Market Segmentation and Positioning

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NPTEL
Vinod Gupta School of Management

Consumer Behavior

Module - 3 CONSUMER BEHAVIOR

Sangeeta Sahney Assistant Professor, Vinod Gupta School of Management Indian Institute of Technology Kharagpur, India Email. sahney@vgsom.iitkgp.emit.in

Jiont Initiative of IITs and IISc- Funded by MHRD

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NPTEL
Vinod Gupta School of Management

Consumer Behavior

MODULE 3 MARKET SEGMENTATION AND POSITIONING

MODULE 3: MARKET SEGMENTATION AND POSITIONING ( 2 hours) 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Aggregate Marketing and Market Segmentation Target Marketing Market Segmentation Alternatives available for Segmentation Basis for Segmentation Targeting Positioning

Introduction:
The traditional way of doing business was Mass Marketing which meant offering a standardized product to all the consumers or the entire market. However, it was increasingly realized that customers are varied and unique, with different needs, wants and preferences. Marketers

understood that they cannot satisfy the entire range of customers with the same product and service offering. This led to Target marketing or STP i.e., Segmentation, Targeting and Positioning. STP involves dividing the potential market into distinct sets and sub-sets of consumers and then focusing on one or more segments that can be reached with a markerting mix. The marketer first identifies like-minded clusters of groups that are homogenous within and heterogeneous with other groups (segmentation); then, he selects the most viable segment(s) (targeting); finally, a distinctive image of the product/service offering is created in the mind of the consumer that helps the latter relate to the former (positioning).

Jiont Initiative of IITs and IISc- Funded by MHRD

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NPTEL
Vinod Gupta School of Management

Consumer Behavior

LESSON – 5 MARKET SEGMENTATION AND POSITIONING 1

Instructional Objectives
After completion of this lesson, the student shall know about: 3.1 3.2 3.3 3.4 3.5 Aggregate Marketing and Market Segmentation Target Marketing Market Segmentation Alternatives available for Segmentation Basis for Segmentation

Jiont Initiative of IITs and IISc- Funded by MHRD

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NPTEL
Vinod Gupta School of Management

Consumer Behavior

3.1

AGGREGATE MARKETING AND MARKET SEGMENTATION:

The marketer could either opt for aggregate marketing wherein he could treat the entire population as a single segment, or he could go in for a market segmentation wherein he would identify groups of like minded customers who were similar on one or more base(s) and cater to one or more of such segment(s).

a) Aggregate Marketing:

Earlier the assumption was that customers have similar needs and wants and can be satisfied with a standardized product/service offering. Thus, a standardized product was produced and distributed with a single marketing program or the same marketing mix. This led to a focus on mass production and distribution, which resulted in lower costs; finally resulting in lower prices and higher margins. Aggregate marketing is also termed as mass marketing and undifferentiated marketing.

b) Market Segmentation:

The assumption underlying market segmentation is that customers are unique. They have different needs, wants and preferences. There do exist diverse customer groups

homogenous on certain bases within, but heterogeneous among each other. So, instead of a single standardized product offering, the product and service offerings need to be designed according to the needs and wants of the segment so as to satisfy them better. The marketer’s assumption is that because of the homogeneity that exists within the members of the group, they would react similarly towards a product and service offering and behave likewise to a corresponding marketing program.

Jiont Initiative of IITs and IISc- Funded by MHRD

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NPTEL
Vinod Gupta School of Management

Consumer Behavior

3.2

TARGET MARKETING:

The traditional way of...
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