Principles of Marketing (BBA 204) Unit 2

Principles of Marketing (BBA 204)

Unit – 2

Market Segmentation, Targeting & Positioning

Q.1 ) Define Positioning. What are the different strategies used by marketer to position its product ?

Ans.) Positioning of product means all those activities that helps in occupying place in the minds of customers. Its objective is to occupy a clear, unique and advantageous position in the consumer’s mind.

Different positioning strategies are :-

1. Attributes : This strategy basically focuses upon the characteristics of the product. Lets take an example of motorbikes some are emphasizing on fuel economy, some on power, looks and other stress on durability. Hero Cycles Ltd. Positions first, emphasizing durability and style for its cycles.

2. Benefits : At time even you would have noticed that a product is positioned along two or more product characteristics at the same time. For example, Hero Motors  insists on ‘high mileage’ along with ‘low price’ in their motorbikes.

3. Against the Competitors : In some cases, reference competitor(s) can be the dominant aspect of the positioning strategies of the firm, the firm either uses the same of similar positioning strategies used by the competitors or the advertiser uses a new strategy taking the competitor’s strategy as the base. For example, Colgate when entered into the market focused on the family protection but Pepsodent entered into the market with focus on 24 hour protection and basically for kids. Colgate changed its focus from family to kids teeth protection which was a positioning strategy adopted because of competition.

Q. 2) What do you mean by Target Marketing ? What are the different approaches of target marketing ? How will a marketer select any of the approaches?

Ans.) Target Marketing involves breaking a market into segments and then concentrating  your marketing efforts on one or few key segments. It can be the key to attracting new business and making your small business’s a success.

Different approaches of target marketing are :

1. Undifferentiated Marketing : It refers to an approach when a firm produces only one product or product line and targets all of its customers with a single marketing mix. This approach attempts to sell through persuading a wide audience. Example of this market is toothpaste, which are not made especially for one consumer group or segment and are sold in high quantities.

2. Differentiated Marketing : This  refers to the approach of the firms, which produce numerous products with different marketing mixes. These products are designed to satisfy the smaller segments. Most companies do this for specialization and to remain competitive. This marketing essentially requires market segmentation and incurs a higher production cost, inventory cost and marketing costs.

3. Concentrated Marketing : A concentrated market is a subset of the market on which a specific product is focusing. Each market essentially defines specific product features such as product design, price range, production quality and demographics that is intended to impact. This approach is most suitable to smaller firms, which have lesser resources.

Q.3) What do you mean by Segmentation? Differentiate between Segment and Segmentation. What are the basis of Market Segmentation ?

Ans.) Segmentation means to divide marketplace into parts, or segments, which are definable, accessible, actionable and profitable and have growth potential. In other words, a company would find it impossible to target the entire market, because of time, cost and effort restrictions.

Market segment is a market that has been divided into a channel group already. Segmentation is the process of identifying those market traits and dividing that market into a segment.

The bases of market segmentation are :

A. Demographic Segmentation : It divides the markets into groups based on variables such as age, gender, income, family size, occupation, education, religion, race and nationality. Demographic factors are the most popular bases for segmenting the consumer group. Moreover, these factors are easier to measure than most other type of variables.

1) Age : Some companies offer different products, or use different marketing approaches for different age groups. For example, McDonald’s  targets children, teens, adults and seniors with different ads and media.

2) Gender : Gender segmentation used in clothing, cosmetics and magazines. For example, Fairness creams for females, Hair Gels for males and so on.

3) Income : Income is used to divide the markets because it influences the people’s product purchase. It includes housing, furniture, automobiles, clothing, beverages, luxury goods, financial services ,travel and so on.

4) Family Cycle : Products need vary according to age, number of persons in household, marital status, and number and age of children. These variables can be combined into single variables called family life cycle. Housing, home appliances, furniture, food and automobiles are few of the numerous products market segmented by the family life cycle stages.

B. Geographic Segmentation : It refers to dividing a market into different geographical units such as nations, states, regions, cities or neighbourhoods. For example, national newspaper are published and distributed to different cities in different language to cater to the needs of the consumer. Geographic variables such as climate, terrain, natural resources and population density also influence consumer product needs.

C. Psychographic Segmentation : It pertains to lifestyle and personality traits. In the case of certain product, buying behavior  predominantly depends on lifestyle and personality characteristics.

1) Personality Characteristics : It refers to a person’s indicidual character traits, attitude and habits. This type of segmentation is used  when a product is similar to many competing products, and consumer needs for products are not affected by other segmentation variables.

2) Lifestyles : It is the manner in which people live and spend their time and money. Company’s making cosmetics, alcoholic beverages and furniture’s segment market according to the lifestyles.

D. Behavioural Segmentation : In behavioural segmentation, buyers are divided into groups on the basis of their knowledge of, attitude towards, use of or response to a product. It includes segmentation on the basis of occasion, user-status, usage rate, loyalty status, buyer-readiness stave and attitude.

1) Occasion : Buyers can be distinguished according to the occasion when they purchase a product, use a product or develop a need to use a product. For example, Cadbury’s advertising  to promote the product during wedding season is an example of occasion segmentation.

2) User Status : Sometimes the markets are segmented on the basis of user status, that is, on the basis on non-user, ex-user, potential-user, first-time user and regular user of the product. Large companies usually target potential users, whereas small companies focus on current users.

3) Usage Rate : Markets can be distinguished on the basis on usage rate, that is, on the basis on light, medium and heavy users. Marketer usually prefer to attract heavy users rather than several light users, and vary their promotional efforts accordingly.

4) Loyalty Status : Buyer’s can be divided on the basis of their loyalty status – hardcore loyal( consumer who buy one brand all the time), split loyal( consumer who are loyal to two or three brands), shifting loyal( consumer who shift from one brand to another), and switchers loyal( consumer who show no loyalty to any brand).