Segmentation, targeting and positioning

Segmentation, targeting, and positioning are marketing tools used by a company to gain competitive advantage in the market. They help the company to differentiate its product offering from that of its competitors and ensure that the same reaches the exact market profile for which it is intended.

Segmentation, targeting, and positioning together comprise a three stage process. We first determine which kinds of customers exist, then select which ones we are best off trying to serve and, finally, implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way.

Demographic segmentation consists of a wide variety of bases for subdividing markets, and each of these is now discussed:

•Age is a good segmentation variable for such items as clothes where the fashion-conscious young are more susceptible to regular changes in style and older segments are perhaps more concerned with such factors as quality and comfort.

•Sex is a strong segment in terms of goods that are specifically targeted towards males or females and again an obvious example is clothing. Here, fashion is a powerful element when purchasing, and a whole industry surrounds this criterion.

•Income as a segmentation base is more popular in certain countries like the USA than others who regard such matters very privately.

•Social class is possibly the single most used variable for research purposes.