Market Segmentation of a Product or Service, Selecting the Appropriate Target Market Segment

and its Positioning

What I need to Know In this module you will be able to encounter terminologies such as product,
service, consumer products, industrial products, etc. You are expected to understand the
classification of product and service. There are various activities prepared by the writer/s that will
help you understand the meaning and importance of a product; its levels and classifications that an
organization may use in order to achieve its vision, mission, goals and objectives. It is hope that
you will learn to value the knowledge and wisdom of this module.

Before the lesson proper, kindly write the following guide questions to be given to you in a piece of
paper. Answer them based on your stocked knowledge or even as a knowledgeable guess. After the
discussion, try to answer those questions again, and now apply the things learned from the lesson.

1. What is a product?
2. What are the levels of a product and service?
3. What are the classifications of a product and service?
4. As an ABM student, is it important that you know this topics? Why?
5. How can you be able to apply the things learned from the lessons in your everyday living

What’s New
 Product- anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want or need.
 Service- an activity, benefit, or satisfaction offered for sale that is essentially intangible
and does not result in the ownership of anything. Example: banking, hotel services,
airline travel, retail, wireless communication, and home-repair services.
Broadly defined, <products= also include services, events, persons, places, organizations,
ideas, or a mixture of these. Products are key element in the overall market offering. This offering
becomes the basis on which the company builds profitable customer relationships. A company’s market
offering often includes both tangible goods and services.

 Target Market- A target market is a group of potential customers that you identify to sell products
or services to. Each group can be divided into smaller segments. Segments are typically grouped by
age, location, income and lifestyle.
Identifying the target market is a key part of the decision-making process when a company
designs, packages, and advertises its product.

How Do I Define My Product's Target Market?

A new product must satisfy a need or solve a problem, or both. That need or problem is probably not
universal unless it reaches the level of indoor plumbing. More likely, it is needed by a subset of consumers,
such as environmentally-conscious vegetarians, or science nerds, or outdoor enthusiasts. It may appeal to a
teenager or a middle-aged professional, a bargain-hunter or a snob.
What Are the 4 Target Markets?
Marketing professionals divide consumers into four major segments:

Demographic: These are the main characteristics that define your target market. Everyone can be identified
as belonging to a specific age group, income level, gender, occupation, and education level.

Geographic: This segment is increasingly relevant in the era of globalization. Regional preferences need to be
taken into account.

Psychographic: This segment goes beyond the basics of demographics to consider lifestyle, attitudes,
interests, and values.

Behavioral: This is the one segment that relies on research into the decisions of a company's current
customers. New products may be introduced based on research into the proven appeal of past products

Product position- is a strategic exercise that defines where your product or service fits in the marketplace and
why it is better than alternative solutions. The goal is to distill who your audience is, what they need, and how
your product can uniquely help.

The outcome of product positioning is an internal document that informs external messaging — including how
you will communicate product benefits to customers. Positioning helps ground your product marketing efforts
in the real value you provide beyond features and functionality.

What elements should your product positioning consider?

Here are the key elements that define your product positioning:

Vision The overall direction for where your product is headed

Mission What you will do or build to make your vision a reality

Market category The market that you are in and your key customer segments

Tagline Catchphrase or slogan you use to describe your company or product

Customer challenges Major pain points for your customers

Company and product differentiators Unique, value-creating characteristics of your company or product

Brand essence The core attributes you want to be known for

A template can help you capture the key positioning elements described above for your product or service

What is it Levels of Product and Services

1. Core customer value- addresses the question <What is the buyer really buying?. When designing
products, marketers must first define the core, problem-solving benefits or services that consumers
seek.
2. 2. Actual product- refers to brand name, features, quality level, design and packaging.
3. Augmented product- refers to delivery and credit, product support, warranty and after-sale service.
Product and Service Classification

Product and services fall into two broad classes based on the types of consumer that use them: consumer
products and industrial products.

Consumer Products- products and services bought by final consumers for personal consumption.

Convenience products- a consumer product that the customer usually buys frequently, immediately, and
with minimal comparison and buying effort. Examples: laundry detergent, fabric conditioner, shampoo,
candy etc.

Shopping products- a consumer product that the customer usually compares on such attributes as
suitability, quality, price, and style. Example: clothing, furniture, appliances, hotel and airline services etc.

Specialty products- a consumer product with unique characteristics or brand identification for which a
significant group of buyers is willing to make a special purchase effort.

Unsought products- a consumer product that the customer either does not know or knows about but not
normally consider buying.

Industrial Products- a product bought by individuals and organization for further processing of for use in
conducting a business.

Materials and parts- include raw materials and manufactured materials and parts.

Capital items- are industrial products that aid in the buyer’s production or operations, including
installations and accessory equipment.

Supplies and services- include operating supplies and repair and maintenance items.

Individual Product and Service Decisions

1. Product attributes- includes product quality, product features, and product style and design.
2. Branding- a name, term, sign, symbol, design or a combination of these, that identifies the product or
services of one seller or group of sellers and differentiate them from those of competitors.
3. Packaging- the activities of designing and producing the container or wrapper for a product.
4. Labeling- range from simple tags attached to products to complex graphics that are part of the
packaging.
5. Product support services- customer service is another element of product strategy

Activity 2 Instruction: Below is a list of branded products. All you have to do is give the appropriate target
market for these products and the strategy that you are. going to do or design in order for the
products to have a position in the minds of the customer.
Products with brands Target Market to be serve Product Position Strategy
1.Coca-Cola (softdrink)
2. Whisper (sanitary napkin)
3. Clear for Men (shampoo)
4. Rexona for Men (deodorant)
5. Safeguard (soap)
What I can Do Activity 3 Instruction: You will going to name a product with brand name, that you
usually purchase or use. And then give the three levels of that product. ( 3 levels are core customer
val ue, actual product, augmented product)

Core customer value

Customers seeks provision by which they can feel satisfied and can give them what they basically need in
which they can used and cunsumed with in their everyday life, and with in the product Bioderm coolness
soap, the usuall reason behind purchasing or buying this is to gained benefits in terms with the formula
and the effects such it can hydrate the skin, the cooling effect after used, and the price that alligns with
the daily budget that is mostly one the concerns among other terms considered in buying.

Actual product

Bioderm coolness soap, manufactured by the international pharmaceutical inc. That has the formula of
mint that gives the cooling and hydrating effect after used in the skin and the scent that gives the realistic
ccoling breeze effect by which it provides the satisfaction that were mostly seeking for about in terms with
the quality and feetures to considered. This soap has the light blue plastic and paper type pachaging that
alligns with its feature coolness formula . that also gives the idea by which engaging with our eco system
can bring all along with the pachaging.

Augmented product

Bioderm coolness soap can be purchased in any different supermarkets around the world in which, it has
the provision of credit such when you purchase it with abnormal or problem abide in it that must need to
be considered ,cosn=umer can return it as long as the receipt is still in them and the responsive
management of the market place will be considered and will responsible to change it to a new one.

3. features, quality level, design and packaging.

that they can gained from purchasing it, such the packaging that they can reuse, the price that alligns with
their daily and monthly budget and the formula by which they need probably in terms with their health,
skin, and necessary things such, food, appliances ,home decorations and clothes.