n, Targeting & Positioning

Module 3
rketing Strategies

• Mass Market : The term mass market refers to a large, und

• Mass Marketing :
 An attempt to appeal to an entire market with one basic m

• Henry Ford applied the concept in the automobile industry.

uct Variety

• After the mass marketing strategy another strategy with sim

• An attempt to appeal to the entire market with a huge varie
• However, like Mass marketing in this case also the custom
t Marketing

• Is a market segmentation and market coverage strategy whereb

• Target marketing is particularly effective for small companies wi
• It enables firms to capitalize on the respective serve market sha
Requirements of Market Segments

In addition to having different needs, for segments to be pra

• Identifiable: the differentiating attributes of the segments m

• Accessible: the segments must be reachable through communicati
• Measurable: Possible to determine the values of the variables use
• Substantial: the segments should be sufficiently larg
• Unique needs: to justify separate offerings, the segm
• Durable: the segments should be relatively stable to
eting Segmentation
Segmentation’

Market Segmentation is the sub-dividing of cus

• Segmentation is essentially the identification of
• Each subset or group is known as a 'segment'.
• Heterogeneous market for a product is divided
nd Limitations

Benefits:
The Organisation gets to know its customers better.
Provides guidelines for resource allocation.
It helps focus the strategy of the organisation.

Limitations:
Targeting multiple segments increases marketing costs.
Segmentation can lead to proliferation of products.
Narrowly segmenting a market can hamper the development of bro
gmentation?

• To develop marketing activities

• Increase marketing effectiveness
• Generate greater customer satisfaction
• Create savings
• To identify strategic opportunities and niches
• Allocation of marketing budget
• Adjustment of product to the market need
• To estimate the level of sales in the market
• To overcome competition effectively
• To develop effective marketing programmes
• To contribute towards achieving company goals
ion in Consumer Markets
 Market Segmentation

Segmenting Consumer Markets

• Geographic
• Demographic
• Psychographic
• Behavioral

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 Market Segmentation

Segmenting Consumer Markets

Geographic segmentation divides the market

into different geographical units such as
nations, regions, states, counties, or cities

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Pampers
This ad is an example of
geographic
segmentation.
When visiting the web
site look for the different
countries Pampers
markets to.
 Market Segmentation

Segmenting Consumer Markets

Demographic segmentation divides the

market into groups based on variables such
as age, gender, family size, family life cycle,
income, occupation, education, religion,
race, generation, and nationality

7-9
 Market Segmentation

Segmenting Consumer Markets

Demographic segmentation is the most

popular segmentation method because
consumer needs, wants, and usage often
vary closely with demographic variables and
are easier to measure than other types of
variables

7-10
 Market Segmentation

Segmenting Consumer Markets

Age and life-cycle stage segmentation is the

process of offering different products or
using different marketing approaches for
different age and life-cycle groups

Gender segmentation divides the market

based on sex (male or female)

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 Market Segmentation
Segmenting Consumer Markets

Income segmentation divides the market

into affluent or low-income consumers

7-12
 Market Segmentation
Segmenting Consumer Markets

Psychographic segmentation divides

buyers into different groups based on
social class, values, lifestyle, or
personality traits

7-13
Psychographic segmentation based on Values
 Market Segmentation
Segmenting Consumer Markets

Behavioral segmentation divides buyers into

groups based on their knowledge, attitudes,
uses, or responses to a product
• Occasion
• Benefits sought
• User status
• Usage rate
• Loyalty status

7-14
 Market Segmentation
Segmenting Consumer Markets

Occasion segmentation divides buyers into groups

according to occasions when they get the idea to
buy, actually make purchases, or respond to a
product

Benefit segmentation requires finding the major

benefits people look for in the product class, the
kinds of people who look for each benefit, and
the major brands that deliver each benefit

7-15
 Market Segmentation

Segmenting Consumer Markets

User status divides buyers into ex-users, potential

users, first-time users, and regular users of a
product

Usage rate divides buyers into light, medium, and

heavy product users

Loyalty status divides buyers into groups according

to their degree of loyalty
7-16
 Market Segmentation
Segmenting Consumer Markets

Loyalty status divides buyers into groups

according to their degree of loyalty

7-17
 Market Segmentation
Using Multiple Segmentation Bases

Marketers use more than one variable rather

than single variable for segmentation

Multiple segmentation is used to identify smaller,

better-defined target groups

Geodemographic segmentation is an example of

multivariable segmentation that divides groups
into consumer lifestyle patterns

7-18
MARKET TARGETING
 Market Targeting

Evaluating Market Segments

• Segment size and growth

• Segment structural attractiveness
• Company objectives and resources

7-28
 Market Targeting

Evaluating Market Segments

• Segment size and growth

• First collect & analyze data on segment sales,
growth rate & profitability for various segments.
• Right size & growth(relative terms)
• Smaller versus larger segments
• Growth potential

7-29
 Market Targeting

Evaluating Market Segments

• Segment structural attractiveness

• Competition
• Substitute products
• Power of buyers
• Power of suppliers

7-30
 Market Targeting

Evaluating Market Segments

• Company objectives and resources

• Competitive advantage
• Availability of resources
• Consistent with company objectives

7-31
 Market Targeting

Selecting Target Market Segments

 After evaluating different segments, company must
decide which & how many segment it will target.
 A target market consist of a set of buyers who share
common needs or characteristics that the company
decides to serve
 Market Targeting can be carried out at several different
levels
 Undifferentiated marketing(Mass)
 Differentiated marketing(Segemented)
 Concentrated marketing(Niche) 7-32
 Market Targeting

Target Marketing Strategies

 Undifferentiated marketing ignores market

segment difference & targets the whole
market with one offer.
 Focuses on common needs rather than what’s
different
 Mass marketing

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 Market Targeting

Selecting Target Market Segments

Differentiated marketing targets several

different market segments and designs
separate offers for each
 Goal is to achieve higher sales and stronger position
 More expensive than undifferentiated marketing
 Find out trade off b/w increased sale vs increased
cost when deciding on a differentiated marketing
strategy.
7-34
 Market Targeting

Selecting Target Market Segments

Concentrated marketing targets a large share

of one or few smaller market or niches
Niching offers smaller companies an
opportunity to compete by focusing their
limited resources on serving niches that may
be unimportant to or overlooked by larger
competitors.
• More appealing when company have limited
7-35
 Market Targeting

Selecting Target Market Segments

Micromarketing is the practice of tailoring

products and marketing programs to suit the
tastes of specific individuals and locations
• Local marketing
• Individual marketing

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 Market Targeting

Selecting Target Market Segments

Local marketing involves tailoring

brands and promotion to the needs
and wants of local customer groups
• Cities
• Neighborhoods
• Stores
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 Market Targeting

Selecting Target Market Segments

Local Marketing
• Benefits:
• Increased marketing effectiveness in competitive
markets
• More customer-specific offerings

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 Market Targeting

Selecting Target Market Segments

Local marketing
• Challenges:
• Increased manufacturing and marketing costs
• Less economy of scale
• Logistics
• Dilution of company image

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 Marketing Targeting

Selecting Target Market Segments

Individual marketing involves tailoring

products and marketing programs to the
needs and preferences of individual
customers
• Also known as:
• One-to-one marketing
• Mass customization
• Markets-of-one marketing

7-40
 Market Targeting

Selecting Target Market Segments

Mass customization is the process through which

firms interact one-to-one with masses of customers
to design products and services tailor-made to meet
individual needs. Has made relationships with
customers important in the new economy.
• Provides a way to distinguish the company against
competitors

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 Market Targeting

Choosing a Targeting Strategy

Depends on:
• Company resources
• Product variability
• Product life-cycle stage
• Market variability
• Competitor’s marketing strategies

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 Market Targeting

Socially Responsible Target Marketing

Benefits customers with specific needs

Concern for vulnerable segments
• Children
• Alcohol
• Cigarettes

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Positioning
 Positioning
The place a product occupies in consumers’
minds relative to competing products.

It is a act of designing a company's offering &

image to occupy a distinctive place in the
minds of the target market.
Marketers must:
Plan positions to give products the greatest advantage
Develop marketing mixes to create planned positions
Positioning Example

eBay’s positioning: No
matter what “it” is, you
can find “it” on eBay!
 Positioning

Product position is the way the product is

defined by consumers on important
attributes—the place the product occupies in
consumers’ minds relative to competing
products
• Perceptions
• Impressions
• Feelings
The result of successful positioning is a distinctive
brand image on which consumers rely in making
 Perceptual Mapping

 A spatial picture of how consumers view

products or brands within a market
 Allows marketers to determine how their
product appears in relation to competitive
brands
 Enables them to see gaps in in positioning
of all brands in the product class to identify
areas in which consumer needs are not
being met
 A visual profile of how consumers perceive a number of
pain relievers on the two dimensions of effectiveness vs.
gentleness.
More

Tylenol
Effectiveness

Extra-Strength Tylenol
Bufferin

Nuprin
Anacin Motrin Advil
Bayer
Excedrin
Private Label Aspirin Aleve
Actron Orudis

Less Gentleness to Stomach More

Positioning Strategy

Positioning results from differentiation and

competitive advantages.

Positioning may change over time.

 Differentiation and Positioning

Steps to Choose a Differentiation and Positioning

Strategy

• Identifying a set of possible competitive

advantages to build a position
• Choosing the right competitive advantages
• Selecting an overall positioning strategy

7-46
 Differentiation and Positioning

Choosing a Differentiation and Positioning

Strategy

Identifying a set of possible competitive advantages to

build a position by providing superior value than its
competitors
Marketers must think through the customer's entire
experience with the company's product & service.
In what specific ways can a company differentiate itself
or its market offer
It can differentiate along the following lines:
• Product differentiation 7-47
 Differentiation and Positioning

Identifying Possible Value Differences and

Competitive Advantage

Competitive Advantage is the advantage over

competitors gained by offering greater value either
through lower prices or by providing more benefits
that justify higher prices

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 Differentiation and Positioning

Identifying Possible Value Differences and

Competitive Advantage
Product Differentition: achieved through features,
performance or style & design or attributes such as
consistency, realibility, durability, repairability.
Serivce Differentation: speedy, convenient or careful
delivery
Channel Differentiation: the way they design their
channel's coverage, expertise & performance
People Differentiation: hiring & training better people
Image Differentiation: company or brand image
 Differentiation and Positioning

Choosing the Right

Competitive Advantages
if company discover several potential
differentiations, then it must choose ones on
which it will build its position strategy.
It must decide HOW MANY difference to
promote & WHICH ONES
Marketer's think that company should
aggressively promote only one benefit to the
7-49
 Differentiation and Positioning

Selecting an Overall positioning

Strategy
Positioning of a brand is called the brand's value
proposition.
Value proposition is the full mix of benefits upon which
a brand is differentiated & positioned
• More for more
• More for the same
• Same for less
• Less for much less
• More for less 7-50
 Differentiation and Positioning

Developing a Positioning
Statement
A statement that summarizes company or brand
positioning
It takes this form: To(Target segment & need)
our(brand) is (concept) that (point of difference)
For e.g. Mountain Dew (To (young, active soft drink
consumers) our (mountain dew) is (soft drink
7-51
that gives more energy) that ( highest level of
 Differentiation and Positioning

Communicating & delivering the

chosen position
Once it has chosen a position, the company must take strong
steps to deliver & communicate the desired position to target
consumers.
All marketing mix efforts must support the positioning strategy
Once a company has built the desired position, it must take care
to maintain the position through consistent performance &
communication.
Company should avoid abrupt changes that might confuse
consumer.
 6. Develop Marketing
Mix for Each Target Segment Market
5. Develop Positioning Positioning
for Each Target Segment
4. Select Target
Segment(s) Market
3. Develop Measures Targeting
of Segment Attractiveness
2. Develop Profiles
of Resulting Segments
1. Identify Bases Market Segmentation
for Segmenting the Market
BRANDING
 Views on Brands

“A name, logo, or symbol that evokes in customers a perce

oup, Toronto

“A product with a personality.”

k, Vancouver

Marketing communications in any form has an impact on custome

What is a brand ?

Branding is a combined effort of the company which is projected to the consum

Brand
Marketing

Company Consumer

Design
 Definition of a brand

“A name, term, sign, symbol or design, or a combination of

these, that is intended to identify the goods and services of
one business or group of businesses and to differentiate
them from those of competitors”.

“A mixture of tangible and intangible attributes symbolized in

a trademark, which, if properly managed, creates
influence and generates value”.
 Integrity of Brand

Product Packaging
Websites

logo
Company
Product A

Product B
Advertisements
A brand is a promise. A promise to achieve certain results, deliver a certain expe
What is a brand ?

(1) Products and services have become so alike that they fail to distinguish them
(2) These added emotions and trust help create a relationship between brands a
(3) Brands create aspirational lifestyles based on these consumer relationships.
(4) The branded lifestyles extol values over and above the brands’ product or se
(5) The combination of emotions, relationships, lifestyles and values allows bran
 Benefits of Branding to A BUYER

Help buyers identify the product that they like/dislike.

Identify marketer
Helps reduce the time needed for purchase.
Helps buyers evaluate quality of products especially if unable
to judge a products characteristics.
Helps reduce buyers perceived risk of purchase.
Buyer may derive a psychological reward from owning the
brand.
The Role of Brands

 Identify the maker

 Simplify product handling
 Organize accounting
 Signify quality
 Create barriers to entry
 Serve as a competitive advantage
 Secure price premium
 An Effective Brand Name
● Is easy to pronounce
● Is easy to recognize and remember
● Is short, distinctive, and unique
● Has a positive connotation
● Reinforces the product image
● Is legally protectable
What is Branding?

 Branding
is endowing
products and services with
the power of the brand
What is Brand Equity?
 Brand equity is the added value
endowed on products and
services, which may be reflected
in the way consumers, think, feel
and act with respect to the brand.
What is a Brand Promise?
Abrand promise is the
marketer’s vision of what the
brand must be and do for
consumers
 Brand Loyalty

“The degree of consumer attachment to a brand.”

Recognition Awareness of name, benefit and pack

Preference Is useful, consumer will buy if availab

Insistence
Will search for; must have
The World’s Most Valuable
Brands
Major Branding Decisions

Brand Name Selection

Selection
Protection

Brand Sponsor
Manufacturer’s Brand
Private Brand
Licensed Brand
Co-branding

Brand Strategy
Line Extensions
Brand Extensions
Multibrands
New Brands
 Branding Strategies

Brand No Brand

Manufacturer’s
Private Brand
Brand

Individual Family Combi- Individual Family Combi-

Brand Brand nation Brand Brand nation
Generic Brand

A no-frills, no-brand-name,
low-cost product that is simply
identified by its product
category.
Manufacturers’ Brands Versus
Private Brands

Manufacturers’ The brand name of a

Brand manufacturer.

A brand name owned by a

Private wholesaler or a retailer. Also
Brand known as a private label or store
brand.
 Types of brand
There are two main types of brand –
manufacturer brands and own-label brands.
Manufacturer brands
Manufacturer brands are created by producers
and bear their chosen brand name. The
producer is responsible for marketing the brand.
The brand is owned by the producer.
By building their brand names, manufacturers
can gain widespread distribution and build
customer loyalty
 Advantages of Manufacturers’
Brands
Develop customer loyalty
Attract new customers
Enhance prestige
Ensure dealer loyalty
 Private Label brands
Own-label brands are created and owned by businesses
that operate in the distribution channel – often referred to
as “distributors”.
Often these distributors are retailers, but not exclusively.
Sometimes the retailer’s entire product range will be own-
label. Own-label branding – if well carried out – can often
offer the consumer excellent value for money and provide
the distributor with additional bargaining power when it
comes to negotiating prices and terms with manufacturer
brands.
 Advantages of Private Brands
 Earn higher profits
 Less pressure to mark down prices
 Ties customer to wholesaler or
retailer
Individual Brands Versus
Family Brands

Individual Using different brand names for

Brand different products.

Marketing several different

Family
products under the same
Brand brand name.
 Licensed Brand
licensed brand (similar to franchise) is a form
of business where the brand holder allow
the brands use, at a cost, by an operator.
 Co branding
 Two or more brand names on the product or its
package
 e.g. Dell-Intel
 Types of co branding
– Ingredient branding
 i.e., Hero Honda recommending MRF tyres
– Cooperative branding
 Airline/hotel/credit card packages
 Borrow on each other’s brand equity
– Complementary branding
 Advertised or marketed together to suggest usage–Coco cola
recommending kinley mineral water.
 Four Brand Strategies
Product Category

Existing New

Existing Line Extension Brand Extension

Brand Name

New Multibrands New Brands Name

 Line Extension

Development of a product that is closely related to one or

more products in the existing product line but designed
specially to meet the somewhat different needs of customers.
Extending an existing brand name to new forms, colors,size,
flavors, ingredients of an existing product category
e.g. nandhi milk(size), lux soap(color),flavor(rasan),
ingredient (clogate)
 Brand extension
 Extending the brand name to new or modified
product in a new category
 e.g. Johnson baby product, LG
 Gives a new product instant recognition & faster
acceptance & also save advertising cost compare to
new brand name
 Multibrands
 Firms adopt multiple branding strategies to
capture a greater market share by filling
the gaps in the market and catering
different buying pattern of the customers.
 Ex: cell phone, Bike
Disadvantage
With the multi-branding strategy is that the
company may obtain a smaller market
share of all the brands.
 New Brands
A company may belive that the power of its
existing brand name is waning & a new
brand name is needed or
Create a new brand name when it enters a
new product category