MARKET

SEGMENTATION,
TARGETING AND
POSITIONING (STP)
 Steps
Steps in
in Segmentation,
Segmentation,
Targeting,
Targeting, and
and Positioning
Positioning
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
of Segment Attractiveness
Targeting
2. Develop Profiles
of Resulting Segments
1. Identify Bases Market Segmentation
for Segmenting the Market
 Market
Segmentation
What is Market Segmentation?
Market segmentation is the process of
dividing the total market for good or service
into several smaller groups.

Dividing a market into distinct groups of

buyers on the basis of needs characteristics
or behaviour who might require separate
product or marketing mixes.
Levels of Market Segmentation
Mass Marketing:
# The seller engages in mass production, mass
distribution, and mass promotion of one product to
all buyers.

# Mass marketing creates the largest potential

market, which leads to the lowest costs, which in
turn can lead to lower prices or higher margins.

# Now a days the explosion of advertising media

and distribution channels has made it difficult and
increasingly expensive to reach a mass audience.
Levels of Market Segmentation
Micromarketing:
Many companies are turning to
micromarketing these days by choosing one of the
four levels;
 Segment marketing
 Individual marketing
 Niche marketing
 Local marketing
Levels of Market Segmentation
Segment marketing
Dividing the market into different segments on
the basis of homogenous need.
Segmented on basis of broad similarity with
regard to some attributes
Segmentation is also sometimes identifying,
capturing & retaining potential new markets
Levels of Market Segmentation

Individual marketing
Extreme marketing in which marketers
focus on individual customers.
Keep track of individual tastes &
preferences of individual customers
Many companies are approaching individuals
through e-mails to promote their products.
Levels of Market Segmentation

Niche marketing
Marketers effort to position their product or
service in smaller markets that have similar
attributes and have been neglected by other
marketer
Segment further divided into sub segments to
cater unsatisfied needs of small group is
called as niche
Levels of Market Segmentation

Local marketing
marketers offer customized products to suit
the local markets.
KFC introduced “Muslimized” or “Pakistani”
products such as Spicy Chicken, Hilal
Chicken, Zinger Extreme and more…
Bases for Consumer Market Segmentation

Market
Segementation

Demographic
Age, Psychographic Behavioral
gender, Life style, Occasions,
Geographical income,
Regions, cities, occupation,
personality, Benefits,
states, countries values, Usage rate,
religion,
social class, beliefs Loyalty status
family size
Bases
Bases for
for Segmenting
Segmenting Business
Business Markets
Markets

Personal Demographics
Characteristics

Bases
Bases
for
for Segmenting
Segmenting
Situational Business
Business Operating
Factors Markets
Markets Characteristics

Purchasing
Approaches
 Bases
Bases for
for Segmenting
Segmenting International
International
Markets
Markets
Industrial
Industrial Markets
Markets

Geographic Political/
Political/
Geographic Economic
Economic Legal
Legal

Cultural
Cultural
Requirements
Requirements for
for Effective
Effective Segmentation
Segmentation

Measurable
Measurable • Size, purchasing power, profiles
of segments can be measured.

Accessible
Accessible • Segments must be effectively
reached and served.

• Segments must be large or

Substantial
Substantial profitable enough to serve.

• Segments must respond

differently to different marketing
Differential
Differential
mix elements & actions.

Actionable
Actionable • Must be able to attract and
serve the segments.
MARKET TARGETING
 MARKET TARGETING
Once the firm has identified its market-segment
opportunities, it has to decide how many and which
one to target.

Target market is a group of customers for whom a

seller designs a particular marketing mix.
Target Market Selection Process

Evaluating the Market Segments

Selecting the Market Segments

Evaluating Market Segments
Before selecting the respective market segment,
the company should evaluate the possible
market segments in the current markets.

It should identify and select its target

consumers, give them their product according to
their needs and establish that group of
consumer in to permanent market segments.
Selecting the Market Segments
Here the co., can consider five patterns of target
market selection;

Single-Segment Concentration

 Selective Specialization

Product Specialization

Market specialization

Full market coverage

 Selecting the Market Segments

Single Segment Concentration:

Focusing on a single segment gives the
marketer the advantage of high sales as
all the efforts are concentrated on that
one segment

Example: Mercedes concentrates on upper

income group
Selecting the Market Segments

Selective Specialization:
Process in which the company focuses
its resources on a few segments and
develops its expertise in fulfilling the
needs of those segments
 Selecting the Market Segments

Product Specialization :
The firm makes a certain product that it
sells to several segments

Example: Microscope manufacturer who

sells to university, government, and
commercial laboratories.
 Selecting the Market Segments

Market specialization:
The firm concentrates on serving many
needs of a particular customer group.
Example: A firm sells assortment of
products only to university
laboratories.
 Selecting the Market Segments

Full market coverage:

Company targets the full market rather
than any specific segment.

Example: Hewlett-Packard targets the full

market for its printers.
 In Full market coverage,
Large firms can cover a whole market
into two broad ways;

Undifferentiated marketing

Differentiated marketing
 GUIDELINES FOR SELECTING TARGET
MARKET

 it should be consistent.
 It should meet organizational goals.
 It should be consistent with organizational
resources.
 It should generate sufficient profit volume.
 It should have competitors small in size and
number.
MARKET POSITIONING
 Positioning
In marketing, positioning has come to mean
the process by which marketers try to create
an image or identity in the minds of their target
market for its product, brand, or organization.
Kotler defined: “designing an offer so that
it occupies a distinct and valued place in
the minds of the target customer.”
 Positioning

Positioning
“Image that customers have about a product in relation
to the product’s competitors”
 Positioning Strategy

Key to developing the appropriate

marketing mix is the positioning
strategy of the product.
 Select Positioning Strategy
Effective positioning

What consumers currently think about the
product, especially in relation to
competing products.

What the marketer wants consumers to
think about the product.

Which positioning strategy will elevate the
consumers’ current product image to the
desired product image.
 Select Positioning Strategy

Position Mapping- creating a

visual description about consumer
perceptions of a product on two or
more dimensions in relation to
competitors.
 Select Positioning Strategy
The positioning strategy must determine where a
company wants to go
And how to get there by positioning the product
according to any of the following ways:
 Price/Quality
 Product Attributes
 Product User
 Product Usage
 Product Class
 Competition
 Symbol