Segmentation, Targeting and Positioning Model (PDF)

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BUSINESS: SEGMENTATION, TARGETING AND POSITIONING MARKETING
STRATEGIES
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Business 2
Introduction
The global competitiveness in the modern corporate world has led to increased concerns
to many firms to develop effective marketing strategies in a move to gain a competitive
advantage in the market by helping or focusing on satisfying consumer needs. Positioning and
segmentation is, therefore, a distinct part of any company marketing strategy and provide the
company with practical tools that enable them to focus their efforts in enhancing customer
satisfaction by meeting their needs in a way that is superior to their competitors (Hooley 2012, p.
183). The effectiveness of business strategies is dependent on its ability to adopt effective
marketing strategies that can successfully enhance the company’s’ brand performance in the
market. To develop these strategies, the management team, as well as the marketing department,
has to have a clear understanding of their markets, the needs and demands of their customers as
well as the marketing strategies employed by their competitors (Solomon, Dahl, White,
Zaichkowsky, & Polegato 2014, p. 4). One effective strategy to achieve this is through market
segmentation, targeting and positioning strategy and concepts. This essay, therefore, seeks to
provide an understanding of the above concepts and how different companies have adopted the
ideas to improve their marketing performances and gain a competitive advantage in the current
market.
Literature review of Market Segmentation, Targeting, and Positioning (STP)
Many companies in enhancing the existing marketing strategies have embraced the
market segmentation, targeting, and positioning strategy. The company or firms marketer has the
responsibility to create awareness of their brand and products amongst their consumers.
Differentiation of the marketing strategies is essential to ensure adequate product and brand

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promotional activities guided by the different individual needs and demands (Armstrong, Kotler,
Harker, & Brennan 2015, p. 15). Market segmentation can, therefore, be defined as the process
of creating small market groups or segments within the broader market with the aim of bringing
together the consumers or similar brands or those with same requirements, needs, and interests.
Targeting is the second step after an organization has developed its market segments and
involves the processes of devising various marketing strategies as well as brand promotional
schemes in accordance to the tastes and preferences or consumption behavior of the customers.
On the other hand market positioning is the last stage of STP cycle and involves the process of
creating an image of the company products of promoting the brand image in the minds of
consumers (Cantallops & Salvi 2014, p. 46). Market positioning plays an essential role in
helping the organization create a perception of the product in the minds of the company target
audience. The marketing concepts aim to improve the companies to serve specific customer
needs in the market.
Segmentation process involves finding out the existing consumers and their different
needs in the market. Its primary aim to identify what changed consumers need from the market
as most companies believe that specializing in meeting the needs of one group of consumers over
another as the best strategy to enhance business profitability. For example, the auto industry or
market is characterized by different consumers with some consumers more interested with the
roominess and safety features of their automobiles while another group of customer segment
may be concerned with the performance and speed of the machines (Lantos 2015, p. 36). In most
cases, the company may not concentrate on meeting the demands of all groups or market
segments but focusing their efforts on satisfying the requirements of a particular customer or

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consumer segments. To achieve specific customers’ needs market segmentation can be analyzed
from three different perspectives. The first way of meeting customer needs will be through the
use of differentiated strategy whereby the firms seek to develop market segmentation by treating
all the consumers equally without any efforts to focus on a particular market segment. Secondly,
market segmentation can also be achieved through a robust strategy where the firm seeks to
focus on one of the many existing consumer segments while leaving the other sections to their
competitors (Cross et al. 2015, p. 535). A company may choose to focus on developing a market
segment to offer low-cost goods which enables them to attract consumers who are price sensitive
and those by which the consumption behaviors are price sensitive. Lastly, the company can also
adopt a differentiated strategy where the focus is majorly on a particular group or market
segments, and most firms seek to focus on sectors which they gain maximum profitability.
Due to the existence of different variable influencing market segmentation, there is a
need for the organization or business marketers to determine which variables will be most useful
according to the organizational objectives in distinguishing a different group of consumers.
Therefore segmentation can efficiently be achieved in an organization by focusing on the
understanding of the various demographic variable, different consumer behaviors as well as by
understanding the benefits sought by the consumers from consuming a particular brand or even
purchasing good and services from one specific company (Priem et al. 2017, p. 7). A company
can, therefore, develop a market segmentation by identifying the needs of individual consumers
in a given locality or region. It can also seek to build market segmentation by classifying
consumer needs by their consumption behaviors. Lastly, most consumers consume specific
products or acquire a particular service based on the benefits the product or service offers to