instant noodles- working
women & children- affordable
pricing- no competitors promotion-
gift for empty wrappers
2. Growth: period of rapid market share 3. Maturity: slowdown in sales growth-
acceptance- profit improvement.
products accepted by most potential
•It improves product quality and adds new buyers. Profits stabilize or decline-
product features and improved styling. increased competition
•It adds new models and flanker products 1. Market Modification (expand
(i.e., products of different sizes, flavors, users)
and so forth that protect the main product
). 2. Product Modification (quality,
•It enters new market segments. feature & style improvement)
3. Marketing Mix Modification
•It increases its distribution coverage and (Prices, Distribution, Advertising,
enters new distribution channels.
Sales Promotion, Personal Selling,
•It lowers prices to attract the next layer of Services)
price-sensitive buyers.
Horizontal integration, vertical integration,
conglomerate & concentric diversification
4. Decline: sales show downward drift & profits erode
1. Go Strategy
i. Concentration Strategy:
• Decreasing the firm’s investment level selectively, by dropping unprofitable
customer groups, while simultaneously strengthening the firm’s investment in
lucrative niches.
ii. Harvesting Strategy:
• Divesting the business quickly by disposing of its assets as advantageously as
possible.
2. The Drop Strategy
• If the company cannot find any buyers, it must decide whether to liquidate the
brand quickly or slowly
 PACKAGING
•Packaging is defined as all the activities of designing
and producing the container for the product.
•Packages might include up to 3 levels of material.
•Bottle of a cologne is primary package, cardboard
box is secondary package and box containing half a
dozen bottle is shipping package.
Well designed package create convenience and
promotional value.
•The package is the
buyer’s first encounter with product.
•Package is the last communication with the customer.
Well designed package create convenience and promotional value.
•The package is the
buyer’s first encounter with product.
•Package is the last communication with the customer.
ROLE OF LABELING IN PACKAGING
•Sellers must label product.
•The label may be a simple tag attached to the product or an
elaborately designed graphic that is part of the package.
•Labels eventually become outmoded and need freshening up.
Functions of Label
•Label identifies the product or brand.
•Label might also grade the product .
•Label might describe the product like who made it , when it was made
, what it contains , how it is to be used and how to use it safely.
•Label may promote the product through attractive graphics.
UNIT QUESTIONS
❖Market segmentation & Benefits, ❖Product classifications
❖Requisites of Effective Segmentation, ❖Concept of Branding, Types, Brand Equity
❖Bases for Segmenting Consumer Markets ❖Individual Product Decisions,
❖Market Targeting ❖Product Line Decisions,
❖Selecting Target Market Segments
❖Packaging
❖Differentiation & Positioning for
competitive Advantage –Meaning, ❖Packing as a Marketing tool

❖Positioning Maps, ❖Role of Labeling in packing

❖Product Concept, ❖New Product Development Strategy

❖Products Experience; ❖Product Life Cycle Strategies

❖Levels of products,