Understanding Segmentation, Targeting, Differentiation, and Positioning Process

This article provides a simple overview of the segmentation, targeting, differentiation and positioning process in marketing – which is a fundamental component in any marketing strategy.

Introduction to Market Segmentation

Market segmentation is an approach that divides a broad target market into separate groups of consumers who have similar interests and needs. Each group has unique characteristics, but all are part of the same class.

In terms of the consumer market, these groups could be defined by:

  • Demographic Factors: Age, gender, income, education, etc.
  • Geographic Factors: Different regions, countries, cities, or neighborhoods.
  • Psychographic Factors: Lifestyles, attitudes, values, etc.
  • Behavioral Factors: Consumer behavior towards products, brand loyalty, etc.

The Role of Market Segmentation

Enhanced Customer Focus

Market segmentation helps businesses focus their resources on subsets of customers who are most likely to purchase their products or use their services. This can help the effectiveness of marketing campaigns.

Customized Marketing Strategies

By understanding the unique needs and behaviors of segmented groups, businesses can tailor marketing strategies to resonate more powerfully with each group.

Increased Competitive Advantage

Market segmentation can provide key insights into how to better serve customers and outperform competition.

Example of Market Segmentation

Let’s say we have a sportswear company. If the company aims to launch a new product, market segmentation can help identify the most appropriate target group.

The segment could be ‘teen athletes’, ‘professional athletes’, ‘casual gym-goers’, etc. By identifying these segments, the company can effectively target their promotions and develop products that meet the various specific needs of these groups.

Illustration of people representing different market segments, coming together to form a colorful puzzle representing the concept of market segmentation.

What is Targeting?

Following market segmentation, we will need to select one or more target markets.

Ideally, we ALWAYS want to match our product or service to the needs and wants of a particular market segment.

Advantages of Targeting

More Effective Messaging

By concentrating on a defined audience, you’re speaking your customer’s language. Your message is tailored, specific, more likely to hit home, and generate a response.

Resource Optimization

Resources, whether time, money, or manpower, are finite. Targeting helps utilize these wisely and provides a better return on investment. By directing efforts onto a priority segment, there’s less waste and more results.

Better Customer Relationships

Targeting can lead to stronger, more long-lasting relationships with your customers. How? By showing you know and understand their needs. This creates trust which then fosters loyalty.

Improved Consumer Understanding 

As we know in marketing, understanding the needs and wants of your target markets is critical. These insights will help guide all marketing strategy decisions and the construction of the marketing mix.

Image of a target with marketing concepts written around it.


Differentiation involves distinguishing a product or service from others to make it more attractive to a specific target market. A well-differentiated product is more likely to resonate with the target market, resulting in higher customer retention and loyalty.

The differentiation could be attributed to various factors like design, quality, price point, customer service, or any other critical aspect that the target audience perceives as valuable.

Many successful businesses tie their differentiation to solving a problem more efficiently, offering it in a unique way, or delivering a higher level of service.

Role of Differentiation in Building ‘Brand Personality’

“Brand Personality” is the set of human characteristics associated with a brand or product.

Clearly defined differences and strengths allow a product to stand out and build its own personality. Differentiation strategies directly contribute to shaping this personality. Just as humans have unique traits, products, through differentiation, develop their individual ‘personalities’ that attract specific consumer sections.

What are some examples in practice?

  1. Design differentiation: For instance, Apple’s minimalist yet sophisticated design gives their products a premium, high-end personality.
  2. Quality differentiation: Mercedes cars, known for their superior and lasting quality, carry a personality of durability and luxury.
  3. Price differentiation: Brands like Zara manage to deliver trendy fashion at cost-effective prices, giving them a ‘fast-fashion’ personality.
  4. Service differentiation: Exceptional customer service offered by companies like Amazon contribute to a ‘customer-friendly’ product personality.

A group of diverse products on a shelf, symbolizing product differentiation and variety in the market.

Photo by spacejoy on Unsplash

Positioning for Market Success

Positioning entails creating a distinctive place within the mind of the consumer for a product or brand.

It is a powerful tool that marketers use to make their product stand out from the crowd in a way that is meaningful to customers. This is not necessarily about making the product different, but about influencing consumer perception to see it as different, unique, and valuable.

The Connection Between Positioning and Consumer Perception

How does positioning shape consumer perception? Well, positioning directs the design, price, promotion, and distribution strategies marketers apply to foster particular product or brand images. These strategies significantly influence a consumer’s perception of products or brands compared to their competitors.

Specifically, consumers use their perceptions formed by these strategies to compare and evaluate products in terms of their relevance and value.

The Process of Positioning

Various steps are involved:

  • Identifying the target market: Based on segmentation, identify whom the product/brand is meant for.
  • Understanding consumer needs and motivations: Learn what drives your target market to buy and what they value.
  • Analyze competitors: Understand your competitors’ strengths and weaknesses and how consumers perceive them.
  • Develop and communicate a unique selling proposition (USP): Formulate a message about what makes your product different and valuable, then communicate it effectively to consumers.
The Value of Effective Positioning

Effective positioning is known to:

  1. Facilitate differentiation: Well-implemented positioning strategies differentiate a product/brand by shaping a unique image in the consumer’s mind.
  2. Ensure competitive advantage: Positioning allows a product/brand to gain a competitive edge over rivals by appearing more attractive to the consumer.
  3. Boost brand loyalty: When a product/brand efficiently fulfills the needs and expectations of consumers, they tend to stick around, increasing brand loyalty.
  4. Enhance customer understanding and satisfaction: Positioning clarifies to consumers what they are buying and the value they are receiving, heightening satisfaction levels.

Remember, the goal is not simply to differentiate your product or brand, but to position it in a way that makes it appear as the most attractive, most relevant, and most reliable option in the eyes of the target consumers. 

An image of a person holding a magnifying glass, symbolizing the concept of 'positioning' in marketing.

Photo by stevenwright on Unsplash

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