Segmenting-targeting-positioning: Difference between revisions

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In [[marketing]], '''segmenting, targeting and positioning''' ('''STP''') is a broad framework that summarizes and simplifies the process of [[market segmentation]].<ref>Moutinho, L., "Segmentation, Targeting, Positioning and Strategic Marketing," Chapter 5 in Strategic Management in Tourism, Moutinho, L. (ed), CAB International, 2000, pp. 121–166</ref> Market segmentation is a process, in which groups of buyers within a market are divided and profiled according to a range of variables, which determine the market characteristics and tendencies.<ref name=":0">{{Cite book|title = Market segmentation in hospitality research: no longer a sequential process|last = Bowen|first = John|publisher =|year = 1998|isbn =|___location =|pages =}}</ref> The processes of segmentation, targeting and positioning are parts of a chronological order for market segmentation.

* Segmentation comprises identifying the market to be segmented; identification, selection, and application of bases to be used in that segmentation; and development of profiles.

* Targeting is the process of identifying the most attractive segments from the segmentation stage, usually the ones most profitable for the business.<ref name=":0" />

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{{See|Market analysis|Market segmentation}}

Segmenting a market has widely been debated over the years as researchers have argued over what variables to consider when dividing the market. Approaches through social, economic and individual factors, such as brand loyalty, have been considered<ref>{{Cite book|title = Marketing, Planning and Strategy|last = Jain|first = S C|publisher = South-Western Publishing Co.|year = 1993|isbn =|___location = Cincinnati, OH, United States|pages =}}</ref> along with the more widely recognized geographic, psychographics, demographic and behavioral variables proposed by Philip Kotler.<ref>{{Cite book|title = Marketing Management Analysis, Planning, Implementation, and Control|last = Kotler|first = Philip|publisher = Prentice Hall International|year = 1997|isbn =|___location = New Jersey|pages =}}</ref> Segmenting a market therefore, is a process of ''organising'' the market into groups that a business can gain a competitive advantage in. They must, however, avoid over-fragmenting the market as the diversity can make it difficult to profitably serve the smaller markets.<ref name=":1">{{Cite book|title = Business to Business Marketing|last = Vitale|first = Robert|last2 = Giglierano|first2 = Joseph|publisher = South-Western publishing|year = 2002|isbn =|___location = Mason, Ohio|pages =}}</ref> The characteristics marketers are looking for are measurability, accessibility, sustainability and actionability.

* Measurability – The understanding of size, purchasing characteristics and value needs of a particular segment

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* Actionability – The capability of an organization to create a competitive advantage with its offering in the specific segment of the market<ref name=":1" />

There are two approaches to segmenting a market – a discovery approach or an analytic approach. Each approach is appropriate to the type of business and market they are approaching.<ref name=":2">{{Cite book|title = Marketing: Defined, Explained, Applied|last = Levens|first = Michael|publisher = Pearson Education Inc.|year = 2012|isbn =|___location = New Jersey|pages =}}</ref>

An analytic approach is a much more research and data based approach, where two sets of information are derived and used to segment the market.<ref name=":1" /> The two approaches give the business an idea for the future profitability of a segment, and the tendencies and behaviours it portrays. The first approach gives them an idea on the future growth of the segment, and whether its investment outcome is worthwhile. This, therefore, will usually be done in advance. The second approach is more based around the observation of the buying behaviours of the segment and is more based around primary research.<ref name=":1" />

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== Targeting ==

{{See|Target market}}

Targeting is a follow on process from segmentation, and is the process of actually determining the select markets and planning the advertising media used to make the segment appealing.<ref name=":2" /> Targeting is a changing environment. Traditional targeting practices of advertising through print and other media sources, has made way for a social media presence, leading a much more 'web-connected' focus.<ref>{{Cite book|title = Web Information Systems Engineering - WISE 2008|last = Jaworska|first = Joanna|last2 = Sydow|first2 = Marcin|publisher = Springer Berlin Heidelberg|year = 2008|isbn =|___location = Warszawa|pages = 62–76}}</ref> Behavioural targeting is a product of this change, and focuses on the optimization of online advertising and data collection to send a message to potential segments. This process is based around the collection of 'cookies', small pieces of information collected by a consumer's browser and sold to businesses to identify potential segments to appeal to.<ref name=":2" /> For example, someone consistently accessing photography based searches is likely to have advertisements for camera sales appear, due to the cookie information they deliver showing an interest in this area.<ref name=":3">{{Cite book|title = Behavioural Targeting: An Online Analysis for Efficient Media Planning?|last = Klever|first = Alice|publisher = Diplomica Verlag|year = 2009|isbn =|___location = Hamburg, Germany|pages =}}</ref> Whilst targeting a market, there are three different market coverage choices to consider – undifferentiated, differentiated and niche marketing.<ref name=":3" /> Choosing which targeting choice to pursue depends on the product or service being offered. Undifferentiated marketing is the best option to focus on the market as a whole and to promote products that have a wide target segment, whilst differentiated and niche marketing are more specialized and focus on smaller, more selective segments.<ref name=":3" />

== Positioning ==

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{{See|Positioning (marketing)}}

Positioning is the final stage in the 'STP' process and focuses on how the customer ultimately views your product or service in comparison to your competitors and is important in gaining a competitive advantage in the market.<ref name=":3" /> Therefore, customer perceptions have a huge impact on the brands positioning in the market. There are three types of positioning that are key in positioning the brand to a competitive advantage; these are functional positioning, symbolic positioning, and experiential positioning.<ref name=":3" /> Functional Positioning is focused on the aspects of the products or services that can fulfill consumers' needs or desires. Symbolic Positioning is based on the characteristics of the brand that fulfill customers' self-esteem. Experiential positioning is based around the characteristics of the brands that stimulate the sensory or emotional connection with the customers. A combination of the three is key to positioning the brand at a competitive advantage to its immediate competition.<ref name=":1" /> Overall, positioning should provide better value than competitors and communicate this differentiation in an effective way to the consumer.<ref>{{Cite book|title = Kotler on Marketing: How to create, win and dominate markets|last = Kotler|first = Philip|publisher = The Free Press|year = 1999|isbn =|___location = New York, United States|pages =}}</ref>

== B2C and B2B ==