Segments, Target Markets & Positioning

Not everyone likes the same cereal, restaurant, college or movie

Marketers identify & profile distinct Marketer decides which present the For each, the firm develops a
groups of buyers who might prefer or greatest opportunities market offering that it positions in
the minds of the target buyers as
require varying product & service mixes by
delivering some central benefit(s).
examining demographic, psychographic &
behavioral differences among buyers.
 Segmentation
What customers will we serve?
Dividing a market into distinct groups of buyers
with different needs, characteristics or behavior, who might
require separate marketing mixes.

Buyers may differ in their

Wants | resources | locations | buying attitudes | buying practices

Through market segmentation, companies divide large, heterogeneous markets into smaller
segments that can be reached more efficiently with products that match their unique needs.
 Market Segmentation – Basis
(Variables/Dimensions)
• Segmentation Variables
– Geographic
– Demographic
– Psychographic
– Behavioral
– Other (anything!)
• No single best way to segment a market.
• Often best to combine variables and identify smaller, better-
defined target groups.
 Geographic Segmentation

People use talc relatively

excessively in southern India & Philips started making profits in
apply it even on face the Japanese market only after it
made small coffee-makers to fit In Spain, Coca-Cola withdrew its two-
the cramped conditions there. litre bottle after finding it did not fit
local refrigerators
 Geographic Segmentation
• By regions: North, south, west, east

• Village size: <1,000; 1,000–2,000; 2,000–5000; >5,000

• Density: Low, moderate, high

• Climate: Summer, rainy, winter

• Agro-based technology companies segment India into 8 geo-climatic
regions based on soil condition & climate

• Culture: 56 socio-cultural regions (SCRs) – UP has 5 SCRs Avadh,

Bundelkhand, Rohilkhand, Purvanchal, Braj. Each SCR has its own identity
wrt language, culture, dress, location

• Cultural identities are diluted in the case of urban customers due to

western influence, but it is largely intact in rural areas.
 Demographic Segmentation
Use Differences in:
– Age (e.g. movie producers)
– gender (e.g. apparel sellers, Fairness Creams)
– family size (e.g. car sellers - Family car segment vs. Compact car
segment)
– family life cycle (e.g. family holiday packages, Banking Segments
- Young couples, young families, older families, pre-retirement,
retired)
– income (Airlines - Jet Airways vs. Indigo, Nokia – Asha series,
Budget & compact car segments by Maruti)
– Occupation, education, race, religion

Most frequently used segmentation variable

• Ease of measurement and high availability.
New Consumer Classification System (NCCS) or (New) Socio Economic Classification of India

Source: The Market Research Society of India, 2011

 Demographic Segmentation

Indian Hotels by Tata

With the growth in domestic travel, the budget & upscale categories really grew, driving the average room rates & RevPAR
(revenue per available room) in these markets. Segmenting has really helped Taj cash in on the trend.
 Demographic Segmentation

Indian Hotels by Tata

Taj

Place: only high-street location

Brand: for company's global foray - a magnet to get customers to its other
properties.
 Demographic Segmentation

Indian Hotels by Tata

Vivanta by Taj (upper upscale brand)

Price: ~ 15-20% cheaper than a Taj hotel in the same city

Target: a younger traveller vis-a-vis Taj
P.o.P: competes with Hyatt, Westin & Sheraton.
 Demographic Segmentation

Indian Hotels by Tata

Gateway (upscale brand)

Target: a young traveller who has had his first taste of success, is wired &
works round the clock.
Product: Could have 1 specialty restaurant & 1 all-day diner.
Price: In same city, ~ 15-20% cheaper than Vivanta
 Demographic Segmentation

Indian Hotels by Tata

Ginger (budget hotel brand)

Product: No-frill hotel. It does not run a restaurant - the function is

outsourced. (Maybe a small CCD attached to it).
Target: budget traveler
Place: Often near the railway station/ bus stand.
Psychographic Segmentation

Psychographic segmentation
divides a market into
different groups based on
social class, lifestyle or
personality characteristics.

People in the same demographic classification

often have very different lifestyles and personalities.
• Life style- People have different ways of living. Culture influences a lot

– Eg. Outdoor types & homely types, sports & fitness lovers
– Pattern of life as expressed in activities, interest & opinions e.g. achievement-
oriented
– Time starved or Money constrained (e.g. marketing of services such as movie
halls, home-delivery, Happy Hours Menu)

• Personality- People have different types of personalities. Sincere,

exciting, amiable, stern, aggressive, calm, cunning, skeptical, jovial etc.

• Socio-culture- E.g. Zee TV vs. Zee café

Romedy Now (young girls- chick flicks) vs. HBO (Family- Drama) vs. UTV
Psychographic (Lifestyle/Personality) Segmentation

http://www.miabytanishq.com/about
 ..Contd
Example: Psychographic (Lifestyle/Personality) Segmentation
 Behavioral Segmentation

Marketers divide buyers into

groups on the basis of their
knowledge of, attitude
toward, use of, or response
to a product

Although psychographic segmentation can provide a richer

understanding of consumers, some marketers fault it for
being somewhat removed from actual consumer behavior.
 Behavioral Segmentation
Occasion
– Special promotions, products & labels.
 Behavioral Segmentation
Occasion
– For special occasions: holidays, Festivals, Anniversary,
birthday, Wedding, Graduation

Recently Kellogg’s has attempted to change the image of

cereals to that of an ‘any time’ snack, rather than simply a
breakfast meal.
Behavioral Segmentation
Occasion
 Behavioral Segmentation
Occasion
Video  Tanishq Brides
 Behavioral Segmentation
Occasion
'A perfect way to end your day' pitches Cadbury
Bournville as an ideal partner for unwinding following a
day's hard work
Examples: Behavioral Segmentation

Restaurants - Occasion

– Regulars
– special occasion
– business lunch
– quick spot
– On-the-go (Meal-in-a-box)
 Behavioral Segmentation

Benefits Sought

– Different segments desire different benefits from the same

products.
– quality, service, price, durability, convenience, safety
Examples: Benefit (Behavioral) Segmentation

Cosmetics
skin repair e.g. Olay
remove wrinkles
glowing skin e.g. Vicco
acne reduction e.g. Himalaya
attractive look e.g. Fair & Lovely
social status
celebrity identification
 Benefit-based Behavioral Segmentation
by Fullerton India

• A non-banking financial institution

• Segmented rural customers based on their credit & investment needs

• Salaried class

• Large businessmen (traders & producers)

• Small businessmen (traders & producers) Designed a new

financial product
targeting the
most potential
• Service providers segment

• Farmers
Examples: Benefit (Behavioral) Segmentation

Mobile phones

Highly social
Work-oriented (Blackberry)
Working women – Safety (features like torchlight, alarm)
Contact
Status symbol
 Behavioral Segmentation
Loyalty Status
– Nonusers, ex-users, potential users, first-time users,
regular users.
– E.g. Reliance Fresh cards, Privileged Customer cards
 Behavioral Segmentation

Decision Roles
– Initiator
– Influencer
– Decider
– Buyer
– User
Behavioral Segmentation
Behavioral Segmentation
 Behavioral Segmentation

Usage Rate
– Light, medium, heavy
‘P’roduct (packaging) decision
Examples: Behavioral Segmentation

Packaged food manufacturers

Single households
Diet-conscious
Family dining
Parties
Budget-conscious Variety
seekers
 Case: Titan
Fastrack, Sonata, Helios, Raga, Xylys…
• Demographic:
– Gender: male & Female watches
– Age: Children, youth, Middle age
– Income: Lower-middle, Upper-middle, Upper, Budget segment
• Behavioral:
– Occasion: Casual, Party, Office, Sports/Outdoors, gifting
• Psychographic: Personalities- Adventurous, sophisticated, Gold lovers
• Behavioral: Benefits- Social status, time, Ornamentation (Designer
segment)

E.g. For women seeking fashion within the middle-income group, Titan
offered the Raga Range which was meant exclusively for women
 levels of market segmentation

Because buyers have unique needs and wants, each buyer is

potentially a separate market.
Ideally, then, a seller might design a separate marketing program for
each buyer.
 Degree of Segmentation
Mass marketing Segment marketing Niche marketing Micro marketing
• Considers all • Identifies • Serves selectively • Focuses on
customers customers as one or a few individuals or very
homogeneous separate groups customer groups small groups
• Companies use
this while entering • Eg. HUL uses 2 • Ghari using quality • Vegetarian
rural markets different of water to launch bathing soap sold
• Eg. Colgate approaches to variants for in the
Palmolive market Hamam different Bundelkhand
marketed the (mass marketing) geographic region (Jhansi
same toothpaste and Lifebuoy segments belt) of India
to rural & urban (segmented target specifically
customers till marketing – at the local
recently. As rural Lifebuoy Active vegetarian
markets started to Red, Active population.
evolve & rural Orange, Plus & Promoted as
customers became Gold) Charbi rahit
more demanding,
Colgate
introduced Cibaca
 Differentiated (Segmented) Marketing
Targets several segments & designs separate offers for each.
– Coca-Cola (Coke, Sprite, Diet Coke, etc.)
– Procter & Gamble (Tide, Cheer, Gain, Dreft, etc.)
– Toyota (Camry, Corolla, Prius, Scion, etc.)
– Lego
 Niche Segmentation by GoldPlus

• GoldPlus brand of jewelry from the Tata Group

• Targets the requirements & aspirations of rural & semi-urban population

in South India

• Jewelry is considered an investment & a reserve

• Uses Tata seal of good faith

 Niche Segmentation by Nokia

• ‘Jeevan Sadhan’ (Nokia Life Tools) service launched in 2009

• Specifically targets rural Indian customers

• Bundles handset alongwith services – agricultural tips, market prices of

agri produce, weather forecasts, career information, entertainment
services, news, astrology

• Sachet pricing – daily pricing @ Re. 1; FMCG-isation of mobile telephony 

• Promotion – Showrooms on wheels, tie-up with microfinance institutions

like SKS Microfinance
 Examples: Concentrated/Niche Marketing

The Need: Retribution

The Business: Dirty Rotten Flowers
How large is the broken-hearted niche? Oh my. Roman Sacke started Dirty Rotten Flowers to find out. DRF creates unique
bouquets that the wronged can send to people who wronged them. Products include: The Morticia (“one dozen
decapitated roses from someone with a wicked sense of humor”) and I Love You Not (“one dozen twisted red carnations
accompanied by our deconstructed teddy bear”)
 Micro Segmentation by Dabur

• Dabur’s Anmol hair oil – a mustard-amla based oil for North India

• Rs. 10 for 50 ml sachet

• Targeted at rural consumers using loose mustard oil

Example: Individual marketing
 Steps in Market
Segmentation, Targeting,
and Positioning
What do you think about each of the following brands, companies or products:
What do you think about each of the following brands, companies or products:
 Positioning
The place a product occupies in consumers’ minds relative to
competing products.
Creating an “image” in the consumers’ mind. Consumers
generally buy “images” than actual product.

Consumers are overloaded with information about products &

services. To simplify their buying process, consumers organize
products, services & companies into categories & ‘position’
them in their minds.

A product’s position is the complex set of perceptions,

impressions, & feelings that consumers have for the product
compared with competing products.
Positioning Maps: Luxury SUVs
Price vs. Orientation Dimensions
 Positioning Strategy
• Competitive advantages: An advtg over competitors gained by offering
greater customer value, either through lower prices or by providing more
benefits that justify higher prices.

• Points of Parity: Placing the brand in a specific category suggesting

similarities.
E.g. Dove & Moisturizing creams One quarter moisturizing cream

• Points of Difference ( ~ USP ) => Differentiation

Positioning results from differentiation and competitive advantages.

Positioning may change over time.

 Differentiation

Product differentiation
Features/performance/style/design

Services differentiation
Speedy/convenient/free/careful/advise
Maruti- differentiated itself from the rest of the automobile manufacturers
in India through a no. of authorized service stations & dealers, largest dealer network, prompt & easy service

ICICI: Bank accounts at home

Channel differentiation
Channel’s coverage, expertise, performance, efficiency

People differentiation
Hiring/training skilled people
 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.”
 Positioning Statement for
Volvo
in North America

For upscale American families, Volvo is the family

automobile that offers maximum safety

Generic format for positioning statements: For (target

market), (brand) is the (product category) that
(benefit offered).
 Examples of positioning
Based on size
Based on toughness and endurance
Based on low price
Based on high price
Based on quality
Based on time of day
Based on substitution
Based on gender of the
consumer
Based on age
Based on athletic approach
Based on cultural symbols
Against Competitor
Based on performance
SEGMENTATION TARGETING POSITIONING DIFFERENTIATION
Age

Eating Habits

Lifestyle of
Urban Families
 SAFFOLA

Phase 1 - Aapka Hrudai Rakhe SURAKSHIT

Purpose- Position Saffola as an oil, for people

with heart problems
Target Segment- People with heart problems
and their families
 Saffola
Phase 2 - Dil Ko Rakhe JAWAN

• Purpose- Expand the customer base further by

targeting those young professionals who
suffer of job burnouts, appear disinterested
and feel exhausted after work
• Target Segment- Young professionals and their
families
 STP-Saffola Oil
Segmentation variables- Age, region, health, lifestyle

Target Segment-Middle aged, stress related problems

& urban-fast lifestyle

Targeting Strategy- Earlier, niche marketing;

now with increase in health consciousness & change
in job patterns the segment itself has grown bigger

Positioning- Oil for Healthy heart

STP Case – Nivea