Market Segmentation, Targeting and Positioning
Segmentation Methods
Step 1: Establish strategy or objective
The Segmentation, Targeting and Positioning Process
Step 5 - Positioning: Identify and develop a positioning strategy
Step 2: Use segmentation methods
Overall strategy and objective:
Step 1 - Segmentation: Establish strategy or Objective
Step 2 - Segmentation: Use segmentation methods
Step 3 - Targeting: Evaluate segment attractiveness
Step 4 - Targeting: Select the Target Market
Taken from the current objective
Consistent with SWOT analysis
Geographic segmentation
Demographic segmentation
Psycho-graphic segmentation
Benefits segmentation
Behavioral segmentation
Market can be grouped by:
Country
Region
Areas within region
State, cities, neighbourhoods
It is based on where the market lives.
Market can be grouped by:
Age
Gender
Income
Education
This is the most common segmentation
It is also the easiest to reach and identify
Market can be grouped by:
Personality
Social Class
Lifestyle
Attitudes and Opinions
This allows people to describe themselves using characteristics
This would then affect their behavior as there are underlying psychological reasons for their choices
This segment is based on the benefits that consumers receive when they buy a good or service
The market is divided into how the consumers needs and wants are best satisfied
The market is divided into groups based on how they use the product or service
Occasion segmentation
Loyalty Segmentation
This segmentation is based on when a product or service is purchased
Clothes
Snacks
Food
The market is loyal to a product and does not use a substitude
Airlines
Petrol stations
Restaurants
Hotels
Phone brand
Evaluate Segment Attractiveness
Select a Target Market
Step 3: Evaluate segment attractiveness
Identifiable
Substantial
Reachable
Responsive
Profitable
Businesses must identify who is in their market
Business must ensure that segments are different from one another
Businesses will analyze and see if each segment needs a unique marketing mix
Finding a market does not mean it is a good market
If the market is too small or has little buying power, it will not generate profits
Or if the market is too big, it might need a store
The market must know that the product/service exists
The market must understand what the product/service can do
The market must know how they can buy the product/service
The market must react positively to the firm's offerings
If the business cannot provide product/service to the market, the market should not be targeted.
Businesses will have to check on Market growth to see if it is profitable
Market competitiveness to see the numbers of competitors or barriers to entry
Market access for distribution channels, brand familiarity
Step 4: Select a Target Market
Targeting Strategies
Differentiated
Concentrated
Micro-marketing / One-to-one customization
Undifferentiated/Mass Marketing
It is based on Price and Availability of product
Anyone can be a target customer as the customer needs is similar across all groups
The marketing mix is designed for all customers
This strategy targets different segments and offers different things to each
This helps businesses get a bigger share of the market and increase products that are marketed
It helps to diversify the business
E.g: different types of cereal from one company (kids cereal and healthy cereals)
The business focuses all their resources on providing a product or service to fit that market's needs
This strategy is to make a product/service to suit an individual customer wants or needs
The business only manufactures a product when there is an order from the customer
E.g Nike customization shoes
Positioning Strategy
Undifferentiated products are identical and these can be substituted by any other supplier (e.g salt, flour, rice)
Step 5: Identify and Develop Positioning Strategy
Market Positioning: Defining a marketing mix variables so the target customers have a clear understanding of what the product does
Value Proposition: Communicate the benefits received from the product/service
The firm's value proposition is what the firm can provide that competitors cannot
Positioning Methods
Value
Salient Attributes
Symbol
Competition
Perceptual Mapping
This strategy displays (in 2 or more) dimensions, the position of product or brands in the consumer's mind
Steps to positioning using perceptual mapping
Step 1: Determine consumer's perception and evaluation in relation to competitors
Step 2: Identify the market's ideal points and size
Step 3: Identify competitor's positions
Step 4: Determine consumer preferences
Step 5: Select the position
Step 6: Monitor the positioning strategy
The business determines their brand positioning by asking a series of questions about the business and products.
On the perceptual map, the business can represent the size of potential or current markets with circles (the size depending on how big the market is)
When the business understands the customer's view on it's brand and products relative to the competitors, they must study the competitor's position as well
After that, the business can select its preferred position in the map and monitor their positioning strategy
Example of Perceptual Mapping
3 Relevant Readings
Focuses on a specific target market
There will be little profits if there is little market growth
Brand positioning during Covid-19
https://www.igina.net/4-ways-to-strengthen-your-brand-positioning-during-covid-19/
How to improve brand positioning during Covid-19
https://thegreatroom.co/covid-19-covered-how-to-ramp-up-your-brand-positioning-in-a-pandemic/
How to stay connected with target markets during Covid-19
https://www.cuebiq.com/resource-center/resources/how-to-reach-audiences-during-covid-19-crisis/