Segmentation and positioning help companies target consumers based on their wants, needs, and buying habits. Segmentation involves dividing consumers into categories based on variables such as demographics and benefits sought. Positioning involves designing and marketing a product that meets the needs of the chosen group. Targeting occurs between segmentation and positioning, and marketers must consider changes in the market or demographics over time. Repositioning is difficult and may not always be successful.
In marketing, segmentation and positioning are used to help companies identify and target groups of consumers who might buy a product. Segmenting is the process of defining types of consumers based on their wants, needs and buying habits. Positioning is the process of designing and marketing a product that meets the needs of the chosen group. While the physical characteristics of the product play a role, an important objective of positioning is influencing how the product is perceived by consumers. Segmentation, choosing which groups to market to, takes place between targeting and positioning.
Segmentation is a complex process that attempts to divide consumers into categories. The first goal of segmentation is to decide which variables are important. A seemingly endless number of variables can be used to define a segment, including demographics, benefits sought after by the consumer, and how often the consumer is likely to buy the product. Marketers must also consider brand loyalty, the tendency for consumers to stick with a brand they know, even if another brand is offering a better or cheaper product.
There are two basic segmentation methods. The drill down method is used most often. It assumes that customers are essentially the same; therefore, marketers must look for differences in defining marketing segments. The design method assumes that customers are all different, so the marketer should look for similarities as a basis for defining marketing segments.
Marketing the object to the chosen segments is known as positioning. The company must design a product that meets the consumer’s needs and wants while staying within a reasonable budget so that the price of the product does not exceed what consumers are willing to pay. Next, marketers must promote the product in a way that appeals to target groups. Finally, the product must be distributed to consumers. These steps – product design, pricing, promotion and distribution – are known as the marketing mix.
Targeting occurs between targeting and placement. Marketers use the information gathered during segmentation to decide which groups to market to. This choice is based on group size, how much money people in the group are willing to spend, and other variables.
Targeting and positioning are not a one-time occurrence. Significant changes in the market or demographics over time may require marketers to reevaluate segments. If the brand faces competition or public relations issues, marketers can try to reposition the brand. Repositioning is much more difficult than original targeting and positioning, because marketing must overcome strong associations that already exist in consumers’ minds. This process is not always successful.
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