Segmentation, Targeting and Positioning

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Segmentation is a part of Strategic Marketing. It includes the following three:

1) Segmentation
2) Targeting and
3) Positioning
These STP (Segmentation, Targeting and Positioning) together are called Target Marketing.

Wendell smith has defined Market Segmentation as "the process of identifying subgroups of present and potential customers that respond to or are expected to respond to different marketing variables such as product benefits, features, pricing, promotion, distribution etc. differently." This is one of the widely accepted definitions of Segmentation.

Segmentation is dividing the market on the basis of homogeneity of their characteristics. If a company has to sell a product, it first needs to understand that who are the people to whom the product can be sold. For example, Johnson & Johnson had to identify the possible segments to which they could their soaps and shampoos. It could be Infants, Kids between 5-10 years age group, 10-15 years age group, teenagers, Adults, Old People. This is how segmentation is to be done.

Some people confuse it with Targeting. Segmentation is only dividing the market on the basis of similarity of characteristics. Targeting is to select a particular market segment to pursue. In the above example, Johnson & Johnson decided to select the infant segment and therefore this selection is called Targeting.

The segmentation can be broadly done on the bases of:

1) Geographic Segmentation - Dividing the market on the basis of different regions such as North America, Asia, Europe etc.)

2) Demographic Segmentation - Dividing the market on the basis of demographic characteristics such as age, occupation, income, education etc. It can be done on the basis of education such as Illiterate, Pass up to primary, secondary level, School, Graduate, Post Graduate, Post Graduate (Professional), Ph.D etc.

3) Psychographic Segmentation - Dividing the market on the ...