Customer Segmentation
& Positioning
Effective Methods of Segmenting
& Targeting the Potential Customers
Why Segmentation?
Customer Segmentation –
A firm can NOT satisfy every need of every customer in market
It is not practical and viable to target all the customers al the time
Identify set of customers, who when targeted would be most profitable
vis-à-vis Marketing costs.
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Customer Segmentation
Customer Segmentation –
Technique by which customers are aggregated into groups, such that –
Customers are homogeneous within the group
but, heterogeneous across different groups
Different segments have –
Different needs and expectations,
May require different versions of same product (different price, different
places, different media)
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Customer Segmentation Process
4-step Customer segmentation process –
1) Identify basis for segmenting the market
2) Define customer segments and profile for each
3) Select Target segment
4) Develop marketing strategies for target segment
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Customer Segmentation
Different bases for segmentation -
A. Geographic
B. Demographic
C. Behavior based
D. Psychographic
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Geographic Segmentation
Use Geography (spatial variables) to divide market
Example, Indian market, North Market, South Indian Market
Example….?
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Demographic Segmentation
Use characteristics of population like
• Age, gender
• Education,
• Marital status,
• Household type
• Income level
• Social class (High/Mid/Low, etc.)
Example, lifestyle product companies, consumer goods companies,
etc.
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Psychographic segmentation
Attitudes, values and interests that shape a consumer lifestyle
Example,
Health conscious consumers
Time pressed consumers
Environmentally conscious consumers
Examples …. ?
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Behavior based segmentation
Based on knowledge, usage, attitude, towards a product
Variables for behavior based segmentation
Occasion – Traveling in breaks/holiday season, weddings, etc.
Benefits – For family/for self/social animal, etc.
User status – Beginner/Expert/Intermediate
Usage pattern – Heavy user/Medium/Light user
Loyalty – Brand Loyal/Admirer/Value Seeker/Switcher, etc.
Examples …. ?
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Compare Different Segments
Generation Traits Characteristics Examples
Traditionalists Patriotic, loyal, faith in Brand loyal, expect value for TITAN watches, Bajaj
institutions money Scooter, Tata salt, etc.
Baby Boomers Idealistic, competitive, question Value status, willing to try new Fogg Deodorants,
authority brands, limited time iPhones, LG washing
machines, Sony TVs
Generation X Eclectic, self-reliant, skeptical, Value individuality: need Facebook, Gmail, BMS,
highly adaptive to change and respect and safety and value PVR cinemas, etc.
technology those who can provide it
Millenials Global, cyber literate, media Savvy consumers, value Tinder, Snapchat,
savvy, environmentally opinions of peers, loyal to Learning apps, Netflix
conscious their brands
(*Source: U.S. Census Bureau, American Fact Finder: Age Groups and Sex 2010 & BridgeWorks, 2000)
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Target Market
A single firm can NOT satisfy every customer need, hence, it identifies
those segments it can satisfy in profitable way.
TG – part of the “available market” a firm decides to pursue
• Example,
Clinic Plus – Basic hair care, mass production, price sensitive – Lower Income class
Sunsilk – Shiny hair, everyday use, value for money - Middle class
Pantene – Attribute, dandruff control, silky hair, god looking hair - Higher middle
class
Tresseme – Professional hair, party look, trend setter – Higher Income class
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Positioning
• Designing a company’s offerings and image to occupy a distinctive
place in the minds of the target segment.
• Brand Positioning – “How customers perceive you”.
• Ex.,
TATA Motors , Coca Cola, Reliance Jio, Infosys, Paytm, Samsung, Xiaomi
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Positioning
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For Management Consulting/Strategic Advisory
• Vishal R Kahate
Managing Partner, BrandPrism® Consulting LLP
PGDM - IIM, Calcutta (2014-16)
Phone : +91-9769560216
• Email: [email protected]
• URL: www.brandprism.in
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THANK YOU!
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©BrandPrism
Consulting LLP
