BY NIKHIL

Why Segmentation is required?

• Companies cannot connect with all customers in large, broad, or
diverse markets. But they can divide such markets into groups of
consumers or segments with distinct needs and wants. A company
then needs to identify which market segments it can serve effectively.
This decision requires a keen understanding of consumer behavior
and careful strategic thinking. To develop the best marketing plans,
managers need to understand what makes each segment unique and
different. Identifying and satisfying the right market segments is often
the key to marketing success.
Questions that marketers Analyze
• Who buys our product?
• Who does not buy it?
• What need or function does it serve?
• Is there a market need that is not being met by
current product/brand offerings?
• What problem does our product solve?
• What are customers buying to satisfy the need for
which our product is targeted(alternate products)?
• What price are they paying?
• When is the product purchased?
• Where is it purchased?
STP-SEGMENTATION-TARGETING-POSITIONING

• SEGMENTATION: Marketers identify distinct groups of buyers by

examining demographic, psychographic, and behavioral
differences among buyers.
• Not everyone likes the same cereal, restaurant, college, or movie.

• TARGETING: After identifying market segments, the marketer

decides which are its target markets(ONE SPECIFIC GROUP OF
SEGMENT TO TARGET).
• A target market is a specific group of potential customers who a
business aims to reach with its products or services.
STP-SEGMENTATION-TARGETING-POSITIONING
• POSITIONING: HOW YOU POSITION YOUR PRODUCT IN THE
CUSTOMERS MIND(IT SHOULD BE APPILING TO THE CUSTOMER).
• The firm develops a market offering that it positions in the minds of
the target buyers as delivering some central benefit.
• Volvo develops its cars for buyers to whom safety is a major
concern, positioning its vehicles as the safest a customer can buy.
Market Segmentation

Geographic
Nations, states,
regions or cities

Demographic
Age, gender, family size
and life cycle, or income

Psychographic
Social class, lifestyle,
or personality
Behavioral
Occasions, benefits,
uses, or responses
IDENTIFICATION OF MARKET SEGMENTS:
• Identifying a market segment requires the following three criteria:
• The main needs of a sub-group must be homogenous.
• Second, the segment must share distinct characteristics.
• Finally, the segment produces a similar response to marketing
techniques.
• Prospective buyers are grouped into various segments, often based
on how much value they place on a product or service
Example of a Market Segment:
• Consider a company that markets health and beauty products to
both men and women.
• These products, such as razors or skin care, are typically more
expensive for women than they are for men.
• The product packaging also differs—products targeted to women
having pinks and floral accents that align with gender stereotypes.
• On the other hand, the company's male-targeted products are
characterized by more rugged blacks and greys.
Consumer Clientele:
• These are individual customers who purchase goods or
services for their personal use or consumption.
• They make buying decisions based on personal preferences,
needs, and budget constraints.
• Consumer clientele can vary widely in demographics,
psychographics, and purchasing behaviors.
• Businesses targeting consumer clientele typically focus on
marketing strategies aimed at appealing to the emotions,
aspirations, and lifestyle choices of individual buyers.
• Examples of businesses serving consumer clientele include
retail stores, restaurants, entertainment venues, and online
shopping platforms
Institutional/Corporate Clientele:
• This category includes organizations, institutions, and businesses
that purchase goods or services for operational or commercial
purposes.
• Institutional clients may include government agencies, educational
institutions, healthcare providers, corporations, and non-profit
organizations.
• These clients often make purchasing decisions based on factors
such as cost-effectiveness, efficiency, quality, and alignment with
organizational objectives.
• Businesses catering to institutional or corporate clientele typically
engage in B2B (business-to-business) transactions, where products
or services are tailored to meet the specific needs and requirements
of organizational buyers.
• Examples of businesses serving institutional or corporate clientele
include manufacturers, wholesalers, business service providers, and
Summary:
• while consumer clientele are individual buyers making
purchases for personal use.
• institutional/corporate clientele represent organizations
procuring goods or services for operational or commercial
purposes.
• Businesses often develop distinct strategies and
approaches to effectively serve these different customer
segments
Segmenting Consumer Markets:
• Segmenting consumer markets involves dividing a heterogeneous market
into smaller, more manageable segments based on certain shared
characteristics, behaviors, or needs. By doing so, businesses can better
understand their customers and tailor their marketing strategies to target
specific segments more effectively. Here are some common approaches to
segmenting consumer markets:
1.Demographic Segmentation: This involves dividing the market based on
demographic factors such as age, gender, income, education, occupation,
marital status, family size, and ethnicity. For example, a company might
target different age groups with different products or marketing messages.
2.Psychographic Segmentation: This segmentation considers consumers'
lifestyles, values, attitudes, interests, and personality traits. Psychographic
segmentation helps businesses understand the motivations and
preferences that drive consumer behavior. For instance, a company might
target environmentally-conscious consumers with eco-friendly products.
Segmenting Consumer Markets:
3.Behavioral Segmentation: This approach segments consumers
based on their behaviors, such as usage rate, brand loyalty, purchase
occasions, benefits sought, and readiness to buy. By understanding
consumers' buying patterns and behaviors, businesses can develop
targeted marketing strategies. For example, a company might offer
loyalty rewards to frequent buyers.
4.Geographic Segmentation: This involves dividing the market
based on geographic boundaries such as region, country, city size,
climate, population density, or cultural factors. Geographic
segmentation helps businesses localize their marketing efforts to
better meet the needs of consumers in different regions. For instance,
a company might offer different product variations or promotions
based on regional preferences.
Segmenting Consumer Markets:
5. Usage-Based Segmentation: This segmentation categorizes consumers
based on how they use a product or service. Usage-based segmentation
considers factors such as usage frequency, usage occasion, and product
benefits sought. For example, a company might offer different product
features or packages for light users versus heavy users.
6. Benefit Segmentation: This approach focuses on the specific benefits or
solutions that consumers seek from a product or service. By identifying
different consumer needs and desires, businesses can develop targeted
marketing messages that highlight the benefits most relevant to each
segment. For instance, a company might emphasize convenience for one
segment and cost-effectiveness for another.
7. Hybrid Segmentation: Many businesses use a combination of
segmentation approaches to create more refined and meaningful market
segments. Hybrid segmentation allows businesses to consider multiple
factors simultaneously and develop tailored marketing strategies
accordingly.
Segmenting Consumer Markets
• Segmenting consumer markets helps businesses identify and
prioritize target segments, customize their marketing efforts,
improve customer satisfaction, and ultimately increase sales
and profitability. However, it's essential to regularly review and
update segmentation strategies to adapt to changing consumer
trends and market dynamics.
Segmentation basis:
•
Segmentation basis refers to the criteria or variables used to divide a
market into smaller, more homogeneous segments. These segmentation
bases help businesses identify distinct groups of consumers with similar
characteristics, behaviors, or needs. Here are some common
segmentation bases:

1.Demographic Segmentation: Dividing the market based on demographic

factors such as age, gender, income, education, occupation, marital status,
family size, and ethnicity.
2.Geographic Segmentation: Segmenting the market based on geographic
boundaries such as region, country, city size, climate, population density,
or cultural factors.
3.Psychographic Segmentation: Categorizing consumers based on their
lifestyles, values, attitudes, interests, personality traits, and psychographic
profiles.
4.Behavioral Segmentation: Dividing the market based on consumers'
behaviors, such as usage rate, brand loyalty, purchase occasions, benefits
Segmentation basis:
5.Usage-Based Segmentation: Segmenting consumers based on
how they use a product or service, including usage frequency, usage
occasion, and product benefits sought.
6.Benefit Segmentation: Categorizing consumers based on the
specific benefits or solutions they seek from a product or service.
7.Hybrid Segmentation: Combining multiple segmentation bases to
create more refined and meaningful market segments. Hybrid
segmentation allows businesses to consider various factors
simultaneously and develop tailored marketing strategies accordingly.
8.Socioeconomic Status (SES): Segmenting based on consumers'
socioeconomic status, which includes factors such as income,
occupation, education, and social class
Segmentation basis:
9.Generational Segmentation: Dividing the market based on
generational cohorts, such as Baby Boomers, Generation X,
Millennials, and Generation Z, each with distinct values, preferences,
and behaviors.
10.Loyalty Status: Segmenting consumers based on their level of
loyalty to a brand, product, or service, including loyal customers,
occasional buyers, and non-buyers.
11.Purchase History: Segmenting based on consumers' past
purchasing behavior, including frequency, recency, and monetary
value of purchases.
12.Life Stage: Segmenting based on consumers' life stages, such as
singles, couples, families with young children, empty nesters, and
retirees
EVALUATION AND SEGMENTATION OF TARGET
MARKETS:
•
Evaluation and segmentation of target markets are crucial steps
in developing a successful marketing strategy.
• 1. Market Analysis:
• Market Size and Growth: Assess the size and growth rate of
the overall market and specific segments within it.
• Market Trends: Identify trends, shifts, and emerging
opportunities in the market.
• Competitive Landscape: Analyze competitors, their market
share, strengths, weaknesses, and strategies.
EVALUATION AND SEGMENTATION OF TARGET
MARKETS:
• 2. Customer Analysis:
• Demographic Profile: Understand the demographic
characteristics of potential customers, such as age, gender,
income, education, occupation, etc.
• Psychographic Profile: Explore customers' lifestyles, values,
attitudes, interests, and personality traits.
• Behavioral Patterns: Examine buying behaviors, usage
patterns, brand preferences, and loyalty levels.
EVALUATION AND SEGMENTATION OF TARGET
MARKETS:
• 3. Segmentation:
• Identify Segmentation Bases: Choose relevant criteria
(demographic, psychographic, behavioral, etc.) to segment the
market.
• Segmentation Process: Use data analysis techniques (e.g.,
clustering algorithms, factor analysis) to group consumers into
distinct segments.
• Profile Segments: Develop detailed profiles for each segment,
including demographics, psychographics, behaviors, needs,
and preferences.
EVALUATION AND SEGMENTATION OF TARGET
MARKETS:
• 4. Targeting:
• Evaluate Segment Attractiveness: Assess the potential
profitability, growth potential, competition, and alignment with
the company's resources and objectives for each segment.
• Select Target Segments: Choose one or more segments to
focus on based on their attractiveness and fit with the
company's capabilities.
• Positioning Strategy: Develop a positioning strategy tailored
to each target segment's needs, perceptions, and preferences
EVALUATION AND SEGMENTATION OF TARGET
MARKETS:
• 5. Market Testing:
• Pilot Programs: Conduct pilot programs or small-scale tests to
assess the viability and acceptance of marketing strategies
within target segments.
• Market Research: Gather feedback through surveys, focus
groups, or observation to refine targeting and positioning
strategies
EVALUATION AND SEGMENTATION OF TARGET
MARKETS:
• 6. Performance Measurement:
• Key Performance Indicators (KPIs): Define metrics to
measure the effectiveness of targeting and segmentation
efforts, such as market share, customer acquisition cost,
customer retention rate, and profitability.
• Regular Monitoring: Continuously monitor market dynamics,
customer preferences, and competitive activities to adapt
targeting and segmentation strategies accordingly
EVALUATION AND SEGMENTATION OF TARGET
MARKETS:
• 7. Adjustment and Refinement:
• Iterative Process: Recognize that targeting and segmentation
are iterative processes that may require adjustments based on
changing market conditions, consumer preferences, and
competitive dynamics.
• Feedback Loop: Solicit feedback from customers, sales teams,
and other stakeholders to identify areas for improvement and
refine targeting and segmentation strategies over time.
• By following this systematic approach, businesses can
effectively evaluate target markets, segment them based on
relevant criteria, and develop targeted marketing strategies to
better meet the needs and preferences of different customer
groups.
positioning significance:
1.Competitive Differentiation: Positioning helps businesses
differentiate their products or services from those of
competitors. By highlighting unique features, benefits, or
attributes, businesses can carve out a distinct and favorable
position in the minds of consumers.
2.Target Audience Alignment: Effective positioning ensures that
products or services resonate with the needs, preferences, and
aspirations of the target audience. By understanding customer
segments and their motivations, businesses can tailor their
positioning to address specific customer needs and
preferences.
positioning significance:
3.Value Proposition Communication: Positioning
communicates the value proposition of a product or service to
customers. It articulates why the offering is superior or more
desirable compared to alternatives in the market, thereby
influencing purchasing decisions.
4.Brand Image and Perception: Positioning shapes the overall
perception and image of a brand in the minds of consumers. A
well-executed positioning strategy can enhance brand reputation,
credibility, and perceived value, leading to increased customer
loyalty and willingness to pay premium prices.
positioning significance:
5.Market Focus and Clarity: Positioning provides clarity and
focus for marketing efforts by defining the target market and
establishing a clear direction for messaging, product
development, and distribution strategies. It helps businesses
allocate resources effectively and pursue opportunities that align
with their positioning strategy.
6.Long-Term Growth and Sustainability: Consistent and
relevant positioning contributes to long-term growth and
sustainability by fostering strong relationships with customers
and building brand equity over time. It enables businesses to
withstand competitive pressures and maintain relevance in
evolving market conditions.
positioning significance:
7.Strategic Decision Making: Positioning guides strategic decision
making across various aspects of the business, including product
development, pricing, distribution channels, and promotional activities. It
serves as a framework for aligning organizational objectives with
customer needs and market dynamics.

positioning is significant because it shapes how a product or service is

perceived in the marketplace, influences consumer behavior, and drives
competitive advantage and long-term success for businesses. It is a
critical element of marketing strategy that requires careful planning,
execution, and monitoring to achieve desired outcomes.
Developing and communicating a positioning
strategy
Developing and communicating a positioning strategy involves
several steps to ensure that your product or service stands out in
the minds of consumers and effectively communicates its value
proposition.
1. Market Research:
• Understand Your Audience: Conduct research to identify your
target audience's demographics, psychographics, needs,
preferences, and pain points.
• Analyze Competitors: Evaluate competitors' positioning
strategies to identify gaps and opportunities for differentiation.
Developing and communicating a
positioning strategy
• 2. Define Your Unique Value Proposition (UVP):
• Identify Differentiators: Determine what sets your product or
service apart from competitors. This could be unique features,
benefits, quality, pricing, customer service, or brand reputation.
• Address Customer Needs: Align your UVP with the specific
needs and desires of your target audience. Focus on solving
their problems or fulfilling their aspirations
Developing and communicating a
positioning strategy
• 3. Choose a Positioning Strategy:
• Consider Perceptual Maps: Use perceptual mapping techniques to
visualize how your brand is perceived relative to competitors. Identify
positioning opportunities that are unclaimed or underserved.
• Select a Positioning Concept: Choose a positioning concept that
resonates with your target audience and effectively communicates
your UVP. Common positioning strategies include:
• Benefit-based Positioning: Highlighting specific benefits or solutions your
product/service offers.
• Attribute-based Positioning: Emphasizing unique features or attributes.
• Price-based Positioning: Positioning based on affordability or value for
money.
• User-based Positioning: Focusing on a specific user group or persona.
• Competitor-based Positioning: Differentiating from competitors directly.
Developing and communicating a
positioning strategy
• 4. Craft Your Positioning Statement:
• Clear and Concise: Develop a brief statement that clearly
articulates your brand's positioning in a memorable way.
• Address Target Audience: Tailor the messaging to resonate
with your target audience's needs and aspirations.
• Highlight Differentiators: Clearly state what sets your brand
apart and why customers should choose it over alternatives.
• Evoke Emotion: Use language that evokes emotions and
creates a connection with your audience.
Developing and communicating a
positioning strategy
• 5. Communicate Your Positioning:
• Integrated Marketing Communication (IMC): Develop a cohesive
messaging strategy across all marketing channels, including
advertising, social media, website, packaging, and customer
interactions.
• Consistency is Key: Ensure that your positioning message is
consistent across all touchpoints and reflects your brand's identity
and values.
• Engage Your Audience: Use compelling storytelling, visuals, and
interactive content to engage and captivate your audience.
• Measure and Adapt: Monitor the effectiveness of your positioning
strategy through metrics such as brand awareness, customer
perception, and sales. Continuously refine and adapt your
messaging based on feedback and market insights.
Developing and communicating a
positioning strategy
• By following these steps, you can develop a compelling
positioning strategy that effectively communicates your brand's
unique value proposition and resonates with your target
audience, ultimately driving brand differentiation and
competitive advantage.