Segmentation, Targeting, and Positioning

• What is market segmentation?


  Market segmentation is the process of dividing a market into distinct groups of consumers with similar needs, characteristics, or behaviors.
• what are common segmentation groups?

  • age
  • gender
  • income
  • lifestyle
  • occupation
  • interests
  • culture
  • location
• what is price discrimination?


  charging different prices to different market segments based on their willingness to pay
• what is market positioning?


  Market positioning refers to the perception of a brand or product in the minds of consumers relative to its competitors.
• what does segmentation, targeting, and positioning involve?

  • identifying the different consumer groups within the market
  • decide which segments are best to target
  • choosing the best way to position products in order to reach target markets
• what is the segmentation criteria?

  • demographic (age, gender, income)
  • psychological (lifestyle, interests, values)
  • geographical (region, country)
  • behavioural (brand loyalty, purchasing habits)
• why would a business segment a market?


  to understand customer groups and develop strategies to target them to maximise profitability
• what is targeting?


  the process of evaluating the attractiveness of segments and then choosing one to directly market
• what is positioning?


  how a company wants its product to be perceived in comparison to its rivals
• how can a business effectively position?


  use of branding to create a distinctive image and emphasising unique benefits and attributes
• advantages of segmentation, targeting and positioning?

  • better understanding of customer needs
  • carry out more in depth market research
  • differentiate products to please customers
  • higher customer loyalty
  • reduces competitive threat
  • increases entry barriers
  • gives competitive advantage
  • good use of price discrimination
  • increase overall revenue
• disadvantages of segmentation, targeting and positioning?

  • risk
  • high costs