Segmentation, Targeting, and Positioning in Marketing Strategy

Market Segmentation

The process of dividing a broad consumer or business market, typically consisting of existing and potential customers, into sub-groups of consumers based on some type of shared characteristics.

Target Market

The specific group of customers that a business aims to serve with its product or service, determined by segmentation analysis.

Product Differentiation

The process of distinguishing a product or offering from others in the market to make it more attractive to a particular target market.

Market Positioning

The process of establishing and maintaining a distinctive place in the market for a brand, product, or service, as perceived by customers in relation to competing products.

Demographic Segmentation

Dividing a market into segments based on demographic variables such as age, gender, income, education, etc.

Income Segmentation

Dividing a market into segments based on the income level of consumers, often used in combination with social-economic grouping.

Behavioral Segmentation

Dividing a market based on consumer behaviors such as purchase patterns, product usage, or brand loyalty.

Geographical Segmentation

Dividing a market into segments based on geographic criteria such as region, city, or neighborhood.

Niche Market

A smaller, more specific market segment that is targeted based on a narrower set of customer needs, typically with less competition.

Mass Market

A large, broad market that targets a general audience, often offering products with little differentiation.

Targeting Strategy

The approach used by a business to target its marketing efforts to a specific segment or group of customers. This can be mass marketing, segmented, or concentrated.

Mass Marketing

A strategy where a business targets the whole market with one offer, without differentiating between market segments.

Segmented Marketing

A marketing strategy in which a business targets multiple market segments with distinct offers or products tailored to each segment.

Concentrated Marketing

A marketing strategy where a business targets a small, specific segment, often a niche, with a specialized offering.

Benefits of Market Segmentation

Focuses resources on target segments, allows businesses to grow in specific areas, aids product development, and improves the effectiveness of the marketing mix.

Drawbacks of Market Segmentation

Segmentation can be imprecise due to lack of reliable data, and markets may change rapidly. Reaching the segment can also be challenging.

Advantages of Niche Marketing

Less competition, clearer focus, ability to charge higher prices, and higher customer loyalty.

Disadvantages of Niche Marketing

Lack of economies of scale, risk of over-dependence on a single market, and vulnerability to market changes.

Positioning Map

A tool used to analyze how a product or brand is positioned in the market relative to its competitors based on various factors such as quality, price, etc.