This document discusses segmentation, targeting, and positioning in strategic marketing. Segmentation involves identifying customer groups based on relevant characteristics. Targeting involves selecting segments to target. Positioning refers to how a company communicates its value to customers in a target segment. The document provides details on different segmentation approaches, targeting strategies, and how to establish an effective positioning strategy.

1. Prepared by: Sara Arab

2. the segmentation, targeting and positioning is 
central to effective strategic marketing.

Segmentation: is concerned with the process of 
identifying different groups of customers who
are similar in ways that are relevant to marketing.
Targeting: decisions can then be made based on 
range of identified segments.
Positioning: refers to the way in which an 
organization tries to communicate its value
proposition to its target market in order to
convince customers that it has a distinct offer

3. Segmentation essentially a process whereby a 
provider of goods or services chooses to groups
prospective customers together on the basis of a
set of common characteristics that have
significant implications for its marketing activity.
Common characteristics that might be used to 
segment a market include variables such as age,
income, personality and lifestyle.
Targeting is then concerned with the 
identification of an appropriate set of segments
which the organization will seek to serve.
As one extreme, each individual customer could 
be presented as a segment of one because each
individual has different needs.

4. 1 it facilitates efficient resource utilization: a company is 
able to limit the scope of individual components of the
mix and thus reduce costs.

2 it allows effective targeting of new customers: nowadays, 
it is unusual for a company to have a completely
indiscriminate approach to targeting new customer.

3 it facilitate competitive advantage: the more specific an 
organization's approach to segmenting the market, the
easier it is to establish and maintain competitive
advantage.

4 it directs the marketing mix: each target segment 
chosen by an organization should be subject to a specific
and relevant marketing campaign.

5. 5 it enhances customer satisfaction: the mix 
should achieve a close match with customer
needs and wants. The more precisely a
product and its features reflect the
characteristics of a given group of
individuals, the greater the degree of
satisfaction they should experience from its
consumption.

6. There is no best way to segment a market. 
there is a variety of approaches that can be
used with varying degrees of complexity and
sophistication.
For an organization to get an approach to 
segmentation that is right for it depends on a
good understanding of the market, the right
skills and knowledge and carful evaluation of
different options.

7. 1 a sense of touch for the market: the understanding of the 
market should be based on the ability to integrate all relevant
sources of knowledge, the whole picture of the market.

2 analytical skills and resources: access to appropriate data and 
the ability to manipulate and interpret it is vital. The more varied
the data about a market, the greater the number of options for
segmentation.

3 commercial judgment: common characteristics can be used in 
market segmentation. These vary from basic demographic
criteria, such as age and gender, through to subtle and complex
criteria based upon personality traits.

4 creative insight: to be successful, segmentation calls for a 
combination of elements of marketing as both art and science.
Science is required in terms of gathering of factual information,
its analysis and the use of various modeling and simulation
processes.

8. 1 measurability: this is concerned with the 
extent to which the preferences, size and
purchasing power of different segments can
be measured.

2 profitability: a segment should be the 
largest possible homogenous group worth
going after with a tailored marketing
programme.


9. 3 accessibility: these refers to the degree to which 
the segments can be effectively reached and served.
A bank that wishes to target individuals in social class
AB will usually be to gather enough information about
the television programmers that such individuals
watch and the newspaper that they read and this
should make such a segment relatively accessible.

4 relevance: a segmentation system which groups 
individuals in terms of lifestyle and establishes that
the type of credit card carried "standard, gold,
platinum "depends on an individual's aspirations and
self-concept uses a personality-based characteristic
explain preference.

10. 8.4.1 customer characteristics "customer 
oriented segmentation":-
1 demographic: age- gender- family 
relationship".
2 socio- economic: income- financial assets- 
social class".
3 geographic: region or locality. 
4 psychographic: attitudes- beliefs- motives. 

11. This approach comprises variables that define 
the nature of the utility that consumers seek
to gain from the consumption of a product or
services.
8.5 approaches to segmenting "business to 
business markets:-
The cost of acquiring a new customer in the 
organizational business arena are usually
considerably greater than in the consumer
arena, and so too are the income flows.

12. Choices must be made regarding which 
segments to target. Choice of segmentation
criteria and choice of targets is an interactive
and interdependent set of processes which
may well require a high degree of iteration
before a final strategic position is arrived at.

The basic of targeting strategies is as follow:- 

13. 8.6.1 undifferentiated targeting:- 
An analysis of customer characteristics may 
simply reveal the absence of a compelling
variable upon which segmentation could be
based.
A range of development, such as the 
regulation induced increase in new customer
acquisition cost, lower product margins and
the pressure to improve persistency rates,
have all served to make the life insurance
industry more discriminating in its all
approach to gaining new customers.

14. 8.6.2 differentiate targeting:- 
This arises when a company has been able to 
identify a commercially valid basis upon
which an aggregate market can be broken
down into segments.
The fast moving consumer goods sector has 
probably been the best example of
differentiate targeting.

8.6.3 focused segmentation:- 
Company breaks a market down into a set of 
segments but chooses to target a small
subset of available segments.

15. 1 single segment concentration: the
organization focused only on a single
segment in the market and supplies product
to satisfy the needs of those customer group.
2 selective specialization: other type of niche 
marketing. Focused only on one segment the
organization chooses to operate in several
segments to less risk.


16. 3 product specialization: most market can be 
seen as a different number of customer
groups and a number of different but related
product. The organization focused on present
a particular product type to a range of
customer groups.

4 market specialization: this approach is the 
opposite to product specialization. The
organization chooses to specialize in meeting
the needs of a particular customer groups

17. 8.6.4 customized targeting:- 
This approach represents the ultimate 
manifestation of the segmentation concept,
based as it is upon a separate marketing mix
for each customer.

18. Positioning is a piece of marketing language 
that concerns the issue of perception.
Positioning is about how a company or 
brands wants itself to be perceived in the
minds of the individual who comprise its
target segments.
The objective of positioning is to generate 
and maintain a clear value proposition to
customers, creating a distinctive place in the
market for the brand or organization.

19. Positioning should be based upon product and 
services characteristics that:
Are relevant to the target segment. 
Achieve differentiation from the competition. 
Can be communicated clearly to the market. 
Can be sustained. 

Positioning is a truly strategic concept that 
requires a considerable investment over a
prolonged of time.
The brand characteristics upon which positioning 
may be built can related to demonstrable product
and services attributes or image related factors.
Positioning is less well developed as a concept in 
the field of financial services than in the field of
consumer goods.

20. Relies primarily on information about consumer 
perceptions of both the organization and its
competitors. This information may be based
upon either quantitative research based data or
subjective judgments.
Trough the research and evaluation process, the 
organization typically tries to identify two major
dimensions of itself or its product that could
from the basis of competitive advantage.

Whatever position is decided upon, it must 
satisfy some basic tests of its likely
effectiveness:-

21. 1 clarity: is the basis of the position clear and 
straightforward to grasp?
2 credibility: can the position be justified and 
validated by the evidence available?
3 consistency: is the essence of the position 
communicated consistent over time in all
elements of the marketing mix?
4 competitiveness: does the position result in 
benefits to the consumer that are
demonstrably superior to those provided by
its competitors?

22. as any aspects of marketing strategy, 
positioning needs to be reviewed on an
appropriate basis to ensure that it delivers
the required differentiation. Over time,
market forces may exert pressures that
threaten the relevance and value of the
position.