Principles of Marketing Q3 Module 9

By: Group 1
At the end of the module, you are
expected to:
1. Select the appropriate target market and its
positioning. (ABM-PM11-le-i-15).
a. Define what is target market and positioning.
b. Describe the criteria in selecting the target
markets
 Selecting Target Market
• For a business, the choice of the target
market is a very important decision as it
takes considerable effort and determination
to execute a suitable and targeted marketing
mix. The identification of the target market is
a crucial part of marketing plan and requires
considerable company-wide research,
debate and evaluation.
 Positioning
• Positioning is a marketing term that
defines where your business, product
or services stands in relation to
competition in the market place in the
mind of the customer.
 Positioning
• Brand positioning is closely connected to the
emphasis on the consumer segment. It involves
the development of a special, consistent and
accepted consumer understanding of the supply
and image of a brand.
• A product or service can be placed on the basis
of an attitude or advantage, usage or application,
customer, category, price or quality level
 Positioning
• Positioning also markets a commodity
at particular prices for particular
consumer segments and product
needs. In certain cases, the same
product can be placed.
 Slide Title

In the previous module, you learned the conceptual

information about market segmentation wherein it covers the
different types – Market According to Types of Institution
(Consumer Markets, Organizational Markets and International
Markets. It also tackles the process of segmenting markets,
bases for market segmentation and others.
 Slide Title

This module covers the process of selecting appropriate

target markets, the arts and science of positioning – types of
positioning strategies and positioning map. This will help learners
to understand how to effectively communicate a strong, clear and
concise message for a particular product. It will focus on particular
attention to the challenge of convincing the market about what
makes it different from its various competitors.
What Is Target Market
• Target market represents a group of
individuals who have similar needs,
perceptions and interests. They show
inclination towards similar brands and
respond equally to market fluctuations.
What Is Target Market
• Individuals who think on the same
lines and have similar preferences from
the target audience. Target market
includes individuals who have almost
similar expectations from the
organizations or marketers
The diagram below illustrates how target
market is positioned
SEGMENT CRITERIAS
 SIZE
• It must be broad enough to be worth serving
when selecting a business segment.
However, size does not apply to the number
of prospective buyers, but to the amount of
sales that can be produced. In evaluating the
size of the market, the following questions
should be considered. How big is the
market? Will it be worth pursuing?
 EXPECTED GROWTH
• There are markets that are not
lucrative at the moment, but some of
these are possibly expected to develop
in the future. Even if the market is
small, it could be profitable if there is
evidence that it is going to expand.
 COMPETITIVE POSITION
• The existence of competition in the
considered segment decreases the
probability of the business making profits
successfully. It is Discover important to
thoroughly analyze the intensity of the
competition. Low competition equals a
market that is desirable.
 COST OF REACHING THE SEGMENT
• The business must quickly hit a
consumer segment that is identified. If
marketing campaigns are too costly to
accomplish this, revenue may be
jeopardized.
 COMPATABILITY WITH THE FIRM’S
OBJECTIVES AND RESOURCES
• The segment must not be chosen if the
company does not have adequate
capital to serve a prospective segment.
How compatible is the demand with
the company’s objectives?
 What Is Market Positioning
• Market Positioning refers to the ability to
influence consumer perception regarding
a brand or product relative to
competitors. The objective of market
positioning is to establish the image or
identity of a brand or product so that
consumers perceive it in a certain way.
What Is Market Positioning
• Market Positioning is a critically
important part of marketing strategy
since it determines to a large extent
what customers perceive is being
offered to them.
2 KEY DECISIONS
 Decision 1: Choose which customers to
serve
• This involves (a) Market segmentation
(analyzing the different parts of a
market); (b) Targeting (deciding with
market segments to enter)
 Decision 2: Choose how to serve
those customers.
• This also involves two important parts
of marketing strategy: (a) Product
differentiation (what makes it
difference from the competition) ; (b)
Market positioning (how customers
perceive the product).
 Having chosen which segments to target – a
business needs to decide how to compete in those
segments. Marketing people call this choice the value
proposition. What position will be taken?
It is important to remember that the market
position (or value proposition) is defined by
customers – the place a product occupies in customer
minds relative to competing products
Positioning The Product
• Product positioning is a marketing
strategy designed to better display
goods to identify target markets in the
best possible way. Symbols and
manipulation of messages, including
screens and packaging, are involved.
 Positioning The Product
• The location of a product was referred to
as the Special Selling Preposition or USP in
the early days of publicity. It’s basically the
answer to the question, ”What makes your
product different, then? In fact, advertisers
were the individuals empowered to
determine the USPs for the goods they
were promoting.
 Positioning The Product
• In their book entitled “Positioning” in 1970,
marketers Al Ries and Jack Trout coined the
word “positioning”. They argued that there was
a need for goods to concentrate on one
message and one message alone. For instance,
only toothpaste and nothing more should be
associated with Colgate, while only germ
fighting soap and nothing else should be
associated with Safeguard.
 Example of Product Position:
• Crispy fried chicken has always been
associated with Max’s Restaurant. It is not
the only fried chicken restaurant (KFC is
the leading fried chicken chain), but it
holds a distinct message, especially among
Filipino tradition’s senior market segments,
family bonding, and a unique form of fried
chicken experience.
 Example of Product Position:
• Product’s position should not be confused with
its slogan or catchphrase. Catchphrases, such as
“Your’e in good hands” for Metrobank, or
“Hahanap-hanapin mo” for Mang Inasal, “Bida
ang Saya” for Jollibee, “Gamot Ay Laging Bago”
for Mercury Drugstore, are meant to make
people feel good about the product. But these
are not necessarily the product position
statements
 Points Of Difference
• Points of Difference or PODs refer to
the attributes or benefits that the
market associates primarily with a
particular brand, to the point that the
market believes that no other brands
offer these attributes or benefits to the
same degree.
 Points Of Parity
• Points of Parity or POPs, are market
expectations about what products in a
particular products category should be
or should have.
Points Of Parity
2 BROAD CATEGORIES OF
MARKET POSITION
 Cost Leadership
• Cost leadership emphasizes
saving money and appeals to
those who are on a budget.
 Differentiation
• Product differentiation focuses
on providing quality.
 Cost Leader Strategy
• A company using a cost leader strategy attempts
to position itself in the minds of the consumers as
a company that provides products the consumers
want at a price that is lower than competing
products available in the marketplace. Consumers
expect basic products with no bells and whistles
from a company using a cost leader strategy.
Instead, consumers just expect the products to
meet their needs and nothing more or less.
 Differentiation Business Strategy
• A company using a differentiation business
strategy attempts to position itself in the
minds of the consumers as a company that
provides unique products that consumers
will pay more for because they cannot find
comparable products or product features
anywhere else in the marketplace.
 Differentiation Business Strategy
• Consumers expect more from a differentiated
product and therefore are willing to pay a
premium for a differentiated product. This is
true as long as the unique features of the
product add some value to the product that
makes it more valuable to the consumer,
whether a functional feature or an aspect of
image or prestige that enhances the
perception of the product.
 Perceptual Map In Market Position
• The word ‘perceptual’ comes from the word
‘perception’, which refers to the consumers’
understanding of the competing products
and their associated attributes.
 Perceptual Map In Market Position
• A perceptual map is of the visual technique
designed to show how the average target
market consumer understands the
positioning of the competing products in the
marketplace. It is a tool that attempts to
map the consumer’s perceptions and
understandings in a diagram
 Perceptual Map In Market Position
• A perceptual map represents customer
perceptions and preferences by means of a
visual display (Ferrel & Hartline, 2008).
Perceptual Map In Market Position
• Perceptual maps measure the way products
are positioned in the minds of the
consumers and show these perceptions on a
graph whose axes are formed by product
attributes (Kardes, Cronley, & Cline 2011)
 Perceptual Map In Market Position
• Some possible dimensions for the axes of a
perceptual map includes:
Perceptual Map In Market Position
 Why use a perceptual map?
• To understand how brand is perceived in the
marketplace.
• To track how the perception of our brand is
evolving over time, with new products and
campaigns.
• To track the perception of competitor
products and measure the impact of their
marketing strategies.
 Why use a perceptual map?
• To identify positioning preferences for
different market segments.
• To identify possible gaps and opportunities
for new products.
• To identify possible opportunities for
repositioning our brand.