SEGMENTATION, TARGETING, POSITIONING

Segmentation, targeting and positioning is a three stage process. Segmentation describes what kinds of customers exist, targeting describe target market which is best to serve and  positioning which describe segmentation by categorizing the products or services for that segment.

Segmentation is “the process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.”

Segmentation try to find out what kinds of different consumers with different needs exist.

Segmentation depend on?

–             Gender

–             Age

–             Social class

–             Personal Disposable Income

–             Family life cycle

–             Employment status

–             Marital status / living arrangements and many more.  

The example for example can be yellow soap.  In the past it was just this one yellow soap.

Now we have got many different kinds of soaps, with different colours, shapes, smells etc.

Segmenting consumer markets

-              Geographic

-              Demographic

-              Psychographic

-              Behavioural

There are different kinds of variable which are used for segmentation:

-          Demographic – to this belong: gender, income, education, location, and family size, ethnic.  For example Campbell’s soup has found that Western U.S consumers prefer spicier soup

-          Some consumers want to be the same as the others and other want to be different.

-          Behaviour – some customers are “brand loyal”- customers sty with the brand they are stick to. Some consumers are “heavy” users while other are “light” users.

-          One can also segment on benefits sought, essentially bypassing demographic explanatory variables. Some consumers use toothpaste primarily to promote oral health, while another segment is more interested in breathe freshening.

CRITERIA FOR SEGEMNTATION

Effective - truly different needs from other segments?

Identifiable - how can you find those people?

Profitable - is the segment big enough to offer real profits?

Accessible - can you reach this group easily?

Actionable - can it be done?

TARGETING

Targeting evaluate the attractiveness of each segment. Defending a target market requires market segmentation, “the process of pulling apart the entire market as a whole and separating it into manageable, disparate units based on demographics”. To the target marketing belongs to break a market into segments.

Target marketing makes the promotion, pricing and distribution of the products or services. Target marketing provides a focus to all marketing activities.   Market targeting means to choose one’s target market.

PROCESS OF CHOOSING TARGET MARKET:

-          Make sure that target market is not synonymous to segmentation

-           Segmentation is just the first step of the target market

-          Target market follows different basses of segmentation

-          Looking at each segment as a distinct marketing opportunity.

-          Evaluating the worth of each segment (sales/profit potential).

-          Estimating whether the segment is:

Ø  Distinguishable.

Ø  Measurable

Ø  Sizable.

Ø  Accessible.

Ø  Growing.

Ø  Profitable

Ø  Compatible with the firm’s resources.

-     

-          Checking out if the firm has the differential advantage / distinctive capability for serving the selected segments.

-          At the end choose those segments which the most appropriate for the company.

DECISIONS INVOLVED IN TARGETING STRATEGY INCLUDE

which segments to targeting.

how many products to offer.

which products to offer in which segments.

POSISTIONING

Positioning “has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization.”

Positioning involves on affecting the target. The example can be Apple Computer has chosen itself as user-friendly computers.  Thus, Apple advertising itself as a computer for “non-gigs”.

Positioning of a product is a sum of the attributes which are normally described by the customers.  Describe its standing, target market, quality, strengths, weaknesses, prices and any other values the product represents.

There are three types of positioning concept:

-          Functional position

Ø  Solve problems.

Ø  Provide benefits to customers.

Ø  Get favourable perception by investors (stock profile) and lenders.

-          Symbolic positions

Ø  Self-image enhancement.

Ø  Ego identification.

Ø  Belongingness and social meaningfulness.

Ø  Affective fulfilment.

-          Experiential positions

Ø  Provide sensory stimulation.

Ø  Provide cognitive stimulation

Approaches of positioning- the main approaches to positioning are:

-          Customer benefit approach- involves putting the brand behind the competitors. It can be a single product which can solve many problems e.g.  Procter & Gamble’s Head & shoulder shampoo functions as anti-dandruff and anti-hair fall shampoo.

-          The price-quality approach- some brands have higher price to cover the cost of the product and to give the customer message that this product is on a high level and quality example can be RODO watch  £1,323

-          The use or application approach.- For example: MUSIC EDITION mobile phone. Samsung scg-r470

-          The product user approach – in here the brand identify the target market for which product will be position.

-          The product class approach.

-          The cultural symbol approach. - It is based on showing the cultural symbol which helps stand out from other competitors. The example of this can be the MALBORO brand which shows the cowboy image 

-          The competitor approach.

To effectively understand repositioning, it is important to understand how one’s brand and those of competitors are perceived.  This let identify how products are perceived by the consumers.  After that the company can attempt to move the brand in more desirable directions by promoting other, certain points.   

The example can be the positioning map below: 

Segmentation, targeting and positioning are closely interrelated with each other.

REFERENCES:

Callin Gilliam(2010) Marketing Segmentation, Targeting and Posistioning ,p339

Safar M(2009) Strategic Marketing India