Role and Relevance of Segmentation and Positioning

Segmentation

As per Philp Kotler segmentation is "Market segmentation is the sub dividing of a market into homogeneous sub section of customer where by sub section may conceivably be selected as a market target to be reached within a distinct marketing mix"

Company rarely Satisfy everyone in a market. Therefore marketer want to start dividing the market in segment. Everyone not go to same hotel, resort, restaurant. Not drive same Car/Bike.

Therefore marketer divided market by:

Geographic Segmentation: It's basis on geographical area like, Nation, State, City Etc. For example, KFC add pure vegetarian dish in his menu for Indians.

Demographic Segmentation: Basis on age, gender, income, family size, education, occupation etc. For example, BlackBarry mobile phone, targeting Business personal, Sport Bike targeting youngsters.

Psychographic Segmentation:  Basis on personality, status, lifestyle, social class etc.  For example, Rolex watch, targeting high profile customer, luxurious lifestyle.

Behavioral Segmentation: Basis on customer buying behavior, like customer usage rate, type, occasions, loyalty, Benefit sought. For example Sensodyne tooth pest targeting those customer who have sensitive teeth.  

Benefit of Segmentation:

Reduce Risk

Increase Market Focus

Increase Market Efficiency

Target Market

Once a company decide segment market, it must decide how many and which ones to target. that's also call targeting group.

Suppose Ms are Market Ps are product in below figure

1. Single - Segment Concentration: Company focus on one product for one market

     m1     m2     m3

P1

P2 *

P3

2. Selective Specialization: Company focus on different product in different market, for example, P&G

     M1     M2     M3

P1                           *

P2 *

P3              *

3. Product Specialization: Company target different market for one product. for example Colgate tooth pest, offers for sensitive teeth, child pest etc

     M1    M2     M3

P1

P2 *       *             *

P3

4. Market Specialization: Company target different product for same Market. for example Colage provide all dental care, like tooth brush, tooth pest, mouth wash.

     M1     M2    M3

P1 *

P2 *

P3 *

5. Full Market Coverage: Company offer all product for all market, for example TATA Group, Microsoft, GM, Coca-cola.

     M1     M2    M3

P1 *       *             *

P2 *       *             *

P3 *       *             *