Market segmentation refers to the aggregation of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. It is a form of critical evaluation rather than a prescribed process or system that enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another. Segmentation divides a market into distinct groups with distinct needs, characteristics, and/or behaviors. Effective segmentation must be measurable, accessible, substantial, differentiable and actionable. There are four segmentation bases that must be considered when aggregating prospective buyers: Geographic, Demographic, Psychographic and Behavioral. Geographic refers to the physical location of the market segment, country, state, city, and neighborhood. Demographic refers to their age, gender, education, occupation, religion, race, nationality and income. Psychographic attempts to identify personality based and/or lifestyle based decisions, while behavior delves into and identifies the key benefits sought, user status, user rates and loyalty of the market segment.
Targeting refers to a set of buyers sharing a common needs or characteristics that a company decides to serve. Targeting is utilized to measure segment attractiveness and select target segments. Size and growth, company objectives and resources, and structural attractiveness are used evaluate segment attractiveness. Different factors are utilized to drive a target market strategy. Company resources, degree of product variability, product life cycle stage and competitor’s marketing strategies all help drive a target marketing strategy.
Positioning is a marketing strategy that aims to make a brand occupy a distinct position, relative to competing brands, in the mind of the consumer. Companies generally apply