Unit 3.pptx on Segmentation Targeting and Positioning

It is a detailed ppt on marketing

1. Segmenting Targeting positioning Unit 3

2. Introduction to segmentation All customers in a broadly defined market don’t have the same needs. But successful marketers decide about the products to offer and the markets to be serviced. One size doesn’t fit everyone very well. “One cannot be everything to everyone, but can be everything to a 2 selected few” and that no two individuals can be the same. These are the foundations for segmentation. For this purpose market segmentation is core to marketing. Various firms have achieved leadership positions through effective segmentation and targeting.“Once you discover the most useful ways of segmenting a market, you have produced the beginnings of sound marketing strategy”.

3. Meaning Segmentation process consists of three stages: Segmenting, targeting, and positioning. The three are popularly known as STP in marketing. . Market segmentation is the process of dividing a heterogeneous market (aggregated) into homogeneous sub unit (segregated). Market segmentation is the identification of portions of the market that are different from one another or share a similar set of needs. Thus, market segmentation is the process of grouping similar consumers or business customers together in a market segment, in which the consumers or business customers exhibit similar requirements and buying characteristics.

4. The purpose of segmentation is to identify and target specific groups more effectively with tailored marketing strategies. By understanding the unique needs and preferences of each segment, companies can create more personalized and relevant marketing messages, improve product development, and allocate resources more efficiently. For example, a company might segment its market based on age, targeting younger consumers with different products or messaging than older consumers. Or, a company might use behavioral segmentation to target frequent buyers with loyalty programs or special offers. Overall, segmentation helps businesses better understand their market and engage with customers in a more meaningful way.

5. Importance Improved Customer Relations: Segmentation will enable the buyer to find the products most fitting to their physical or/and psychological needs. Customers finding products more tailored to their needs, would be more loyal to the firm (s). Since segmentation helps to meet the customer needs, expectations, aspirations and share of wallet, market segmentation is customer-oriented. Perfect-like Marketing Mix : Since market segmentation assists in defining shopping habits (when, how much and how many times), price sensitivity and the benefits required. This helps in making marketing mix more accurate. Better Resource Allocation : Since Segmentation’s objective is to serve customers better and earn more profits, the firm would like to allocate resources more efficiently. Segmentation reveals who not to target and which customer groups will be best recipients of resources. Thus, market segmentation will lead to better marketing.

6. Competitor Analysis: To compete better in the market one must have complete knowledge of the competitors, the segments being served by them, and their working practices. It enables to know the segment which our organisation can serve better. If this kind of information is overlooked we may find ourselves in head-on collision with large competitors. Especially, the medium-sized firms can grow rapidly through strong positions in specialised market segments. By insightful segmenting and targeting, companies set the stage both for serving customers well and minimising the impact of competition. Thus, segmentation is a source of competitive advantage and enhances awareness of external market trends and competition. Taking care of Dynamic Environment: Customer segments, which are likely to frequent changes due to changing environment, can be taken care of in strategic marketing planning. In fact, large companies with resources at command are leaving mass marketing.

7. Focus Marketing Communication: Segmentation establishes commitment and single-mindedness with the organisation : one vision, one voice, harmonised messages. Segmentation allows an organisation to identify media channels competent to reach the target group. Young women interested in fashion are more likely to read ‘ Famina ’. Thus marketer can select this medium instead of going in for mass media. Measurement: To measure the market share, growth, specification of target customers, recognition of relevant competitors, to formulate marketing objectives and strategies, segmentation is essential.

8. Bases of Market Segmentation It is a mirror through which the population of customers in an industry are divided. Thus it is an art. The variables on which segmentation can be done are numerous. To define customers who they are, they are segmented on the basis of demography; to define where they are, they are segmented on the basis of geography; and how they behave, they are segmented on the basis of behaviour ; and to segment differently we have to go in for innovative segmentation.

9. Types of Segmentation Geographic/ Demographics Segmentation- Geography and Demographics, if clubbed it is known as geo demographics. It consists of defining customers according to: (a) Their country of birth and their location, dividing a country into regions, states. Location does not mean that all consumers in a location will behave the same way, but the approach helps identify certain general patterns. (b) Important variables according to Geography may be global, global regional, national, National regional, city/ state,i neighbourhood / local, topography, and climate. (c) In case of large companies these regions may be further subdivided into sizes –small, medium, and large

10. In case of international marketing or global business different countries might be taken up as different market segments. e) Another basis may be geographical density – urban, suburban, and rural. It may be a good basis as the low-density markets require different price, promotion and distribution strategies. India’s urban population may be further divided on the basis of cities - Tier I (8 cities: 8% India’s population), Tier II (26 cities: 4% of India’s population), Tier III (33 cities: 7% population), and Tier IV (5094 cities: 11% population). The rest 70% is the rural population residing in India’s 6,38,000 villages across India. f) Next basis may be climate – warm, cold, and rainy. g) The next base may be locality.

11. In case of Indian Railways, they have Northern Railway, Southern Railway, Eastern Railway, Western Railway, North-Eastern Railway, and Central Railway and so on and so forth. Customers in different regions may have different cultures and may require marketing differently. India is a country of diversities. In terms of types of commerce (Tourist, local worker, residents, businesses), retail establishments (downtown shopping districts, shopping malls), competition (underdeveloped, saturated), legislation (stringent, lax), and cost of living /operation (low/moderate/high) are the other bases of geographical demographics). Demographic segmentation is good to guide the media plan and help the creative agencies to understand how to bring the segment to life.

12. Personal Demographics segmentation- Populations are often broken down into categories on the basis of age, gender, ethnic origin, education, income, occupation, Religion, Family size, Stage of family life cycle, social status/class, etc. In Demographic segmentation, market is divided into segments on the basis of readily observable personal characteristics such as age, gender, ethnicity, etc. It offers a wide variety of bases for segmentation. Age: Today virtually every age band from life to death is the focus of a marketing campaign. The requirements are different in different age groups. In case of readymade 7 garments, it may be for new borne babies, children, teens, youth, middle age people, old people. All of them have different needs. Young people like to make use of credit cards. Older people use cash. Children consume more of carbonated drinks. That is why – Youngistan and ‘ YehDil Mange More”.

13. Segmentation by age can be done like- School age children and College going children, Preteens and Teens, Generation X, Generation Y, Baby boomers, and seniors. Generation Y or the millennial generation, generally defined as people born after 1980, has an approach towards life that is distinct - much different from what we have witnessed till now. They are also a generation that is not afraid to embraces change, and that puts them at an advantage, given the dynamic environment we are working in. This is also a generation that has grown up with information at its fingertips, and isn't afraid to use - or share - it, to influence and be influenced on where to direct their spending. According to a recent report by IBM, the millennial workforce is slated to represent 50 per cent of the global workforce by 2015, and about 76 per cent by 2020. It is, therefore, imperative to understand this generation's approach as they redefine businesses and organisational structures.

14. Gender: In case of clothes, it may be male and female, In case of fashionable clothes the two segments vary a lot. Women prefer scooties , and boys use motorcycles. By 2015, India will have 80 million working women in the age group of 18-44 year age band. The roles are changing because of womenfolk joining working groups. Now males do many jobs earlier performed by women folk, thus blurring the lines. 8 There are products where targeting may be at women, but we Indian males, being not individualists, use soaps, shampoos, talcs , skin creams and moisturisers targeted largely at women. Thus, Indian males act as surrogate users. At the same time, a section of women are using male deodorants. Hindustan Unilever Limited has Axe for male and Lux deodorants for women.

15. Family Structure: The family life cycle concept charts the progress of family development from birth to death. People at different stages of different life cycle have needs different from each other.A family may be in bachelor stage (young and single people), newly married couple -marriage alters the needs. Married couples need white goods and durable goods to begin with, Full Nest I (young married couple with dependent children - once a child is born, they would require baby food, baby clothes, toys, etc.), Full Nest II (older married couples with dependent children), Empty Nest (older married couples with no children living with them) and solitary survivor (older single People). Wells and Gubar (1996) have put forward an internationally recognised classification. Race: The ethnic background is a good base for segmentation. Hindus celebrate Diwali , and Chinese celebrate their New Year differently and the two are good segments.

16. Politics: Different political party members have their liking for different members and commodities. For example Congress party members in India prefer white caps, Samajwadi Party goes for red cap, BSP members want a blue cap, whereas BJP members wear a saffron colour cap. Family Size – Two segments may be small family and the large family segments. Smaller the family small size packs would be preferred, and larger the family larger packs would be needed. The Psychological Life cycle: Here the chronological age may not necessarily be the factor of greatest importance in determining consumption patterns. Rather it is the transformation of attitudes and expectations that becomes a more important factor. The emergence of’ ‘kid adults’, and old youngsters represent the psychological live

17. Segacity : It is a refinement of the family life cycle grouping system, showing different behavioural patterns and aspirations to people as they proceed through life. These stages may 9 be Dependent, Pre-family, Family, and Late. The family and late may be further classified into Better off and worse off and these two bases may be further classified on the basis of occupation as White Collar and Blue Collar. Type of neighbourhood and dwelling: Geo demography may also be used for segmentation by focusing on local neighbourhood geography. The proposition is that the neighbourhood area in which a consumer lives will be reflected in one’s professional status, income, lifestage and behaviour . People living in different localities or different types of dwellings have different needs, but in one kind of dwelling situated in one locality they have similarity of needs

18. 3. Socioeconomic: The populations are broken down according to income, employment, education, social class, home/car ownership, etc. Income: Segmenting by income is very popular, especially for cars, luggage, vacations and fashion goods. There may be people belonging to lower class, middle class and high net worth individuals. Volvo in India targets on the 5% high net worth individuals. The housing boards offer low income houses, middle income houses and high income houses. The base for segmentation is income. Education: College-going students have different demands than the people who after good higher education join the companies as executives, and those who are illiterates.

19. Occupation: The requirements for executives and a school teacher would altogether be different. The executive class would require Armani suit, whereas the other one would require a suit of any brand which is cheaper. Social Class: Social class indicates one’s social position, and is objectified through income, occupation, and location of residence. A policeman might be earning more than a college professor, off course through accepting under the table challans , but he belongs to a social class lower than that of a professor. The social class of professor will demand purchases of items and place of purchases different from that of a policeman.

20. Behavioural Segmentation- David Kurtz likes to call it as Product-related segmentation. Emphasis is placed on differences in peoples’ values and not on differences in socio-demographic profiles. It takes into consideration the purchasing behaviour as the starting point, how frequently they buy, how loyal they are, what benefits they seek, when they buy, etc. These are: Usage status: The segmentation may be done on the basis of ‘light’, ‘medium’, and ‘heavy’ users of a product. The other way can be non-users, first-time users and regular users. Airlines ‘frequent flyer’ schemes are based on this philosophy. Brand Loyalty Levels: The segments may be made on the basis of ‘Hard Core Loyals ’ (same brand every time), ‘Soft Core Loyals ’ (loyalty divided between two or more brands), ‘Shifting Loyals ’ (Brand switchers), and ‘Switchers (no particular preference).

21. Benefit sought: The kind of benefit one wants to seek. Benefit segmentation depends on benefit sought is identifiable, using these benefits , marketers must be able to divide the customers into recognisable segments, and one or more of the resulting segments must be accessible to the firm. For Example in case of baking soda one may be using for bakery products, where the other one may be using as deodorant in the fridge. Occasions for Purchase: Some of the products are purchased only on certain occasions. These occasions may be used as the basis for segmentation. Gifts are normally exchanged on Diwali , - but colours are purchased only on Holi . Demand for dates increase during the month of Ramadan. On the occasion of wedding lot of things are purchased including Lehenga and Choli . The segmentation may be done not only on the basis of culture, but also the subculture (religion, race, Nationality). Occasion can thus be an event

22. Frequency of purchasing: People may buy for the whole year, or for one quarter or one month or one week. In India there are some households who buy rice at the time of harvesting for the whole year. They buy in 35 or 50 kg. Bags, Those who buy only for a month buy 5kg. Bags. Thus, frequency of purchasing is a good basis for segmentation. Willingness to buy: A few people might not know the product, a few know it but never used, and some people know it and have used it. Each one of these segments requires a different marketing strategy. Season: In India, we have three seasons- summer, rainy, and winter seasons. For each season we have different requirements. Air conditioner is purchased only for summers. But gone are the days when players in the air conditioner (AC) segment would market their products only during summers. Now, with erratic weather conditions, AC sales take place throughout the year.

23. Psychographic Segmentation: Psychographic segmentation examines mental characteristics and predispositions connected with purchasing habits. It is related with similarity of values and lifestyles. It is concerned with the interests, activities and opinions of consumers, and is often related to life styles. Consumers buy things because of the personality, lifestyle and the consumer values they hold. People who think about the world in a similar way will respond similarly to the marketing mix . Personality Characteristics: Advertising agency, Young & Rubicam has classified customers into Mainstreamers (not to stand out of crowd), Reformers (creative and caring, many doing charities, and buying private labels), Aspirers (young, ambitious, and keen to get on, and buy latest designs and models), and success achievers (achieved in life, feel no need for status symbols or bother for what people will say). Companies marketing cigarettes, liquor, cosmetics and high priced watches create a personality for the brand to match it with the personality of the customer.

24. Lifestyle: Lifestyle and consumption are closely related, and therefore, marketers adopt it for segmentation. Lifestyle means approach to life. AIO (Activities, interests, and opinions) reflect lifestyles of people. People are grouped on the basis of how they spend their time, the importance of things in their surrounding, beliefs about themselves and broad issues and some demographic characteristics, such as income and education. The most popular consumer lifestyle framework is a survey from SRI Consulting Business Intelligence. It classifies customers into eight groups – Innovators, Thinkers, Achievers, Experiencers , Believers, Strivers, Makers, and Survivors. A detailed profile of customers is necessary for developing effective advertising campaigns. Values: Values reflect the realities of life. Researchers at Survey Research Centre at University of Michigan have identified nine basic values: Self Respect, security, Excitement, Fun and enjoyment in life, having warm relationships, Self- fulfilment , Sense of belonging, Sense of accomplishment, Motives/hobbies, Knowledge and being well respected.

25. Targeting In marketing, "targeting" refers to the process of identifying and focusing on specific groups of consumers who are most likely to be interested in a product or service. This involves segmenting the broader market into smaller, more manageable groups based on various criteria such as demographics, psychographics, geographic location, and behavior. Once these segments are identified, marketers tailor their strategies and messages to appeal directly to these targeted groups, aiming to meet their specific needs and preferences. The goal of targeting is to use resources efficiently and effectively by directing marketing efforts toward those who are most likely to respond positively, thereby increasing the likelihood of achieving better results and higher returns on investment.

26. Types of Targeting Mass Marketing Strategy: When differences in customer needs are small or demographics are not distinctive, a business may decide to use a mass market strategy or ‘undifferentiated marketing’. A firm may produce only one product or product line and promote it to all customers with a single marketing mix. The firm ignores any segment differences and design a single product-and-marketing programme that will appeal to the largest number of consumers. It means to offer a single product/service/idea across different market segments. It is also known as undifferentiated marketing. Coca Cola, Caterpillar, Sony, Marlboro, Philips, Toyota, McDonald’s, Volvo and Kodak use global marketing strategy. However, these companies do modify their products and communication. The primary purpose of this strategy is to capture sufficient volume to gain economies of scale and a cost advantage.

27. Large segment strategy- The "Large Segment Strategy" is a marketing approach where a business targets a big, broad group of customers with similar needs or characteristics. Instead of focusing on small, specific groups, the company creates products or services that appeal to this larger audience. The goal is to reach more people at once, making it easier to grow and capture a bigger market share. This strategy often works well for products or services that have widespread appeal and don't need to be highly customized for different customer groups. Coca-Cola : Instead of making different drinks for different age groups, Coca-Cola creates one main product that appeals to a broad audience—people of all ages, from kids to adults. Ford Model T : Back in the early 1900s, Ford focused on making one car model, the Model T, that was affordable and useful for a large group of people. This helped them reach a broad audience and become a leader in the car industry.

28. Adjacent segment strategy- The "Adjacent Segment Strategy" is when a business expands into a new market or customer group that is similar to the one they already serve. Instead of creating something completely different, the company tweaks or adapts its existing products or services to appeal to this new, but related, group. This allows the company to grow by reaching more customers without straying too far from what they already do well. Examples: Apple : Initially, Apple focused on computers, but then expanded into adjacent segments like music players (iPod), smartphones ( iPhone ), and tablets ( iPad ). These products were related to their expertise in technology and design but reached different, yet connected, customer groups. Nike : Nike started with running shoes but then moved into other sports like basketball, soccer, and even casual wear. Each of these new segments was related to their core business of athletic footwear and apparel, allowing them to reach more customers.

29. Multi segment strategy- The "Multi-Segment Strategy" is when a business targets multiple different groups of customers, each with its own specific needs or preferences. Instead of focusing on just one type of customer, the company creates different products, services, or marketing approaches for each group. This allows the business to reach a wider audience by catering to the unique needs of various segments. Toyota : Toyota sells different car models to different customer segments. For instance, they offer the Camry for families looking for a reliable sedan, the Prius for environmentally-conscious drivers, and the Lexus brand for luxury car buyers. Each segment has different needs, and Toyota caters to them all. Procter & Gamble (P&G) : P&G offers a range of laundry detergents like Tide, Ariel, and Gain. Each brand targets a different customer group—Tide might be aimed at those looking for strong cleaning power, while Gain focuses on customers who prioritize fragrance. This way, P&G can appeal to different market segments.

30. Small Segment strategy- The "Small Segment Strategy" is when a business focuses on a very specific, narrow group of customers with unique needs or preferences. Instead of trying to appeal to everyone, the company creates products or services designed specifically for this smaller group. The idea is to deeply understand and meet the needs of this niche market, which can lead to strong customer loyalty and less competition. Rolex : Rolex targets a small, wealthy segment of customers who are looking for luxury, high-quality watches. They don't try to appeal to everyone; instead, they focus on this exclusive group and offer products that match their specific desires for prestige and craftsmanship. TOMS Shoes : TOMS started by targeting socially conscious consumers who care about making a positive impact. Their "One for One" model, where they donate a pair of shoes for every pair sold, appeals to a small segment of customers who prioritize ethical purchasing.

31. A niche segment strategy is when a business focuses on a very specific group of customers with particular needs or preferences. Instead of trying to appeal to everyone, the business tailors its products, services, and marketing to a small, specialized audience. Key Points in Simple Terms: Focus on a Small Group : Instead of selling to the masses, you target a small, defined group with unique needs. Specialized Products/Services : You offer something that’s designed specifically for that group, which might not appeal to a larger audience.

32. Less Competition : Because you're serving a smaller group, there might be fewer competitors, allowing you to become a leader in that niche. Strong Customer Loyalty : When you meet the specific needs of a niche group, they are more likely to become loyal customers. Examples: Vegan Skincare Products : A company might create skincare products specifically for vegans. These products would be free from animal ingredients and not tested on animals. The niche segment here is vegans who care about cruelty-free beauty products. Mountain Climbing Equipment for Women : A brand might develop climbing gear specifically designed for women, considering differences in body shape, size, and strength. The niche market is female mountain climbers who need specialized equipment.

33. A sub-segment strategy is when a business takes an already defined market segment and further divides it into smaller, more specific groups to target. This allows the business to cater even more precisely to the needs of a certain portion of that segment. Narrowing Down : You start with a broad market segment and break it down into smaller, more specific groups (sub-segments). Tailored Offerings : You create products, services, or marketing campaigns specifically for these smaller groups within the broader segment. Even Less Competition : By focusing on a sub-segment, there’s even less competition, and you can better serve that particular group's needs. Enhanced Customer Satisfaction : Meeting the highly specific needs of a sub-segment can lead to very satisfied customers who are likely to be loyal.

34. Organic Baby Food for Allergic Infants : Imagine a company that already makes organic baby food. They could create a sub-segment strategy by offering a line of organic baby food specifically designed for infants with common food allergies (like gluten or dairy). The sub-segment here is parents of infants with food allergies within the broader market of organic baby food buyers. High-End Running Shoes for Marathon Runners with Flat Feet : A sportswear brand might already target runners, but with a sub-segment strategy, they could focus specifically on marathon runners who have flat feet. They’d design shoes with extra arch support and cushioning to meet this group's unique needs. Luxury Travel Packages for Retired Couples : A travel agency might already specialize in luxury travel, but they could create packages specifically for retired couples looking for leisurely, extended vacations. The sub-segment is retired couples within the broader luxury travel market.

35. Need for Targeting Efficient Resource Allocation: Focused Marketing : Instead of spreading resources thin by trying to reach everyone, targeting allows businesses to concentrate their marketing budget and efforts on the people most likely to buy their products or services. Cost-Effective : By focusing on a specific audience, businesses can reduce wasted marketing spend and get a higher return on investment (ROI). Better Customer Understanding: Personalized Messaging : When a business knows its target audience, it can create marketing messages that resonate with that audience’s specific needs, preferences, and pain points. Improved Product Development : Understanding the target market helps businesses design and improve products that better meet the needs of their customers.

36. Increased Competitiveness: Stand Out from the Competition : By targeting a specific group, a business can differentiate itself from competitors who might be trying to appeal to a broader audience. Niche Leadership : Effective targeting can help a company become a leader in a particular niche or market segment, giving it a competitive edge. Higher Conversion Rates: Relevant Offers : When marketing messages are tailored to a specific audience, they are more likely to result in sales because the offers are more relevant to the target customers. Stronger Customer Relationships : Targeted marketing often leads to stronger relationships with customers because they feel understood and valued by the brand.

37. Better Customer Retention: Loyalty and Satisfaction : When businesses target the right audience with the right products and messaging, customers are more likely to be satisfied and stay loyal to the brand. Repeat Business : A well-targeted strategy can lead to repeat purchases, as the business consistently meets the specific needs of its target audience.

38. Failure of target market Overly Narrow Targeting: Limited Market Size : If the target market is too small, there may not be enough customers to sustain the business. This can lead to insufficient sales and revenue. Missed Opportunities : By focusing too narrowly, a business might miss out on opportunities to attract other potential customers who could also be interested in the product. Poor Market Research: Incorrect Assumptions : If a business assumes they understand their target market without proper research, they might target the wrong group or misunderstand their needs, leading to ineffective marketing and product offerings. Changing Market Conditions : Markets can change rapidly, and if a business doesn’t stay updated, it might continue targeting a market that no longer exists or has evolved in a different direction.

39. Misalignment with Brand or Product: Mismatch with Offerings : If the product or service doesn’t truly meet the needs of the target market, the strategy will fail. For example, a luxury brand targeting budget-conscious consumers might struggle because its products are not aligned with the audience’s price expectations. Confusing Brand Identity : Targeting a market that doesn’t align with the brand’s core identity can dilute the brand and confuse consumers, leading to weak brand loyalty. Over-Saturation: Too Much Competition : If a target market is too competitive, with many businesses vying for the same customers, it can be difficult to stand out, leading to poor performance despite a well-defined target market. Price Wars : Over-saturation can lead to price wars, where businesses lower prices to attract customers, ultimately hurting profit margins.

40. Inadequate Marketing Efforts: Ineffective Communication : Even with a well-defined target market, if the marketing messages aren’t clear, engaging, or delivered through the right channels, they won’t resonate with the audience. Lack of Engagement : Failing to connect with the target market on an emotional or practical level can lead to poor engagement and weak sales. Ignoring Market Feedback: Failure to Adapt : If a business doesn’t listen to feedback from its target market, it may continue offering products or services that no longer meet the market's needs, leading to a decline in sales. Resistance to Change : Sticking rigidly to a target market that is shrinking or changing without adjusting strategies can lead to failure.

41. Economic or External Factors: Economic Downturns : External factors like a recession can change consumer behavior, making a previously viable target market less profitable or completely unviable. Technological Changes : New technologies can render a target market obsolete, especially if a business is slow to adapt to these changes.

42. Positioning Positioning is how you want your product, service, or brand to be perceived in the minds of your target audience compared to your competitors. It's about carving out a unique spot in the market and making sure customers see you in a specific way.

43. Need 1. Differentiation: Standing Out in the Crowd- Let’s say you own a coffee shop. There are likely many coffee shops in your area. To stand out, you might position your shop as the place that serves the most organic and ethically sourced coffee beans. This way, customers who care about health and sustainability will choose your shop over others. Consider the smartphone market. There are many brands like Samsung, Google, and Xiaomi . Apple positions the iPhone as a premium product with a focus on design, simplicity, and a smooth user experience. This positioning makes people see iPhones as not just another smartphone , but a luxury item worth paying more for.

44. Targeting the Right Customers: Attracting Your Ideal Audience If you sell high-end running shoes, you might position them as the best shoes for serious athletes. This way, people who are passionate about running and willing to invest in top-quality gear will be drawn to your shoes. A brand like Tesla positions its cars as electric, high-performance vehicles with advanced technology. This attracts tech-savvy, environmentally conscious consumers who are willing to pay more for innovative features and sustainable driving. Tesla’s positioning doesn’t just appeal to any car buyer; it specifically targets those who value cutting-edge technology and eco-friendliness.

45. 3. Creating a Strong Brand Image: Building a Clear Identity McDonald’s positions itself as a family-friendly fast-food restaurant known for quick service and affordable meals. This positioning makes people think of McDonald’s whenever they want a quick, reliable meal, especially for their family. Coca-Cola has positioned itself as a brand that represents happiness, sharing, and good times. Their marketing focuses on emotional connections, like sharing a Coke with friends or enjoying a Coke during celebrations. This consistent image helps people associate Coca-Cola with positive feelings, making them more likely to choose it over other drinks.

46. Building Customer Loyalty: Keeping Customers Coming Back If a skincare brand positions itself as using only natural and gentle ingredients, customers who prefer natural products will keep buying from them because they trust that the brand aligns with their values. Volvo positions its cars as the safest on the road. This strong focus on safety makes customers who prioritize safety, such as families with young children, choose Volvo repeatedly. Over time, this positioning builds customer loyalty because they trust Volvo to keep them safe.

47. Positioning process 1. Understand the Market and Customer Needs What to Do: Start by researching the market to understand the current landscape, including customer needs, preferences, and pain points. Analyze what your target audience values the most in products or services like yours. Example: If you’re launching a new fitness app, you need to understand who your potential users are (e.g., beginners, advanced athletes) and what they are looking for (e.g., guided workouts, diet plans). Understanding these needs will help you decide how to position your app.

48. 2. Analyze the Competition What to Do: Identify your main competitors and analyze their positioning strategies. Look at how they market their products, what unique selling propositions (USPs) they emphasize, and how they are perceived by the market. Example: Continuing with the fitness app example, you might find that one competitor positions their app as the best for beginners, offering easy-to-follow routines. Another might focus on advanced users with high-intensity workouts. Understanding this helps you find a gap in the market.

49. 3. Identify Your Unique Selling Proposition (USP) What to Do: Determine what makes your product or brand unique compared to others. This could be a feature, a benefit, a particular value, or even a brand personality that sets you apart. Example: If your fitness app offers real-time feedback on form through AI, this could be your USP. You position your app as the one that helps users improve their workout efficiency by ensuring they are exercising correctly.

50. Define Your Positioning Statement What to Do: Create a clear and concise positioning statement that captures the essence of how you want your product or brand to be perceived. This statement typically includes: The target audience The category of the product The USP or key benefit The reason why customers should believe your claim Example: “For fitness enthusiasts who want to maximize their workout efficiency, [Your App Name] is the AI-powered fitness app that provides real-time feedback on form, helping you achieve better results with every workout.”

51. Craft Your Marketing Message What to Do: Based on your positioning statement, develop marketing messages that clearly communicate your position to your target audience. These messages should be consistent across all marketing channels, including advertising, social media, and packaging. Example: Your marketing materials might include phrases like “Perfect Your Form with AI-Powered Feedback” or “Get the Most Out of Every Workout,” highlighting the key benefit that sets your app apart.

52. Implement the Positioning Strategy What to Do: Put your positioning into action by aligning all aspects of your marketing and business operations with your positioning strategy. This includes product design, pricing, distribution, customer service, and more. Example: Ensure that every touchpoint with your customers, from the app interface to customer support, reinforces your position as the app that helps users improve their workout efficiency. For instance, your app's user interface should be designed to make real-time feedback easy to understand and act on.

53. Monitor and Adjust What to Do: After implementing your positioning strategy, continuously monitor its effectiveness. Gather feedback from customers, track your brand’s perception in the market, and adjust your positioning if needed. Example: If you find that users are not responding as expected to the real-time feedback feature, you may need to tweak how you present this feature or emphasize a different benefit in your positioning.

54. Bases of Positioning Physical positioning refers to the actual, tangible characteristics of a product or service, such as its features, design, quality, or price. It's about how the product is physically placed in the market compared to competitors. Example : A car with better fuel efficiency and a lower price than its competitors is physically positioned as a more economical choice. A smartphone with a larger screen and more storage than others in its price range has a physical positioning advantage. Perceptual Positioning Perceptual positioning is about how a product or service is perceived in the minds of customers. It involves the emotions, attitudes, and associations that people connect with the product, even if those perceptions don't match the physical facts. Example : A luxury brand may be perceived as high-status and exclusive, even if it isn't necessarily better in terms of quality compared to others. An eco-friendly product might be seen as better for the environment, creating a positive image in consumers' minds, even if the physical differences are minimal.

55. Straight forward positioning statements Nike : "Nike provides innovative and high-performance sports gear for athletes of all levels." Tesla : "Tesla delivers advanced electric vehicles with superior performance for environmentally conscious drivers." Coca-Cola : "Coca-Cola offers a refreshing beverage with a unique, iconic taste that brings people together." Apple : "Apple creates premium, user-friendly technology products for creative professionals and tech enthusiasts."

56. Abstract ones Starbucks : "Starbucks creates moments of connection and warmth in a cup." IKEA : "IKEA transforms spaces into expressions of individuality and practicality." Spotify : " Spotify curates the soundtrack to your life’s journey." Airbnb : " Airbnb unlocks the world’s doors to meaningful experiences." These statements emphasize the emotional and conceptual impact of the brand, focusing on the deeper values and experiences they offer.

57. Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. Positioning involves establishing and controlling the desired image in the minds of targeted customers. It is necessary to give customers in the target market one or more good reasons to select your company rather than your rival. Some of the better known companies have positioned their products on the following bases: Price-Based Positioning Walmart : Positioned as the leader in offering "Everyday Low Prices" to provide the best value to budget-conscious shoppers. Quality-Based Positioning Rolex : Positioned as the epitome of luxury and precision in the watch industry, representing timeless quality and craftsmanship.

58. Differentiation Based on Innovation Apple : Positioned as a leader in innovation, offering cutting-edge technology with a focus on design and user experience. Benefit-Based Positioning Colgate : Positioned on the benefit of oral health, with products that focus on cavity protection, whitening, and gum care. Lifestyle-Based Positioning Nike : Positioned as a brand that celebrates and supports the active lifestyle, encouraging people to "Just Do It." Problem-Solution Positioning Head & Shoulders : Positioned as the go-to solution for dandruff, emphasizing its effectiveness in combating the problem. Positioning by Use or Application Tide : Positioned as the most effective detergent for removing tough stains, making it essential for families and households.

59. Cultural Symbol Positioning Coca-Cola : Positioned as an iconic brand that represents happiness, nostalgia, and moments of joy, deeply rooted in global culture. Positioning by Product Class BMW : Positioned as "The Ultimate Driving Machine," distinguishing itself in the luxury automobile market by focusing on driving performance. Positioning by Competitor Pepsi : Often positioned directly against Coca-Cola, focusing on being the choice for a younger, more modern audience in contrast to its competitor.

60. Dreams – Honda Motorcycle & Scooter India (HMSI), a subsidiary of world’s largest two-wheeler manufacturer, Japan’s Honda Motor Corporation, doesn’t sell speed or style. It dwells on the dreams and aspiration of everyday Indian and says your Honda two-wheeler will help you reach for your dreams First-mover – Compaq was the first brand to introduce a “portable” PC. Distribution – Dell focussed on selling computers directly to businesses only. Exclusivity - Toshiba focused only on laptop computer Health Personalisation

61. Case Study Positioning in India: The Case of Tata Nano Tata Nano , launched in 2008 by Tata Motors, was marketed as the "world's cheapest car," with an initial price of around INR 1 lakh (approximately $2,000). It was envisioned as an affordable alternative for millions of Indian families who relied on two-wheelers. However, the car struggled in the market and failed to achieve the anticipated success. Initial Positioning Challenges: "Cheap Car" Perception: The Nano was primarily positioned as the "world's cheapest car." While this highlighted affordability, it also created a negative perception, associating the car with low quality and status.Many potential buyers, especially in the aspirational Indian market, did not want to be seen driving the "cheapest car," which hurt its appeal among middle-class consumers. Safety and Quality Concerns: Early incidents of Nanos catching fire created a perception of the car being unsafe and of low quality. This further damaged its image, especially among first-time car buyers who prioritized safety.

62. Target Audience Misalignment: The Nano targeted two-wheeler users who wanted to upgrade to a car. However, these customers were highly price-sensitive and reluctant to make the jump from two-wheelers to a car, even at a low cost. Middle-class families, on the other hand, preferred slightly more expensive cars that offered more features, comfort, and status. Marketing and Distribution Issues: The Nano was initially sold in dedicated Nano dealerships, which limited its reach. Traditional car buyers who visited regular Tata Motors showrooms had fewer opportunities to see or consider the Nano.The car's marketing campaign focused too much on affordability, neglecting other attributes like innovation, fuel efficiency, or compactness, which could have been more appealing.

63. Rectification Attempts by Tata Motors: Repositioning Strategy: Tata Motors tried to reposition the Nano by emphasizing it as a "smart city car" rather than the "cheapest car." The focus shifted to its compact size, ease of parking, and fuel efficiency, which could attract urban dwellers. New marketing campaigns highlighted Nano's features, such as improved interiors, enhanced safety, and better mileage, aiming to appeal to a broader audience. Product Upgrades: Tata Motors introduced several upgrades to the Nano , such as power steering, new color options, improved interiors, and an openable rear hatch. The Nano Twist, Nano GenX , and other variants were attempts to make the car more appealing. Safety features were also enhanced in response to earlier concerns, although this came too late to change its negative image substantially. Wider Distribution Channels: Tata expanded the car's distribution channels to include regular Tata Motors dealerships, making the Nano more accessible to potential buyers across India.The company also experimented with new sales channels like e-commerce platforms and tie-ups with retail outlets.

64. Focus on Youth and First-Time Car Buyers: Tata Motors began targeting young, urban consumers and first-time car buyers who wanted a compact, affordable vehicle for city use. This repositioning aimed to move away from the "cheap car" image. Introduction of CNG and Automatic Variants: To cater to environmentally conscious consumers and those looking for more convenience, Tata introduced CNG (compressed natural gas) and automatic transmission variants of the Nano . Was the Repositioning Successful? Mixed Results: While the repositioning and product upgrades addressed some initial concerns, they were not sufficient to transform Nano's image or turn it into a market success. Perception Challenges Remained: Despite efforts to reposition, the initial perception of the Nano as a "cheap car" lingered, making it difficult to attract the target audience Tata Motors wanted. Sales Declined: Despite repositioning efforts, Nano's sales continued to decline, and production eventually stopped in 2018, with Tata Motors deciding to discontinue the model due to poor demand.

65. Conclusion: The attempt to reposition Tata Nano in India met with limited success. The initial positioning as the "world's cheapest car" created a negative perception that was hard to shake off. Although Tata Motors made efforts to improve the product, expand its reach, and change its image, these steps came too late to reverse the damage done by the initial strategy. The case of Tata Nano serves as a lesson on the importance of market positioning and understanding consumer perceptions in the automotive industry.

66. The End