Market Segmentation Targeting and Positioning
Market segmentation involves dividing a market into distinct groups of buyers with similar needs and characteristics. Targeting is the process of selecting the most attractive segments to focus on based on the company's resources and objectives. Positioning involves creating a distinct image and identity for a product or brand in the minds of the target market.
8 Key excerpts on "Market Segmentation Targeting and Positioning"
eBook - ePubMarketing for Tourism and Hospitality
Collaboration, Technology and Experiences
- Alan Fyall, Patrick Legohérel, Isabelle Frochot, Youcheng Wang(Authors)
- 2019(Publication Date)
- Routledge(Publisher)
...13 Market segmentation, targeting, and positioning Key terms market segmentation, targeting, positioning, segmentation criteria, competition Learning outcomes By the end of this chapter, students will: Understand the main stages of the segmentation process (segmentation, targeting, and positioning) Be aware of the various categories of segmentation criteria and their respective contribution to relevant market segmentation Understand the importance of positioning for companies and destinations facing fierce competition both on the domestic and worldwide markets Be introduced to a number of case study scenarios and examples that illustrate various market segmentation, targeting, and positioning approaches. Introduction The purpose of market segmentation is to help companies embark on effective and relevant actions in their markets. Seeking to reach all market segments through common marketing activities is not judicious when a client base is heterogeneous. On the other hand, providing each client with tailor-made services is unrealistic and economically unprofitable. It is only in a few high-end markets, such as tailoring or the luxury hotel sector, that it is feasible and appropriate to allocate resources individual to the company’s best clients. In most cases, market segmentation corresponds to the needs of a business model and its concomitant effectiveness that: show the targeting strategies of one or several groups of clients (segments); unite similar characteristics into one group (individual profiles, purchasing behaviors, etc.); isolate characteristics in between groups/segments. The first step of the market analysis is referred to as market segmentation. This is where companies establish an operational marketing plan adapted to the targeted groups of clients (product/service meeting the clients’ needs, suitable communication plan, attractive and target-appropriate price range, and distribution network providing optimum contact with the target clients)...
eBook - ePub- Paul Reynolds, Geoff Lancaste(Authors)
- 2013(Publication Date)
- Routledge(Publisher)
...5 Market segmentation, targeting and positioning of marketing 5.1 Introduction Now that we have a better understanding of the nature of marketing, we can examine the subject in more detail. A logical starting point is an examination of customers, and this is the theme of this chapter, along with the next chapter, which deals with their purchasing behaviour. Market segmentation can be defined as: The process of breaking down the total market for a product or service into distinct sub-groups or segments, where each segment may conceivably represent a distinct target market to be reached with a distinctive marketing mix. Definition Market segmentation can be defined as: the process of breaking down the total market for a product or service into distinct sub-groups. Marketers realise that, to improve their opportunities for success in a competitive market environment, they must focus marketing effort on clearly defined market targets. The intention is to select those groups of customers that the company is best able to serve in such a way that pressure from competition is minimised. The sequential steps in this process are segmentation, targeting and positioning. In this chapter we examine each of these steps, showing how they can be used to improve the effectiveness of marketing decision-making. There are increasingly more segmentation bases available, which means that targeting and positioning strategies are becoming more meaningful. 5.2 The need for segmentation We have seen that the essence of the marketing concept is the idea of placing customer needs at the centre of the organisation’s decision-making. It has also been said that the need to adopt this approach stems from a number of factors, including increased competition, better informed and educated consumers, and, perhaps most importantly, changing patterns of demand...
eBook - ePubStrategic Marketing
An Introduction
- Tony Proctor(Author)
- 2002(Publication Date)
- Routledge(Publisher)
...chapter ten SEGMENTATION, TARGETING AND POSITIONING INTRODUCTION The market that the organization sees through the strategic window is a very complex entity. In evolving strategies to take advantage of the opportunities that exist within it, the organization has to divide it into manageable chunks at which it can direct its relevant resources and capabilities. Segmentation, targeting and positioning are three of the pillars of modern marketing strategy. There are few markets these days in which an undifferentiated approach will pay dividends. The approach today is to accept that there are different demands in the market place and that a product or ser vice needs to be tailored-in specifically to meet these differing demands if it is to stand the best chance of success. The first step in the process of achieving this is to research the market to identify how it might best be segmented into buying groups that are significantly different from one another in ter ms of their buying behaviour and product or ser vice requirements. Having identified this and analysed the market along appropriate lines so that there are segments to the market, the next step is to decide which are financially viable propositions as far as the organization is concerned. Some may be too small or others too competitive. It is the task of targeting to define for the organization those that promise the kind of retur ns on investment that will help the organization achieve its objectives. Lastly there is the question of how to place or position oneself in the minds of the users in the targeted segments so that the product or service the organization has to offer stands out from those of competitors. Competitive positioning is the last of the three steps. SEGMENTATION Products can be designed and marketed so as to have a more or less general appeal to most members of a market...
- William Winston, Robert L Berl *Deceased*, Robert Sweeney(Authors)
- 2022(Publication Date)
- Routledge(Publisher)
...Part IV Segmentation and Targeting CHAPTER 10 Introduction to Market Segmentation and Targeting Robert L. Berl WHAT IS A MARKET? In theory, a market is an easy concept to understand. A market is a group of people who need a particular product or service, have the ability to purchase the product, are willing to use their purchasing power, and have the authority to buy. All four criteria must be present. In a complex society, such as ours, there are many markets. It is up to management to determine which markets are best suited to the company. In practice, the selection of a market is a difficult and crucial decision. TARGET MARKETING Target marketing is the process of examining the total market, the market’s various segments, selecting one of more of the segments, and developing products/services tailored to the market. For example, there is a market for footwear which has various segments such as boots, rubber wear, men’s shoes, women’s shoes, and so on. A footwear manufacturer might decide to concentrate on men’s boots or to provide a complete range of men’s footwear or market both men’s and women’s boots. The target marketing process has three steps: 1. Market Segmentation. Market segmentation entails dividing a market into distinct segments of buyers who could require different products/services and different marketing mixes. 2. Market Selection. The various distinct market segments are analyzed and evaluated to determine which segment or segments to enter. 3. Product Positioning. This is the process of determining how to position the product in the consumer’s mind and developing the appropriate marketing mix to reach the target market. MARKET SEGMENTATION Markets are made up of people, but people vary in many respects. They may want different products, have different resources on which to draw, are located in different geographical areas, and the like...
eBook - ePub- Richard M.S. Wilson(Author)
- 2010(Publication Date)
- Routledge(Publisher)
...Mind The third strand of what we referred to at the beginning of this chapter as STP marketing (segmentation, targeting and positioning) involves deciding on the position within the market that the product is to occupy. In doing this, the strategist is stating to customers what the product means and how it differs from current and potential competing products. Porsche, for example, is positioned in the prestige segment of the car market, with a differential advantage based on performance; Patek Phillipe is positioned as one of the highest quality watches available and for which the ‘owner’ is simply the product’s custodian for the next generation; Mothercare is positioned to appeal to mothers of young children, with its differential advantage being based on the breadth of merchandise for that target group; Duracell is positioned as the longer-life and hence better value battery; brands such as Quiksilver are positioned to appeal to the urban street warrior; while Ryanair and easyJet are positioned as low-cost airlines. The way in which an organization or a brand is perceived by its target markets (this is not just the existing customers, but also includes those who do not buy currently, might never buy, and so on) is determined by a series of factors including: The nature of the produce and the product range Product quality and performance Pricing levels The nature of the distribution network used The types of advertising appeal, the media used and the nature of anyone used to endorse the product Customer profiles Customer experiences and word of mouth. Positioning is therefore the process of designing an image and value so that customers within the target segment understand what the company or brand stands for in relation to its competitors. This can perhaps best be understood by considering an example such as grocery retailing, where the major UK retailers have set out to establish distinct market positions...
eBook - ePubPrinciples of Advertising
A Global Perspective, Second Edition
- Monle Lee, Carla Johnson(Authors)
- 2013(Publication Date)
- Routledge(Publisher)
...Carey and Elys A. McLean, “Aging Industrial Societies,” USA Today, August 12, 1998, p. A1. Once the target market has been selected, a company must find a way to fit the product to the selected market and to sell the product to that market. This is no small feat. Product positioning is one method marketers use to sell the product by setting it apart from competitors. PRODUCT POSITIONING Product positioning has been defined as “the art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it meaningfully apart from competition.” 17 Clearly, product positioning refers to the decisions and activities intended to create and maintain a certain concept of the company's product, relative to competitors’ brands, in consumers’ minds. For instance, Volvo employed a positioning strategy founded on safety. The company used the strategy whenever it advertised in the media, whether in print or on television. Chief Auto Parts Stores, a top-ranked U.S. retailer in aftermarket auto parts, steered away from everyday low pricing and repositioned itself around quality with a $3 million campaign. 18 Marketers sometimes analyze product positions by developing perceptual maps. Perceptual maps are created by questioning a sample of consumers regarding their, perceptions of products, brands, and organizations with respect to two or more dimensions. Product differentiation is the competitive strategy of creating a product difference that appeals to the preferences of a distinct market segment. In advertising, nothing is more important than informing prospects how your product is different. The idea of consumer perception is critically important in differentiating products because the differences between products can be either real or perceived. Real differences might include features, price, or quality. Differences created by perceptions are typically based on a product's image...
eBook - ePubEntrepreneurial Marketing
How to Develop Customer Demand
- Edwin J. Nijssen(Author)
- 2021(Publication Date)
- Routledge(Publisher)
...Availability of the position is important. Occupied positions will prevent the entrepreneur from taking a top-of-mind position, as customers resist substitution. At best, one will be labelled as copycat and second-rate in customers’ memory. 7 However, an abandoned position may be considered and adopted. For example, after first-mover Atari decided it should transform into a fully-fledged computer manufacturer, the space of game computer specialist was available again. Newcomer Nintendo jumped in and became the next videogame console brand and familiar household name. Figure 3.6 summarises the steps of the effectuation process of segmenting, targeting, and positioning. The framework can help an entrepreneurial firm discovering the initial product-market fit. As explained, the sequence begins on the left-hand side of the figure with the strengths and weaknesses of the radically new product application, and then looks for a suitable or best-fitting (emerging) target segment. It involves several iterations based on market information collected in this process. Finally, the target segment will be identified and selected, after which a positioning statement can be developed to address the customers of this particular segment. This also will take several iterations, as we will explain in more detail in the following section. 3.6 Validation: initial customer feedback By no means is segmentation–targeting–positioning for radical new products a linear process. Beginning with the entrepreneur’s new product and initial target customer segment, validation is needed. 8 This is a qualitative process and requires conducting problem interviews with a set of customers from the identified target segment to learn about these customers’ problems and the shortcomings of current solutions that they may be using. The objective is to observe and document how and why they experience these problems, but also to form an impression of what their latent needs are...
eBook - ePubMarketing Higher and Further Education
An Educator's Guide to Promoting Courses, Departments and Institutions
- Gibbs, Paul, Knapp, Michael(Authors)
- 2012(Publication Date)
- Routledge(Publisher)
...4 Market Segmentation, ‘Taking a Position’ and Seeking Differentiation Segmentation Customers – students, academics and other stakeholders – have different needs and only some of these can be satisfied by any one institution. Customization is increasingly breaking down markets into groups with smaller, more specific needs. (However, while this fragmentation of the mass market may well be true in Europe and the US, in other parts of the world – including Russia, China and India – education still has a mass market to aim for with all the substantial benefits this can create.) Segmented markets have three main characteristics: enhanced value, which can lead to higher profit; a better match with customer needs; the ability to exclude those segments that do not match the student/ programme values. They can be identified or created through: benefit segmentation – for example, the availability of low prices or short courses, job relatedness, relevance to recreational interests, immediate recognition for use in the market; demographic segmentation – for example, socio-economic grouping, ethnic origin (this is most often favoured by government for it reinforces their notion of centrally controlled social justice); lifestyle segmentation – for example, continuing professional development for students or lifelong learners. Many segments can be revealed by observing the attributes of certain student groups. Institutions can target one segment or many segments to develop the most appropriate proposition. In the UK, for instance, the notion that learners, particularly mature learners and those from the lower socioeconomic groups, see education as a means to an end and not just an end in itself, has an enormous effect on the type and form of programmes that institutions have to offer. More than that, it makes students behave as traditional customers for a service. They want extra value and today most of that value is in the external worth of the accredited award(s)...
