CHAPTER 3- USP, SERVICE

SEGMENTATION, TARGETING
& POSITIONING
LEARNING OBJECTIVES:

At the end of this chapter, the learners should be

able to:
•Identify the basics of proposition
•Explain the importance of value proposition
•List the requisites for effective service segmentation
•Discuss the bases for service segmentation
•Explain the market targeting strategies
•Discuss the positioning strategy and state the
positioning approaches
 Proposition

• Proposition is the statement emphasized

to the consumer which is unique from that
of the competitors and presented as a
need to be fulfilled to create a positive
image in the market.
 What is USP?

• It sets a business apart from its

competition.
• It is the product or service that a company
offers, which is particular from that offered
by other companies.
 What is USP?

Having a USP dramatically improves the positioning

and marketability of services by accomplishing three
things for the company:
1.Unique- it clearly sets a company apart from its
competition, providing it with a more logical position.
2.Selling- It improves the marketability of the
service.
3.Proposition- it suggests a proposal or offer for
acceptance.
 What is USP?

The ultimate goal of the USP and

marketing is to have people recognize
the company and the services it
provides, and then follow it up by either
further inquiries or purchase or both.
How to find one’s own
USP?
The head or person in charge must
analyze what sets the product or
service apart from its competitors.
How to find one’s own
USP?
1. Ideas about the product or service should be
brainstormed.
a. What does it do?
b. What does it offer?
c. How is it better than that of other competitors?

2. By understanding what the other competitors

offer, the company can modify its products or
services accordingly to create a better offering.
How to find one’s own
USP?
3. What benefits do the products or services offer?
Are they cheaper faster and more unique? Do they
save time or money? Do they relieve pain or
inconvenience or even provide pleasure? These
are the questions that should be taken into
consideration by planners and strategists.
How to find one’s own
USP?
4. The following are examples of promotions which
can give an edge to USP:
a. free shipping
b. great customer service
c. a contest/ promotion
d. free gifts
e. reminders
f. competitive pricing
 Service Segmentation,
Targeting and Positioning
• Modern companies understand the fact
that they cannot appeal to all buyers in the
market or at least not to all buyers in the
same way.
• There are numerous buyers in the market
and they are too widely scattered.
• There are three steps in designing a
customer driven strategy, namely,
segmentation, targeting and positioning.
 Segmentation

• Service segmentation is the process of

dividing the total market into relatively
distinct homogeneous sub-groups of
consumers with similar needs or
characteristics that lead them to respond
in similar ways to a particular service
marketing programs.
 Segmentation

• A segment is a portion of a larger market

in which the individuals, groups, or
organizations share one or more
characteristics that cause them to have
relatively similar product needs.
 Requirements for
Effective Segmentation
• A service marketer must determine
whether the market is heterogeneous. If
the consumers’ product needs are
homogeneous, then it is senseless to
segment the market.
 Requirements for
Effective Segmentation
• There must be some logical basis to
identify and divide the population in
relatively distinct homogeneous groups,
having common needs or characteristics
and who will respond to a service
marketing program.
 Requirements for
Effective Segmentation
• The total market should be divided in such
a manner that comparison of estimated
sales potential, costs and profits of each
segment can be estimated.
Bases for Segmentation

• Geographic Segmentation
• Demographic Segmentation
• Psychographic Segmentation
• Behaviouristic Segmentation
Geographic Segmentation

• These geographic units may be nations,

states, regions, areas of certain climatic
conditions, urban and rural divide.
• The assumption is that consumers in a
particular geographic area have identical
preferences and consumption behaviour.
Demographic Segmentation

• Demographic characteristics are

commonly used to segment the market.
• Factors such as age, sex, education,
income, marital status, family size and
social class etc. are used singly, or in a
combination, to segment a market.
Psychographic Segmentation

• When the segmentation is based on

personality or lifestyle characteristics, it is
called psychographic segmentation.
• There are people who are ambitious,
confident, aggressive, impulsive, modern,
conservative, gregarious, loners, extrovert,
or introvert etc.
Psychographic Segmentation

• Lifestyle
It is an indicator of how people live and
spend their time and money. What people
do in their spare time is often a good
indicator of their lifestyle.
Behaviouristic Segmentation

• Dividing the market on the basis of such

variables as use occasion, benefits
sought, user status, usage rate, loyalty
status, buyer readiness stage and attitude
is termed as behaviouristic segmentation.
Behaviouristic Segmentation

• User status, such as non-users, potential

users, or first time users can be used to
segment the market.
• Markets can also be segmented into light,
medium or heavy users of a product.
• Brand loyalty of varying degrees can be
present among different groups of
consumers and may become the basis to
segment the market.
Behaviouristic Segmentation

• Markets may also be divided by

considering level of product awareness
such as unaware of the product, aware,
interested, desirous or contemplating to
purchase the product.
Targeting Marketing
Segments
• Instead of aiming a single product and
marketing programme at the mass market,
most companies identify relatively
homogeneous segments and accordingly
develop suitable products and marketing
programs matching the wants and preferences
of each segment. It should, however, be
realized that all segments do not represent
equally attractive opportunities for a company.
Targeting Marketing
Segments
• Before making the final decision of
choosing the market segment, it is
necessary to examine that the segment is
at least strongly positive on one of the two
dimensions of market attractiveness and
business strength and is at least
moderately positive on the other.
Targeting Marketing
Segments
• There are three basic targeting strategies:
1.Undifferentiated Mass Marketing.
2.Differentiated Multiple Segment Marketing.
3.Single Segment Specialization or Niche
Marketing
Undifferentiated Mass
Marketing
• This strategy involves ignoring any
differences among consumers and offer
one product or service to the entire
market. This strategy of mass marketing
focuses on what is common in the needs
of consumers rather than what is different.
Undifferentiated Mass
Marketing
• Example: For more than 90 years, Coca-
Cola offered only one product version to
the whole market and hoped that it would
appeal to everyone.
Differentiated Multiple
Segment Marketing
• The marketer decides to enter several
market segments and develops separate
offers for each.

• Companies producing toiletries are

offering different versions of toilet soaps
for dry skin, oily skin and normal skin.
 Niche Marketing

• Many companies succeed by producing a

specialized product aimed at a very
focused market or a niche.
 Positioning

• Positioning is the perception of a brand or

product it brings about in the mind of a
target consumer and reflects the essence
of that brand or product in terms of its
functional and nonfunctional benefits as
judged by the consumer.
 Why Position?

• Positioning should be relevant. If it is not

relevant, the audience won’t care.
• Positioning should be unique. If it is not
unique, your brand will be seen as
undifferentiated (a commodity).
• Positioning should be credible. If your
positioning isn’t credible, no one will believe
what you say.
• Positioning should be clear. If it is not clear,
your marketing efforts will be unfocused.
 Positioning Maps

• Products or services are ‘mapped’

together on a ‘positioning map’. This
allows them to be compared and
contrasted in relation to each other.
Sources of Positioning
for Service
• Position for price
– Cebu Pacific’s Piso Fare for budget travelers
– Puregold’s Aling Puring that caters to sari-sari
store owners.
Sources of Positioning
for Service
• Position for Speed
– Mr. Quickie is probably the country’s most
famous shoe and bag repair shop.
Sources of Positioning
for Service
• Position for Convenience
– Xend, an express e-commerce shipping
company, provides pick-ups nationwide.
Sources of Positioning
for Service
• Position for expertise and specialization
– When discussing service expertise, doctors
are probably the most generic examples.
Sources of Positioning
for Service
• Position for location and origin
– Thailand is a country that has always been
associated with massages. Thus, the Cebu-
based food and body massage chaing, Nuat
Thai, could not have chosen a better name to
present a sense of authenticity.
Sources of Positioning
for Service
• Position for scope and scale
– One of the brands that comes to mind when
planning to send money to Palawan would
probably be Palawan Express.
Developing a brand
positioning statement
involves four steps:
• Describe your customers
• Define yourself in terms of your
competition
• Explain your greatest benefit
• Put it together into your brand positioning
statement
• For (insert customer base), (insert company
name) offers (insert product and key benefit)
to provide (insert competitive advantage).
Example: For economical fashionistas,
Minki’s Fashion Shop offers affordable,
trendy women’s apparel to provide ultimate
comfort.
• Example: For high-tech gadget lovers,
Susie’s Store offers the newest electronic
products to provide the latest offering to
customers.
Your brand positioning
statement may sound familiar:

• It will be similar to your mission or

purpose statement, but takes into
account your customers and competitors.
• It will be similar to your unique selling
proposition (USP), but takes into account
your target audience.