Requirements for Effective Segmentation, Product Positioning and its Process

Requirements for Effective Segmentation

There are certainly a variety of approaches to segment the market, but not all segmentations are successful and efficient. For instance, there are blond and brunette clients who purchase table salt. But the purchase of salt is unaffected by hair color. The business would not benefit from segmenting this market if every salt customer purchased the same quantity each month, had the view that all salt is identical, and was ready to pay the same price. For market segments to be more useful, they must include the following:

• Measurable: Measurements might be made of the segments' purchasing power, size, and profiles. There are several segmentation characteristics that are challenging to quantify. For instance, the number of left-handed people in the US is approximately 30.5 million, which is almost the same as the number of people in Canada. However, only a small percentage of the products are geared at this left-handed market. The segment's difficulty in measurement and identification may be the main issue.
• Accessible: The target market segments could be successfully reached and served. Imagine a fragrance company discovers that the majority of its customers are young, unmarried people who enjoy going out late and socializing more. It would be challenging to reach this group's members unless they reside, frequent certain locations for shopping, or consume particular media.
• Substantial: Market segments are either very large or very profitable. The largest homogeneous group that may be pursued with a customized marketing strategy is referred to as a segment. For instance, it won't be profitable for a car manufacturer to create cars just for persons who are taller than seven feet.
• Differentiable: Conceptually distinct from one another, the market segments react differently to various marketing mix programs and elements. Men and women do not make up separate categories if they react to soft drink advertising in a comparable way.
• Actionable: Effective programs could be created to appeal to and serve the target audiences.

One of the small airlines, for instance, identified seven market niches, but the team was too small to develop unique marketing strategies for each segment.

Differentiation and Positioning

The company must decide on its value proposition—how it will create distinct value for the market segments it will target and what positions it wants to hold within those segments—in addition to the market segments it will target. A product's position is essentially the way customers define it in terms of essential characteristics—the position it has in customers' thoughts in comparison to rival items. While brands are created in the imaginations of consumers, products are made in factories.

One of the potent all-purpose household detergents is Tide. The Nissan Versa and Honda Fit are positioned on the automotive market as being economical, Mercedes-Benz and Cadillac as being luxurious, and Porsche and BMW as being performance-oriented.

There is too much information available to consumers about goods and services. They were unable to continually review the things they were considering purchasing. Consumers categorize goods, services, and businesses into groups and "position" them in their minds to make the purchasing process easier. A product's position is the complex collection of customer views, impressions, and emotions about the product in comparison to rival offerings.

Sometimes consumers place products with the aid of marketers, and other times they do so on their own. But marketers do not want to rely on chance to determine where their items will be. They should build marketing mixes for establishing these targeted positions, and they should prepare positions that will provide their products the biggest benefit in certain target markets.

Positioning Maps

Marketers typically create perceptual positioning maps as they develop their differentiation and positioning strategies to highlight how consumers perceive their brands in comparison to rival items on key purchasing criteria.

Choosing a Differentiation and Positioning Strategy

For some businesses, selecting a differentiation and positioning strategy is simple. For instance, if there are enough customers looking for quality in a new segment, a corporation widely known for quality in other segments will pursue this position. However, it happens frequently that two or more businesses would compete for the same job. Each organization will then need to come up with new strategies to differentiate itself. Each business should differentiate its offering by creating a special package of benefits that appeals to a sizeable portion of the segment.

Communicating and Delivering the Chosen Position

The company will need to take more decisive action to deliver and communicate its selected viewpoint to its target audience after it has made a decision. The positioning strategy should be supported by the entirety of the company's marketing mix initiatives. Positioning the company requires more than simply talk—it also requires action. If the company chooses to take a stand for improved quality and service, it should first present that stance. Working out the tactical specifics of the positioning strategy is a requirement for designing the marketing mix, which consists of product, price, place, and promotion. Therefore, a business that pursues a more-for-more strategy is aware that it must manufacture high-quality goods, charge a high price, distribute through dealers of high caliber, and market through media of high caliber. It must grow sales and advertising campaigns that advertise its excellent service, hire and train more service personnel, locate retailers with a solid reputation for customer service, and hire additional service personnel. The only way to develop a consistent and convincing more-for-more position is in this manner.

A strong positioning plan is typically easier to develop for businesses than to put into practice. It typically takes a lot of time to establish a position or change one. Positions that have taken years to build, however, can be lost swiftly. An organization should take care to retain the desired position once it has been established by consistent performance and communication. It must keep a careful eye on the situation and adjust the position over time to take into account shifting customer preferences and aggressive competition. The company should stay away from sudden adjustments, though, as they could mislead customers.

Reference

Kotler, P., & Armstrong, G. (2013).Principles of Marketing.Chennai: Pearson India Education Services Pvt Ltd.

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