Loading
Notes
Study Reminders
Support
Text Version

Segmentation, Targeting and Positioning Concepts

Set your study reminders

We will email you at these times to remind you to study.
  • Monday

    -

    7am

    +

    Tuesday

    -

    7am

    +

    Wednesday

    -

    7am

    +

    Thursday

    -

    7am

    +

    Friday

    -

    7am

    +

    Saturday

    -

    7am

    +

    Sunday

    -

    7am

    +

Hello everybody!Welcome to Marketing Analytics course.This is week 3, session 2; we are talking about segmentation, targeting, positioning.This is Dr. Swagato Chatterjee from VGSOM, IIT, Kharagpur, is taking the course for you.So, till the last class we have discussed up to women, so up to this and I will continue.So, another important thing that we talk about is geographic segmentation and this is thepicture that I have collected from social media and the source is given, I am not surehow true and false this thing is but a clear thing that I can see that how geographic segmentationyou can do.So, this is about behavior actually, how people eat, what people eat, whether they are non-vegor veg, so food preferences as simple as that.Now can you see this picture and say that is there a pattern between the reds and thegreens, why the greens are high and why the red are high?You will see that in the coastal area reds are high, why?Because in the coastal area fish is available probably, it is more easy to get food.Probably, I am not sure, I am just giving a reason.And then we will say that also in the hilly regions, the Northeast and in Kashmir, nowit is Ladakh and Jammu and Kashmir, in that place probably also the non-veg eating ismore.So, least it has to do with probably religion or something else, more is something withavailability of non-veg.In the hilly region, probably agriculture is not so common and probably there is morewind that is more strong and that is why that can be one reason, that ok, non-veg is morestrong there.And then vegetarian food habits is more strong in places like let us say Punjab and Haryanaand Rajasthan and Gujarat, so these are the places where people, so geographical region,so these are the places where agriculture is strong and that is why people might liketo.So, even UP, UP is almost 50-50.So UP, there is very strong agriculture, that is why probably that is why the vegetarianfood eating habits are more there.So, all I am trying to say here in this particular case is that sometimes geographical parametersalso define your behavior, so you can do a behavior segmentation based on let us sayvegetarian food habits or non vegetarian food habit.And then geography can explain why, so why this behavior can be explained by the geographicalparameters?Another easy example I will talk about demographic or demographic preferences is the Indian weddingmarket.So, can you tell me what are the various things based on which you can actually find out ordifferent shared people or create segments?So one thing, so you will see there are lots of filters and the filters are actually inmatrimonies website, the filters that you put those are exactly what the demographicfilters based on which people choose different segment.For example, language is one, so you have Bengali matrimonial, Punjabi matrimonial,so on.And then the states, because sometimes language is related to states, so they are correlated.Caste and religion is a very major thing till now in India based on which marriage decisionsare taken.Life-stage is a matter of fact, so whether you are in a early stage let us say 20s or30s or 40s that also decides.So, I will not say age, I will say life stage.Then past history, so there are people who are divorced let us say who are widows, widowor whatever, so they might prefer people who are of similar history of this thing.So, their part history whether you want a person who has this kind of history or not,also is something that creates the market, that segments the market.Educational background, we have IIT, IIM, Shaadi dot com.So which is like for premier, I would say students on premier institutes we have a separatematrimony website.So even that becomes a segmentation strategy or segmentation variable when you are talkingabout market and then profession is obviously.Geographic segmentation is something that is also important and we have seen McDonaldÕschoosing their geography which geography they will open up and which geography they willnot open up based on this kind of segmentation strategy.The next point is psychographic, psychographic talks about your overall psychology.So it talks about your preference, the traits, lifestyle, values and etcetera.For example, Indian music customers we will talk about them.There are fanatics, there are enthusiasts, there are casuals and there are indifferent.So based on how much I would say based on how much focused on, so fanatics are peoplewho are very focused about, so they do not have very much width but they have very highdepth, so that is something that matters for fanatics.On the other hand, for enthusiasts, they have a little bit more depth, less depth and morebreadth, so as the depth comes down and as the breadth, width goes up, I actually listento multiple different kinds of music but I do not actually focus on the nitty-grittyof the music.As I do that I come down from fanatics to indifferent and it is almost it is like apyramid only, the fanatics are 14 percent, enthusiasts are 25 percent, so these are thisis how, these are actually preferences based on which I am getting segments.So, how I will know about them?I will have to track what kind of movies they are, what kind of music they are listeningin Gaana dot com, or what kind of, I would say in MeraEvents dot com what kind of ticketsthey are buying, of which kind of concerts, and etcetera.So, those kinds of things can give an idea who is a fanatic, who is an enthusiast andso on.And when we are talking about western music, there are people who are more engaged, lessengaged, that is another thing.Another thing that comes up is more social, so whether you want to talk about your musicpreference or not, do you want to, this is the picture that has been taken from Bandsintownwebsite and there are more social to less social and then more engaged to less engaged.And you, in these two parameters, you have people who are super fans, who are there arepeople who are plugged Indies, soloist.Soloists are actually, they do not, they are not social, they do not prefer to go with,they want to enjoy their music alone and etcetera.There are people who are dedicated diehards, so they are passionate about rock music andstuck in different time period at all.So they do not, so these old school dedicated diehards go to fear shows but are willingto invest when they do.So, they want to pay a lot and then there are tag alongs, tag alongs are basically thosepeople who will go with somebody else, somebody elseÕs preference matter more than theirpreference and they we will go with somebody else and go there and enjoy.So, enjoying the social, enjoying is more matters to them rather than their preferencetowards the music.And then comes the behavioral segmentation, in the behavioral segmentation this is somethingI am talking for so long, that behavioral segmentation matters and so there you actuallytrack peopleÕs behavior and that is the closest thing to the purchase and thatÕs why thisis something that matters more.So where we are marketers dividing buyers into groups on the basis of knowledge abouttheir attitude towards a product, use of the product and response towards the product somethinglike that.So, we generally try to find out the needs and benefits of the customers and we alsofind out the decision roles, so I talked about that in our previous point that there willbe some people who will are the initiator who will just say that ok this thing shouldwe buy and there will be some people who are influential, who have more social connectionsand they influence others to buy as well.When somebody actually makes the call that ok, whether it will bought or not.In household case, it is sometimes the bread earner.In other cases, depending on the social environment in the family or social environment in theoutside, who is the person it varies.And then there is a buyer who goes and actually buys it and why that matters?Because actually when he is buying, in that moment of truth things can change.So actually buyer is also an important thing, and then comes the user who will actuallyuse it because user, if you do not consider them, then the post purchase satisfactionis not there.Then further the customer relationship management and etcetera goes for a toss.So, that is also important thing.You have to know what is the role of the various persons in the purchase decision making process.So that is also something that we can try to track out from a customer segmentationstrategy.How then matters?So this is the classic example of this behavioral segmentation, so let us say people when theybuy the pregnancy test kits, there can be two reasons.One is that it is a planed pregnancy that they are trying to be pregnant and they arelooking for a baby and at that point of time you go for a pregnancy test, you are veryhopeful in nature.On the other hand, if you are unplanned pregnancy that is something which is very difficultfor you, it will be difficult for your mental problem, for your social problem and for sometimesyour physical problem as well.And if you do not want to have a baby and you got pregnant, so in that case it is afearful situation.So both are hopeful and fearful situation.Now the product is same, in the same product is where people use the same product in twodifferent situations with two different uses.The usage of these two products are different, so their buying pattern are different andetcetera.So then there is a brand name called Conceive and then Fact Plus, Fact Plus is more informative,so I will give you information that whether you are pregnant or not and in this case (Conceive)I am giving you a feeling that I will give you information but along with then I am alsogiving you a very lots of dreams and hopes and whatever these and that.So thatÕs why Conceive, and then the packaging is different.One case, the packaging is very beautiful, there is a bird or a flower or a babyÕs faceon the package.In another case, it is very stock, it is black lettered, so more informative, more fear generatingand etcetera.One is kept just beside in a middle store if it is a big middle store, it is kept justbeside the probably condoms or contraceptive pills and etcetera.In another case it is placed in a probably near ovulation testing kit or any other placewhere these where people actually are tracking about their pregnancy.So, in those kind of places it is kept and the most important part is the price, in onecase it is hopeful.It is something that you people actually pray for quite some time and thatÕs why when thathappens, you are willing to pay more, it is a mood setting kind of thing.You will pay more when your mood is happy, so I will charge you more in that case andthe chances of you being pregnant when you are trying to be pregnant is high.So that is why even if I pay you more, this kind of problem will not happen that, ok,you tested and you are not pregnant.So, then I can get 19.5 dollars, on the other case the charges are less.Now these can be depending on social situation, this can be altered, you can say that ok,if they are fearful, people can charge more, that can be altered but I am not sure whetherthat happens.I will give you another example, so I have seen this thing in a LinkedIn post by someone of my connection, but he is showing that same company, absolutely same product, thisis actually ear plug, not ear plug, I would say earphone.Now earphone can also be used with mobile phone and laptop.Now if you are a laptop user and if you have gone to a let us say I do not know Dell storeand buying this thing, buying earplug.And the same thing you are going to probably Samsung store or not even Samsung store, letus say mobile store dot com kind of store and there you are buying the earplug.All I am trying to say is that they know that this guy is coming to, this guy is laptopowner and this guy is a mobile phone owner, so there is a difference between, always thereis a difference in an average laptop owner and an average mobile phone owner.So, the same product when it is put in the laptop, the design absolutely all the componentsare same, one is in black box, one is in white box, one is probably 200 rupees, another is400 rupees.Because mobile phone people might not want to pay 400 rupees.On the other hand, laptop accessory, 400 rupees is ok.So the same product is being sold in two different places based on the usage.So, all I am trying to say is these are all behavioral segmentation.So usage also depends on the occasion of use, the user status, usage rate in whether youare a frequent user or non-frequent user.The buyer readiness stage is more applicable for technology products, whether you are readyto adopt this kind of technology or not, the loyalty status whether you are loyal customeror whether you are a variety seeking kind of customer and your attitude.So, all of these related variables we consider when we do behavioral segmentation.Now the last thing that becomes important is when you will say that a segment is goodenough, it has to be identifiable, accessible, appropriately sized, differentiated, stableand measurable.Stable means, if I change the method or if time passes, this segmentation should be there.Identifiable means, there should be so when we do segmentation and then after creatingthe segments we define the segments, we have to define with identifiable attributes, whatis identifiable attribute?Demography, tangible attributes, demography, geographic, sometimes behavioral, and psychographicalso.So, more tangible attribute should be there so that I can identify when a person comesin my room or comes in my company, comes in my online e-commerce, I will know that whichtype of customer he is.And it has to be differentiated, differentiated means that people who are of different groups,so let us say there are two type of segmentation.In one segmentation, the mean is here and the segmentÕs mean is here, same distancein both the cases but in one case these are the two segments.In another case, these are the two segments, which segmentation is better?This is better because this is where the two segments nobody, there is no middle area,no overlapping area, so when there is no overlapping area, that means what I am saying that peoplewho are in the same segment are closer to each other.People who are from different segments are very away from each other, so that is whatis important.So that is what comes in the differentiated part.So when I am saying that there should be differentiated, that means this.And then we decide, now we have to decide that which segment I will target.And target when I am deciding as I was telling, that it is not based on the money that youare getting, whether from the tea, hot tea or the ice tea.It also depends on whether you are capable, whether you have enough resources to capturethat market or not.So segment size, growth, value of the segment is one side.Current company position and ease of entry of the segment, resource part is one of theside.And ease of competitive entry in the segment, number and strength of competitors, all ofthese things together create a matrix like this.One is segment attractiveness, you define your way, I will not say that.Segment attractiveness, another is competitive strength.In segment attractiveness, it is high to low; in competitive strength also it is high tolow.Competitive strength means how well you are there to capture the market.The segment attractiveness means how attractive that can be, the overall revenue, the revenueinto the individual revenue, and overall profit that you can make if you capture the segmentetcetera.So whenever you are high high, so I would say whenever you are above this level, soif you draw a diagonal line like this, so all this, this one the perfect one, so youhave to go from stay away to perfect, this direction you have to move when you are targetingwith segment.So, we actually find out lots of segments and then we position them those segments inthis matrix to see that what is their position and based on that we try to decide that whichsegment I will target.For example, simple calculation, so let us say Barry, Jill, Buzz, there is a classicB2B, classic case on best buy.You can search for best buy customer centricity in Google and you will get the case studyfor this.I am not going to do that, this is something, itÕs an assignment, you try to do that.And then there are these five segments; Barry, Jill, Buzz, Ray, and BB4B.And their yearly purchase values are given, the total percentage of customers who belongto this segment is given, the margin is given, number of competitors, and capability to servehigh or low So, these values are given.And now I will, so whom should I target, basic thing, whom should I target?So I based on this the fast food columns, I have to decide that whom I will target.So, I will quickly do this.What I will do is I will create a new Excel file, so STP let us say.And I will copy this and I will paste it here.Let us paste as, ok so these are my, this is the values that has been given to me, socan I quickly calculate something?So this is yearly purchase, this is percentage of total customers, margin and number of competitors.So, how much money I can generate out of this?The money I can generate is, just check.So this is my yearly purchase, if there are 100 customers then this into this is my totalrevenue into this by 100 is my profit.So this is my profit and divided by number of competitors plus 1.If I assume that every competitor gets the same thing then this is my total money thatI will get and so money earned and if I just drag it then this is what I get.So which one is the highest, most attractive?This is highly attractive, fair enough and this is the lowest, ok, so this is in order.So let us say this is high, this is medium and medium and this is low and low.And then this is the attractiveness.And then what about the other one?The other one is this one, so this is the capability to serve the segment, so this isthe capability to serve the segment.So, now this is high medium, high high is nobody so I cannot capture that but high,then what I will see?I will either capture high medium or medium high, any one of these things I will choose.So, because this is the next two quadrants and the rest of the things, well, I will notchoose.I will choose either target Barry or target Jill depending on the situations.So, this is something that I am trying to say that, this is how we decide that whichsegment we will choose and then based on this if I choose the segment then the next jobis to position my product in that particular segment.So, positioning means you have to create your identity.So just tell me in your mind or take a pen or paper and write down, I will show you someproduct categories and the first brand that comes in your mind just write down in a penand paper, I will show you certain product categories, the first brand that comes toyour mind.Soft drinks, write it down; coffee, write it down, and then bottled water and then beer.DonÕt worry.Even if you donÕt consume, just write it down whatever name comes in your mind andthen just check that whether these are the brand names that came in your mind or not.Some may have, for some it might match, for some it might not match.What I am trying to say is that these are the brands which are in top of your mind andthis is something that when you try to position yourself, this is something is your goal thathow to whenever somebody thinks about a product category, I should be in the top of his mind.The more I am in the top of the mind of the customer, the more is the chance that I willbe there in the choice set and the more I am in the choice set the more is the chancethat I will be chosen.So, based on that, people try to position themselves when they are targeting a segment.So, this is called share of, there is share of market which is market share, then shareof mind and share of heart.These are certain things that they try to achieve and how they try to achieve?For example, this is the customer preference so there is competitor A, competitor B andcompetitor C and there are certain five factors and based on that he give rating.So, E means excellent, G means good, P means poor.F means fair.So, customers you have to see, you have to go and ask the customers and how you ratethese things?Based on if I am competitor A versus B or versus C, so, you have to ask the customershow they prefer their, your competitors.You are, let us say you are coke and your competitor is Pepsi and then let us say ThumpsUp is also your own product but still might sometimes cannibalize coke and then somethingelse.And you want to know that ok, the taste, the price, the packaging and blah blah blah, whateveraspects, how people are rating?There should be some ratings that you can collect.And the average rating is actually posted here.And then based on this, you want to create point of difference and point of parity.What is point of difference?Point of difference is the attributes or benefits that consumers strongly associate with thebrand and say that they positively evaluate and then say that this is the reason I amchoosing this, this is the reason why I am choosing let us say coke verses Pepsi becausecoke is like this or because Thumps Up is like this.So that is what called point of difference which is which should be desirable, deliverableand differentiating and so on.On the other hand, for example, let us say people at one point of time this point ofdifference was done by Apple when Apple and Nike came into together and created a productwhere you can actually run and then during the running depending on the speed of therunning, the music will change.So that is something which is was a point of difference.FedEx, first time FedEx introduced the overnight express shipping which is the first introductionwhich was a point of difference.For that people chose FedEx over DHL or various other, many other logistics firms at certainpoint of time.And then what is point of parity?Point of parity is attitude or benefit which is needed to think, that ok, this brand belongsto this product category.So the brand but may in fact be shared with other brands.For example, let us say if you are YiPPee and if you want to be considered as equivalentto noodles, instant noodles, there has to be certain characteristics.So, those are the things which are category specific, correlational, sometimes competitivein nature, those are called point of parity.So, point of parity is required to be, to target the segment and point of differenceis required to position in the segment.So to be relevant for a segment, you have to have point of parity.To be different from your competitors, you need points of difference.So that is how you create the mixture of your product attributes.For example, another example of point of parity and point of difference is, for example, atone point of Tanishq was giving an ad, what Tanishq was saying that, ok, so you can trythis thing, so there was Alia BhattÕs ad.I think Tanishq, I forgot this thing.There was Alia BhattÕs ad where Alia Bhatt is actually using, trying out jewelry at homeand she is like a small girl who is behind the closed door, she is dancing with the jewelryand in her fantasy world she is doing this and that and then she comes out, the representativefrom the company is sitting outside the room.She comes out and says like in a very I would say formal voice that ok, I will take this.So all I am trying to say is that you can, you are allowed to be childish or you areallowed to be young when you are buying jewelry or you are allowed to be in a fantasy world.And you can be that in your home.So they are trying to create a point of difference by saying that you can be at your home andthey are trying to create point of parity in terms of youngness by showing this fantasything.So this, they are the thing that you are dancing and jumping and this and that, she is tryingto say that ok, my products, my brand is young, my products are young, my products are contemporary.We are not traditional because jewelry market is heavily traditional.So, we are not traditional jewelry sellers, we are very young, we are energetic and etcetera.So, that is how we are creating point of parity with the all other products which are alsoenergetic in nature, energetic in their view.But I am creating point of difference from my category by saying that I am energeticthat is number one, I am nontraditional that is number one.Number two is you can try at your home and itÕs free.So, that is, those are all the stuff which are in point of difference.And then based on this you try to position yourself.So we try to create something called perceptual map and we try to position yourself in thecurrently given offerings and see that how good we are or how bad we are.So that is all about segmentation, targeting, positioning and I talked about a lot.Now all of these things are a little bit flowery, we will do the maths now, how to do segmentationand how to actually create I would say targeting from those segments, whom I should targetand once I decide that, how I will position?So, how to create perceptual maps and how to actually position your product in the perceptualmap, this is something we are going to do in the next videos.Thank you for being with me.This is Marketing Analytics course and I hope you are enjoying, we will continue in thenext video.