Positioning

Instructor:
Dr. Ravi Shanker
 Objectives
 Define market
 Market segmentation
 Marketing mixes to target
markets
 Marketing strategies
 Market segment selection
considerations
 Segmentation variables
 Positioning strategy
 Possible Strategies for Target
Marketing
Custom Marketing: “To each his/her own.”
 STP IS THE HEART OF MODERN
STRATEGIC MARKETING
EVOLUTION OF STP MARKETING
MASS : EMPHASIS ON MASS PRODUCTION
MARKETING MASS DISTRIBUTION &
PROMOTION OF ONE PRODUCT TO
ALL BUYERS.
PRODUCT : PRODUCING SEVERAL PRODUCTS
VARIETY TO OFFER VARIETY RATHER THAN
MARKETING TO APPEAL TO DIFFERENT
SEGMENTS
TARGET : PRODUCTS & MKTG. PROGRAMS
MARKETING TAILERED TO EACH SELECTED
SEGMENT.
Differentiated Markets
Individuals

Gps of Individuals

Niche

Segments

Mass market
 Custom Marketing

 One-to-one marketing
 Uses data based-
marketing and
information technology
 For example...

FOR REPEAT HOTEL

GUESTS
•Your name
•Room preferences
•Special requests
•Smoking or non
smoking
•Credit card number
•Frequent hotel user
discount
Market Share & Pareto
Effect
Pareto Effect:

A small number of customers (20%) may

represent a large percentage of sales
(80%).
 What is a Market?
 All the potential customers sharing
particular needs and wants who might be
willing to engage in exchange to satisfy
their needs or wants.
What is a Market?

Ability

Willingness

Resources
Market Boundaries

Customers
Customers
Who are your
own
customers?
Who uses the
Users
Users category
of products?
Prospects
Individuals in
Prospects
the market who
are not your
customers.
 MARKET SEGMENTATION
DIVIDING A MARKET INTO DISTINCT
GROUPS OF BUYERS WHO MIGHT REQUIRE
SEPARATE PRODUCTS OR MARKETING
MIXES

THE OBJECTIVE OF MARKET SEGMENTATION

IS TO DETERMINE DIFFERENCES BETWEEN
BUYERS OR BUYER GROUPS.

A HETEROGENOUS MARKET MAY BE SUB-

DIVIDED INTO A NUMBER OF MORE OR
LESS HOMOGENEOUS MARKET SEGMENTS.
Segmentation Works Because ...

 Not all buyers alike

 Subgroups may be
identified
 Subgroups smaller and
more homogeneous
 Easier to satisfy
smaller groups
 NICHE

A niche is more narrowly defined group that

may seek a special combination of benefits.

The customers in the niche have a distinct

and somewhat complex set of needs; they
will pay a premium to the brand that best
satisfy their needs.

The niche marketer would need to

specialize its operations to be successful;
and the niche leader is not easily attacked
by competitors.
Overview: Segmentation, Targeting & Positioning
 Market Segmentation -
Principles
 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.
 Bases for Segmenting Consumer
Markets
 No single best way to
Geographic segment a market.
 Often best to combine
Demographic variables and identify
smaller, better-defined
Sociographic
target groups.
Lifestyle
Behavior
Consumption
 Segmenting Consumers by
Demographic Dimensions
Demographics are Statistics That Measure Observable Aspects of
a Population Such As:

Geography
Geography Age
Age

Race
Race and
and
Ethnicity Gender
Gender
Ethnicity

Social
Social Class
Class Family
Family Structure
Structure
and
and Income
Income
 Geographic Segmentation
 Divide markets into different geographic
units.
 Examples:
 World Region or Country: North America, Western
Europe, European Union, Pacific Rim, Mexico, etc.
 Country Region: Pacific, Mountain, East Coast, etc.
 City or Metro Size: New York, San Francisco
 Population Density: rural, suburban, urban
 Climate: northern, southern, tropical, semi-tropical
 Demographic Segmentation
 Use Differences in:
 age, gender, family size, family life cycle,
income, occupation, education, race, and
religion

 Most frequently used segmentation variable

 Ease of measurement and high availability.

 Usually the worst variable to use.

 Behavioral Segmentation
 Occasion  Loyalty Status
 Special promotions &  Nonusers, ex-users,
labels for holidays. potential users, first-
 Special products for time users, regular
special occasions. users.

 Benefits Sought
 Different segments  Usage Rate
desire different  Light, medium, heavy.
benefits from the
same products.
Loyalty Status Segmentation

Hard-core

Split loyals

Shifting loyals

Switchers
User & Loyalty Status Segmentation
MBA DEGREE BENEFIT SEG.

Quality Seeker
Specialty Seeker
Career Seeker
Knowledge Seeker
Status Seeker
Degree Seeker
Professional Advancers Seeker
Avoiders Seeker
Convenience Seeker
Essential Prerequisite for Market
Segmentation:
PROFILING

For example:
 Pathfinders study on
Indian House Wife
 Roper Starch
Worldwide (RSW)
study
 Etc.
 Roper Starch Worldwide (RSW)
Six Global
 Strivers: Consumer
Place more Segments
emphasis on material &
professional goals
 Devouts: Tradition and duty are very important.
 Altruist: Interested in social issues & social
welfare.
 Intimates: Value close personal & family
relationships.
 Fun seekers: High consumptions of restaurants,
bars clubs, movies.
 Creatives: Strong interests in education,
knowledge, technology, information.
 Segment Viability
 Characteristics of segment viability:
 Size: Must be large enough to generate
volume for adequate profit.
 Identity: Should have unique
characteristics that can be identified.
 Relevance: Must be relevant to the
important characteristics of the product.
 Access: Must be able to be reached.
REQUIREMENTS FOR EFFECTIVE SEGMENTATION
MEASURABLE The segment should lead themselves
to some form of estimation of
Size, purchasing power, profile
SUBSTANTIAL The segment should be substantial
and worthwhile (profitable)
cultivating them.
ACCESSIBLE The segment should be within reach
and to be served (through
distribution & communication.
DIFFERENTIAB Conceptually distinguishable &
LE respond differently to different Mktg.
Mix elements.
ACTIONABLE Effective programmes can be
formulated for attracting & serving
 Choosing Market Segments
We need a YES
response to each of
Distinguishing/stable these!
characteristic
Significant size
Accessible with
Distribution &
promotion
Responsive (similar
needs)
Measurable potential
 SELECTION
Geo location and Scale
Size
Stage of industry Life Cycle
Buying history
Profitability
Risk
Aspirations
Rate of growth
Sensitivity / vulnerability
Capitalization
ROI
HOW SHOULD A FIRM SELECT ITS SEGMENTS
 Co. Thrust
 Size & Growth
Potential
 Investment needs
 Profitability
 Risk
 Competition
 Segment durability
 Segment Mobility
 Segment Visibility
 Segment Reachability
 TARGETING
Factors in evaluating different market
segments:
I) Segment size & growth
II) Segment structural attractiveness:
(To study the impact on long term
profitability of: industry
competitors, potential entrants,
substituttes, buyers, suppliers.)
Iii) co’s own objectives & resources:
Positioning
Segmentation:
grouping of people
by needs or wants

Positioning:
how a product is
geared to attract
this market segment
 Positioning

 The way consumers perceive

the brand relative to its
competition
 Unique competitive
advantage
 Stress salient
characteristics
 Differentiate
 DEFINITION
Positioning is concerned with the identification,
development and communication of a
differentiated advantage which makes the brand
perceived as superior & distinctive to those of its
competitors in the mind of the Target segments.
 POSITIONING
1940’s USP (Product feature)

1960 IMAGE ERA (David Ogilvy)

(Arising out of Dilution of USP due to competitive

Irritation)
1970’s POSITIONING ERA (Al Ries &Jack Trout)

“… Not what you do to a product but what you do

to the mind of the prospect.”
“YOU POSITION THE PRODUCT IN THE MIND OF
THE PROSPECT”
i.e., you communicate positioning but
IT CAN BE AFFECTED BY OTHER M. MIX ELEMENTS

G. LYNN PROCESSES HAVE CHARACTERISTICS WHICH

SHOSTACK AFFECT POSITIONING & CAN BE STRATEGICALLY
MANAGED FOR POSITIONING PURPOSES.
 SEVEN POSITIONING STRATEGIES

ATTRIBUTE Gas Mileage

POSITIONING
BENEFIT Cotton: Cool in Summer
POSITIONING
USE/APPLICATIONS Office Wear
POSITIONING
USER Pepsi Generation
POSITIONING
COMPETITOR The Pepsi Challenge
POSITIONING
PRODUCT CATEGORY Cola-, Skimmed Milk
POSITIONING
QUALITY/PRICE Cheaper Detergents
POSITIONING
Selection of Position

 Importance
 Distinctiveness
 Communicability
 Superiority
 Affordability
 Profitability
 POSITIONING STRATEGIES
CONSUMER FOCUS COMPETITION
FOCUS

BOTH ASSOCIATE PRODUCT BENEFITS

WITH CONSUMER NEEDS

BY LINKING THE BY COMPARING THE

PRODUCT WITH THE PRODUCT AND THE
BENEFITS THE BENEFITS IT
CONSUMER WILL OFFERS, TO THE
DERIVE COMPETITIION
 Positioning Errors

 Under Positioning

 Over Positioning

 Confused Positioning
( I am not clear what you stand for)

 Doubtful Positioning
(I don’t believe what you say about yourself)
Sources of Competitive Turbulence

 The threat of new entrants

 The threat of substitute products
 The intensity of rivalry between
competing firms
 The power of suppliers
 The power of buyers
(Michael Porter)
 Repositioning
May be needed because:
 Original position was inappropriate

 The nature of customer demand has

changed

 Service provider seeks to get a more

profitable market segment
 Review
 Define market
 Market segmentation
 Marketing mixes to target
markets
Marketing strategies
!

 Market segment selection
considerations
 Segmentation variables
 Positioning strategy