Market Segmentation, Targeting, and Positioning
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Market Segmentation

Market segmentation is a process of dividing the total market for goods or services into several small groups or segments on the basis of customers’ different needs, wants, and characteristics.

  • A market is a group of buyers.
  • Buyers have different backgrounds (social, economic, psychological, and geographical).
  • A company cannot serve all customers in a brand market.
  • That’s why, the market should be segmented.

Types of Market Segmentation

  • Mass Marketing: Mass marketing is a business marketing approach that seeks to advertise to the widest possible customer base, up to and including the entire market available.
  • Individual Marketing: Marketing strategy by which companies leverage data analysis and digital technology to deliver individualized messages and product offerings to current or prospective customers.
  • Target Marketing: Marketing to a specific group of people with shared characteristics that a business markets its products or services.

Bases for Segmenting Consumer Market

The consumer market is the collection of people who buys for personal or household use. All the people of the world are consumers. The bases for segmenting consumer markets are as follows:

  • Geographical Variables: Area, Topography and Climate, Rural and Urban
  • Demographic Variables: Age (children, adult, and old age), Gender (male and female), Income Group (rich, middle class, and Poor), Social Class (upper, middle, and lower), Ethnicity and Religion (Brahmin, Chhetri, Hindu, Christian, Buddhist, Muslim, etc.), Occupation (teacher, manager, farmer, etc.), Family Size and Life Cycle (nuclear, and joint)
  • Psychographic Variables: Buying Motive (fear, love, affection, desire to belong), Lifestyle (activity, hunting, fishing, farming, etc.), Personality (introvert, extrovert)
  • Behavioral Variables: Occasions, Benefits, User Status, Usage Rate, Loyalty Status, Sensitivity

Bases for Segmenting Industrial (Organizational) Market

  • Types and Size of the Industry: Agriculture, Forestry, Mining, Transport and Communication, Finance, Banking, Insurance, Manufacturing Company, etc.
  • Operating Variables: Technology (high, low, modern, manual, robotic, etc.), Usage Rate (heavy, medium, light), Service Requirement (warranty, installation, maintenance)
  • Purchase Procedure: Documentation (government, business), Negotiation and Bargain, Contractual

Requirements for Segmentation

  • Divisible: If all people have the same characteristics, there is no need for segmentation. So, there is a need for heterogeneous demands and characteristics.
  • Measurable: Size, needs, purchasing power, and characteristics of the customer must be measurable.
  • Accessible: To reach and serve the market through media, transportation, and infrastructure within the sales force territory. Customers concentrated in certain targeted areas must be fulfilled.
  • Profitable: When there is market segmentation, there must be profitability. There is profit when there are more buyers.
  • Actionable: Formulation of Unique Selling Proposition (marketing strategy of informing customers about how one’s own brand or product is superior to its competitors).

Evaluation of Market Segmentation

  • Segment Size and Growth: Manageable numbers of customers in a certain target market.
  • Segment Structural Attractiveness: proper product delivering channel and the target market must be profitable.
  • Company Objectives and Resources: The target market must align with the company’s objectives and can be served by utilizing the current company’s resources.

Analysis and Selection of Market Segmentation

  • Single Market Coverage: Under this strategy, a company selects only one market segment and prepares a marketing mix for this. (e.g., selling WaiWai noodles in only a Bharatpur city)
  • Multi-Segment Coverage: The company selects two or more segments at a time and prepares separate market strategies accordingly. (e.g., selling WaiWai noodles in cities like Bharatpur, Nawalparasi, Ratnanagar, and Gaindakot)
  • Product Specialization: The company sells one type of product in several market segments. (e.g., selling only WaiWai noodles in cities like Bharatpur, Nawalparasi, Ratnanagar, and Gaindakot)
  • Market Specialization: The company selects only one market segment and deals with different types of products by specializing in them. (e.g., selling noodles like WaiWai, Mama, Akabare, etc. in only a Bharatpur city)
  • Full Market Coverage: The company selects all the market segments as far as possible and deals with all the products under one line. (e.g., selling noodles like WaiWai, Mama, Akabare, etc. in cities like Bharatpur, Nawalparasi, Ratnanagar, Gaindakot, etc.)


Product Positioning

It is the act of positioning the product in the mind of the customer (e.g. expensive items for higher income groups).

“Positioning is the act of designing the company’s image and value offer so that segmented customers understand and appreciate what the company stands for in relation to its competitors.” – Philip Kotler

It is implanting the product’s unique benefits and differentiation in the customer’s mind.

Types of Product Positioning

  • Attribute Positioning: It is positioning what attributes products possess in the consumer’s mind. (features, size, color, durability, RAM, screen quality, etc. of Samsung Galaxy Core Prime)
  • Benefits Positioning: It is positioning what benefits products give in the consumer’s mind. (better health, brightening and protection of teeth by using Colgate toothpaste)
  • Occasions Positioning: It is positioning on what occasions the product is used. (umbrella for summer, jackets for winter, traveling for holidays, etc.)
  • User Positioning: It is positioning what type of people will use the products. (upper class, lower class, children, adults, lovers, spouses, etc.)
  • Product Class Positioning: It is positioning by categorizing the product’s class. (local/imported, costly/cheaper, branded/regular, etc.)
  • Image Class Positioning: It creates the image of the product using metaphors. (strong as a Tiger, fast as a Cheetah, feel like a Princess, comfortable like Heaven, etc.)

Product Positioning Process

  • Identify potential competitive advantages (why the customers should use your product).
  • Choosing the competitive advantage (choosing a specific advantage of the product that is rare).
  • Selecting an overall positioning strategy (deciding the complete process of maintaining advantage to the product and delivering it to the market).
  • Developing a positioning statement (crafting the best lines for promoting promised advantage).
  • Communicating and delivering the competitive advantages (delivering the promised advantage in terms of promotion and actual experience of the product).
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