Mapping the Market: Segmentation, Targeting, and Positioning
Summary
This chapter explored market segmentation, targeting, and positioning (STP) — essential tools for marketers aiming to connect with their ideal audiences.
Key Takeaways
- Segmentation involves dividing a broad market into smaller groups based on shared characteristics such as demographics, behaviour, or geography. This step allows businesses to focus their resources on the most relevant segments.
- Targeting is the process of evaluating and selecting specific market segments to serve. Using frameworks like ADAMS ensures that target segments are feasible and profitable.
- Targeting Strategies range from broad approaches like undifferentiated marketing to highly specific strategies like micromarketing, allowing organizations to align their focus with their goals and resources.
- The Marketing Mix is customized to suit the chosen target market, ensuring that product, price, place, and promotional strategies are relevant and effective.
- Differentiation and Positioning help businesses stand out in competitive markets. Differentiation emphasizes unique attributes, while positioning defines how offerings are perceived relative to competitors. Tools like perceptual maps are vital in this process.
Exercises
Check Your Understanding
Exercise 1: Identifying Segmentation Approaches
Exercise 2: Applying the ADAMS Framework
Task: Evaluate the following market segment using the ADAMS framework: “Eco-conscious senior travelers aged 60+ who prefer sustainable, nature-based vacations.”
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- Accessible: Yes, this segment can be reached through targeted marketing channels.
- Differentiable: Yes, their preferences for eco-friendly travel distinguish them from other segments.
- Actionable: Yes, travel companies can create specific eco-friendly packages for seniors.
- Measurable: Yes, the size and characteristics of this segment can be quantified.
- Substantial: Potentially, depending on the size of the eco-conscious senior market in the target area.
Exercise 3: Creating a Buyer Persona
Task: Develop a brief buyer persona for a young professional interested in weekend getaways. Include demographic, psychographic, and behavioural characteristics.
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- Name: Weekend Warrior Wendy
- Age: 28
- Occupation: Marketing Manager
- Income: $75,000/year
- Marital Status: Single
- Location: Urban centre
- Psychographics: Values work-life balance; seeks new experiences, health-conscious
- Behaviour: Books last-minute trips; prefers boutique hotels; uses social media for travel inspiration
Exercise 4: Positioning Strategy
Task: Describe a positioning strategy for a new eco-resort targeting health-conscious millennials. Include the unique selling proposition (USP) and how it differentiates from competitors.
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- Positioning: “The ultimate wellness retreat for environmentally-conscious young professionals”
- USP: “Rejuvenate your mind and body while minimizing your carbon footprint”
- Differentiation:
- Offers yoga and meditation classes in natural settings
- Serves organic, locally-sourced meals
- Provides eco-friendly accommodations with modern amenities
- Organizes volunteer opportunities for environmental conservation
Exercise 5: Multiple Choice Questions
Glossary of Key Terms
ADAMS Framework: A set of criteria used to assess market segments, which stands for Accessible, Differentiable, Actionable, Measurable, and Substantial. This framework helps marketers evaluate the viability of different segments for targeting.
Allocentrics: Consumers who prioritize social and environmental factors in their purchasing decisions. They tend to be more community-oriented and value experiences that benefit others.
Behavioural Segmentation: The division of the market based on consumer behaviours, such as purchasing habits, brand interactions, and product usage rates. This approach helps businesses target consumers based on their actions with the brand.
Buyer Personas: Detailed, semi-fictional representations of individual customers within market segments. They are created using data and research to embody specific traits, behaviours, needs, and goals of ideal customers.
Demographic Segmentation: The process of dividing the market based on demographic factors such as age, gender, income, education, occupation, and family size.
Differentiated Marketing: A targeting strategy that involves targeting several market segments with a different offer for each.
Differentiation: The creation of a product or service that has unique attributes valued by customers and perceived as distinct from competitors’ offerings.
Firmographic Segmentation: The segmentation of business markets based on characteristics such as company size, industry, location, and organizational structure.
Geographic Segmentation: Dividing the market based on location, such as countries, regions, cities, or neighbourhoods. This method is particularly useful for businesses that need to cater to regional preferences or climate conditions.
Micromarketing: A targeting strategy that tailors products and marketing programs to suit the tastes of specific individuals and locations.
Niche Marketing: A targeting strategy that focuses on a small but well-defined segment of the population.
Perceptual Mapping: A visual representation of how consumers perceive a brand in relation to competitors. It helps identify positioning opportunities by showing where brands are located in consumers’ minds.
Positioning: The process of designing a product or service to occupy a distinct and valued place in the target customer’s mind relative to competing products.
Psychocentrics: Consumers who prefer familiar destinations and experiences. They tend to be risk-averse and seek comfort in known environments.
Psychographic Segmentation: Segmenting the market based on psychological characteristics, including lifestyle, values, interests, and personality traits.
Segmentation: The process of dividing a larger market into smaller segments based on shared characteristics such as demographics, behaviour, or geography. This allows businesses to tailor their products, services, and marketing strategies to meet the specific needs of each segment.
Targeting: Selecting one or more market segments to focus marketing efforts on. The goal is to reach the most attractive segments that align with the company’s objectives and resources.
Technographic Segmentation: The process of segmenting consumers based on their technology usage patterns and preferences. This includes factors like device ownership and online behaviour.
Undifferentiated Marketing: A targeting strategy that ignores segmentation differences and aims at the entire market with one offer or strategy.
Unique Selling Proposition (USP): A marketing concept that defines what makes a product or service unique compared to competitors. It highlights specific benefits that set it apart in the marketplace.
Unique Value Proposition (UVP): Similar to USP but focuses more on the overall value offered to customers rather than just unique features. It emphasizes how a product meets customer needs better than alternatives.
