Breaking Down the Market with Segmentation, Targeting and Positioning
In a highly intertwined world of countless product alternatives, the marketplace is enabled by marketers, whose responsibility is to create awareness of their products amongst the consumers.
The success of a business hinges on the public awareness of the brand’s existence. The unique selling proposition of the brands must be delivered and communicated clearly to potential customers.
A brand can’t target a broad audience without having different strategies for various segments of the market. Individuals have varying requirements, needs and demands.
Marketers usually go through the process called STP: segmentation, targeting and positioning.
The first step in the process of product promotion is segmentation, wherein the broad market is divided into smaller segments comprising of individuals who have similar profiles and show inclination towards similar products and brands.
Market segmentation refers to the process of creating small groups of audiences within a large market to bring together consumers who have similar requirements, needs and interests.
The consumers in a particular segment will generally have similar responses to changes in the market and require similar products.
For instance, the market can be segmented into products for males and females or between categories for children, student and professionals. The market can be segmented based on different criteria: demographics, psychographics or lifestyle.
Targeting is the second stage in the process and is done once the market has been segmented.
For every relevant market segment, the marketer can devise different marketing strategies and promotions to cater to the individuals in each of the market groups. Here, much of the effort is placed on understanding every market segment audience, what type of products they need and how to effectively market the product to them.
Positioning is the last stage in the marketing process. Once the brand has its sights set on the target market, positioning defines how the product will be perceived by consumers. Marketers create an image of the product in the minds of consumers through positioning.
Ideally the created image aligns with the requirements and demands of the target audience. Big brands will generally have different product lines for different market segments and are positioned so that the respective target audience is aware of the product.
For instance, the company offering a luxury brand lotion will cater to high net worth individuals and place emphasis on extra features. The same company may have another brand that will target the lower income group where pricing may be the differentiating factor throughout their marketing campaigns.
Thoughtful positioning is critical in staking out a competitive advantage in the market. Positioning is a tool to help tailor your value proposition and effectively communicate it to customers.