MARKET SEGMENTATION,

TARGETING AND POSITIONING FOR

COMPETITIVE ADVANTAGE
Class 2
Overview
Market Segmentation

Market Targeting

Positioning for Competitive Advantage

Marketing Mix : Concepts of 4 Ps and 4 Cs

Designing a Customer Driven Marketing Strategy
What is your VALs Group?
VALS Framework
http://www.strategicbusinessinsights.com
Differentiation
Beyond deciding which segments of the market it will target,
the company must decide on a value proposition on how
will it create differentiated value for targeted segments and
what position it want to occupy in those segments.

A product position is the way the product is defined by

consumer on important attributes the place the product
occupies in consumers minds relative to competing
products.

Products are created in the factory, but brands are created

in the mind
Some Positioning
Tide is positioned as a powerful, all-purpose family
detergent.

Ariel is positioned as the gentle detergent for fine

washable and baby clothes.

Tata Indica and Maruti Suzuki 800 are positioned as

economy. Mercedes and Cadillac on luxury, Porche and
BMW on performance. Volvo positioned powerfully on
safety, Toyota on fuel-efficient, hybrid Prius as a high-tech
solution to the energy shortage.
Positioning Map
In planning their differentiation and positioning strategy,
often prepare perceptual positioning maps, which show
consumer perception of their brands versus competing
products on important buying dimensions.
 Differentiation and Positioning

Positioning
maps show
consumer
perceptions of
their brands
versus
competing
products on
important
buying
dimensions
Positioning
Positioning
Positioning
 Fox News and CNN are leaders in the news media category; The New York Times
maintains leadership status but The Wall Street Journal and more general news brands
are stronger
Household Income $100,000+ FY09
100 Fox News
CNN

Time
The Wall Street Journal
(Energized Differentiation/ Relevance) USA Today
MSNBC
Bloomberg News Newsweek
CNBC
Brand STRENGTH

The New York Times

50 FY 2009
Financial Times Business Week
Reuters
Newspaper Average
The Washington Post

IHT New York Post Newspaper Average

Los Angeles Times
includes: The Wall
Street Journal,
Boston Globe Chicago Tribune USA Today, Boston
Globe, The Washington
0
Post, Chicago Tribune,
0 50 100 Los Angeles Times,
Brand STATURE International Herald
(Esteem/Knowledge) Tribune
Source: BAV USA HHI $100k+ FY09
 Most news media brands remain either undeveloped or eroded but Newsweek and
Bloomberg news made notable improvements on Brand Strength

Household Income $100,000+ FY08, FY09

100 Fox News
CNN

Time
The Wall Street Journal
(Energized Differentiation/ Relevance) USA Today
MSNBC
Bloomberg News Newsweek
CNBC
Brand STRENGTH

The New York Times

50 FY 2008 FY 2009
Financial Times Business Week
Reuters

Newspaper Average
The Washington Post

IHT New York Post Newspaper Average

Los Angeles Times
includes: The Wall
Street Journal,
Chicago Tribune USA Today, Boston
Boston Globe* Globe, The Washington
0
Post, Chicago Tribune,
0 50 100 Los Angeles Times,
Brand STATURE International Herald
(Esteem/Knowledge) Tribune
Source: BAV USA HHI $100k+ FY08, FY09
Some Scenarios
Scenario 1 - You are applying for Assistant Branch
Manager job in Standard Chartered Bank Nepal Limited.
The HR Manager and CEO is sitting in front of you. The
CEO asked you, Tell Me Something About Yourself?
Scenario 2
Scenario 2 You are a good cricketer (specialist
batsman), you are being selected for interview for
National Nepali Cricket Team? There is a foreign coach,
lets say Nepal hired Gary Kirsten as our national coach.
Gary is taking interview to group of 50 to select 20 for the
team. So you are in front of Gary, and he asked you, there
are so many talented people out there, why should I
select you?
Scenario 3
Scenario 3 Lets assume after few years, you graduate,
you plan to work, you want to do MBA from KUSOM, you
gave exam and wrote essay, now you are in interview
the dean asked, tell me something about yourself and
why we should chose you?
Choosing a Differentiation and Positioning Strategy
The differentiation and positioning tasks consists of three
steps

Identifying a set of differentiating competitive advantage upon

which to build a position

Choosing the right competitive advantage

Selecting the overall positioning strategy

The company must then effectively communicate and deliver the

chosen position in the market.
Identifying Possible Value Difference and Competitive
Advantage
To the extent that a company can differentiate and
position itself as providing superior customer value, it
gains competitive advantage.

E.g. LUMS Lahore University of Management Sciences.

Identifying Possible Value Difference and Competitive
Advantage
Product Differentiation differentiated on features, performance or style or design
Bose position its speakers on their striking design and sound characteristics.

Service Differentiation Maruti Suzuki differentiated itself from the rest of the
automobile manufacturer in India based on number of authorized service stations
and dealers.

Channel Differentiation Amazon.com and GEICO set themselves apart with

their smooth-functioning direct channels.

People Differentiation hiring and training better people, Singapore airlines

enjoys an excellent reputation, largely because of the grace of its flight
attendents.

Image Differentiation McDonalds golden arches, Tatas T, Nikes swoosh,

Googles colorful logo
Differentiation and Positioning
Choosing the right competitive advantage requires
selecting how many and which differences to promote.

Unique selling proposition is often preferred.

E.g. WalMart low price, Burger King personal choice, have it your
way

Promoting multiple differences is possible.

Not all brand differences make a good differentiator, every difference
has the potential to create company costs as well as custom benefits.
 6 - 22

Differentiation and Positioning

Worthwhile differences that could be promoted
are:
Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable

Westin Stamford Hotel in Singapore worlds tallest hotel, not

important to tourist; Polaroids Polarvision distinct and preemptive but
inferior to another way of capturing moment
 Differentiation and Positioning
Selecting an Overall Positioning Strategy

Value
proposition is
the full mix of
benefits upon
which a brand is
positioned
Differentiation and Positioning
Overall or full positioning of the brand is called the brands value
proposition.

Potential value propositions include:

More for more: More benefits for higher price. (Apple iPhone, Mont Blanc writing
instruments, Mercedes)

More for same: More benefits for the same price. (Lexus against BMW and Mercedes)

More for less: More benefits for a lower price. (Tata Indica more car per car more
space and better fuel economy at a lower price)

Same for less: Same benefits for a lower price. (Wal-Mart, Big Bazzer, AMD makes
less expensive version of Intels market leading microchips)

Less for much less: Fewer benefits for much lower price. (Maruti 800, Southwest)
Differentiation and Positioning
Developing a positioning statement:

Format: To (target segment and need)

our (brand) is (a concept) that (point of difference).

Example: To busy mobile professionals who need to always be in

the loop, BlackBerry is a wireless connectivity solution that gives
you an easier, more reliable way to stay connected to data, people,
and resources while on the go.

Positioning first states the product membership in a category

(wireless connectivity solutions) and then its point of difference
from other members of the category (easier, more reliable
connection to data, people and resources)
POP (point of parity)
POD (point of differentiation)
Communicating and Delivering the Chosen Position
Positioning the company calls for concrete action, not just
talk.

Company must take strong steps to deliver and

communicate the desired position to target consumers.
The marketing mix efforts must deliver the positioning strategy.
Product, Price, Place and Promotion

Firm must also monitor and adapt the position over time
to match changes in consumer needs and competitors
strategies.
Rest Stop: Reviewing the Concepts
1. Define the major steps in designing a customer-driven
marketing strategy: market segmentation, targeting,
differentiation, and positioning.

2. List and discuss the major bases for segmenting

consumer and business markets.

3. Explain how firms identify attractive market segments

and choose a market-targeting strategy.

4. Discuss how companies differentiate and position their

products for maximum competitive advantage.
Thank you!