SEGMENTING,

TARGETING, AND
POSITIONING
 Segmenting
◦The need of companies to classify the
population into groups of people with similar
characteristics in order to offer them a product
and conduct marketing activities for them
 Market Segmentation
◦ The process of dividing a big market into smaller segments
of buyers with distinct needs, characteristics, or
behaviours.
 Top 5 Reasons for Market
Segmentation
1. Better satisfy customer needs and wants
2. Better communication
3. Opportunity for Growth
4. Increased Innovation
5. Higher Profits/ Market Share
Most Common Basis for Market
Segmentation
1.Geographic Segmentation
2.Demographic Segmentation
3.Psychographic Segmentation
4.Behavioral Segmentation
 How to Do Effective Segmentation
1.Market Segments have to be measurable and significant –
big in market size
2.Market Segments need to be accessible for easier
communication and delivery of goods.
3.They also need to be differentiable – they react differently
and have different needs and wants
 Targeting
◦ After segmentation, companies need to choose the
right market segment to pursue and offer their
products to.

◦ Target Market – a set of buyers who have common

needs and characteristics that the company decides
to serve.
 Mass Marketing
◦ “one size fits all” approach that focuses on the common concern of
a big market and targets them with one offer.
 Multi-segment Marketing
◦ Focuses on two or more segments of the market in one product
category.

◦ Example: big food manufacturer has different brands of cereals

catering to different tastes of the market.
 Niche Segment Marketing
◦ The company chooses to target a small market with big
purchasing power.
◦ Always in the premium category, and naturally dictates a
higher prices.
 One-to-one Marketing
◦ Is the opposite of mass marketing. Provides individualized
attention to customers to build a long-lasting and
personalized relationship with them.
◦ Ex.: a company may offer customers some customization
in the product they buy.
POSITIONING
 Positioning
◦ Companies want their customers to remember their brands in a
positive light.
◦ Placing a product’s distinct characteristics in the consumers’ minds
relative to its competitors
 Differentiation Strategies
◦ Also called competitive advantage
◦ A product’s advantage over its competitors gained by offering
consumers better value
◦ What sets the product apart from its competitors?
◦ Why should customers buy this product instead of its competitors?
Also called unique selling proposition or USP.
 MARKETING TO
BUSINESS MARKETS VS
MARKETING TO
CONSUMER MARKETS
 Business Market
◦ Organizations, groups, and companies that purchase products as
raw materials that require further processing
◦ Require more personal attention when being serviced, so products
can be tailor-made for their exact needs.
◦ They purchase in bulk
 Marketing to Consumer Markets
◦ Requires more creativity as their attention must be captured mostly
through nonpersonal means.
◦ Consumers with similar needs and preferences have to be grouped
together so a company can serve them.
◦ Companies want to effectively market their products to the
right market. In order to do so, they must do STP or
Segmenting, Targeting, and Positioning
◦ Companies rarely use just one segmentation basis. To help
them understand their consumers better, companies use a
combination of two or more types of segmentation so they
can market their product effectively.