Contents

Contents......................................................................................................................................1
1.0 Introduction..........................................................................................................................2
2.0 Market segmentation............................................................................................................2
2.1 Characteristics of segments..............................................................................................3
3.0 Market targeting...................................................................................................................4
3.1 Merits of target marketing................................................................................................5
4.0 Product positioning..............................................................................................................5
5.0 Conclusion............................................................................................................................7
6.0 Bibliography.........................................................................................................................8

1.0 Introduction
The marketing concept is the idea of placing customer needs at the centre of the
organisations decision making. Key to the marketing is the Segmentation, Targeting and
Product positioning (STP) process starting with an understanding of the market. Markets are
predominantly complex as they consist of a variety of buyers with divergent motives and

backgrounds which lead to different needs and wants. Macro-environmental factors also take
their toll on the marketing environment as well as a mix of various levels of competition
which make markets heterogeneous. Demand patterns are constantly changing, innovations in
technology continue unabated and customers have become better-informed and educated.
This has led to the need for the STP process.

2.0 Market segmentation

Market segmentation is a two-step process of: (1) naming broad product-markets and (2)
segmenting these broad product-markets in order to select target markets and develop suitable
marketing mixes. The first step pertains to defining an organisations business. Varichems
business would be healthcare while that of that of Telecel Zimbabwe would be
communications.

Segmentation is the division of a market using a set of pre-determined criteria. It should be

used to gain insight into customer wants and needs. The end result should be segmentation
along the line of needs. An organisation will analyse the needs it can serve, those it cannot
serve and those it wants to serve. It is imperative for an organisation therefore to use the most
suitable variables for market segmentation. Common variables are examined below.

Geographic- these refer to the location and region of the world, continent or country. It
also includes descriptions such as rural, urban, suburban and central business districts.
Affects size of Target Markets (economic potential), Place (where products should be
made available), and Promotion (where and to whom to target advertising and personal

selling).
Demographic- the variables pertain to personal statistics such as gender, income, age,
education, occupation, ethnicity, religion, language and family size. Opaque beer,

Chibuku, by Delta Corporations was targeted towards the Shona-speaking while the

Ndebele had a different product targeted for them.

Psychographic- this seeks to segment on lifestyles, attitudes, personalities and values.
Delta Corporations, a beverage manufacturer, markets its lagers using this variable. The
Castle brand is targeted for the mature drinkers who appreciate the taste, Pilsener is meant
for executives and office holders, the decision makers while Lion is targeted at

graduates and low-earners.

Behaviour- loyalty to brands is also used to group similar individuals together. Affects
Product (features, packaging, product line assortment, branding) and Promotion (what
potential customers need and want to know about the firms offering, and what appeals
should be used). Brand loyal customers stick to their brand even in the face of competing
products. Usage occasions such as wedding gowns at weddings and benefits sought such
as lightening creams for ladies of colour are used as basis for segmentation.

2.1 Characteristics of segments

i. Measurable/identifiable- the individuals in each segment should be distinguishable
and easily identifiable.
ii. Accessible-the selected market targets should be reachable by the organisation
through individual marketing efforts.
iii. Meaningful-the chosen market segments should show clear variations in the
variables in question. Their behaviour and response to the individually-designed
marketing mixes should be distinct. The individuals in such groups should have
preferences or needs unique to them.
iv. Substantial-the variables used for segmentation should lead to sufficiently large
segments that are economically and practically worthwhile to serve as distinct
market segments with a distinctive marketing mix.

3.0 Market targeting

There are three basic ways to develop market-oriented strategies in a broad product-market.
1. The single target market approachsegmenting the market and picking one of the
homogeneous segments as the firms target market.
2. The multiple target market approachsegmenting the market and choosing two or more
segments, then treating each as a separate target market needing a different marketing mix.
3. The combined target market approachcombining two or more submarkets into one
larger target market as a basis for one strategy.

The choice on which segments to target is dependent upon several factors. The existing level
of competition and the quality of the competitions service to the customers must be borne in
mind. The larger the numbers of competition and the better they serve the customers, the
more difficult it is for other organisations to be successful in penetrating the market.
Secondly, the size of the segment as well as its growth rate determines the attractiveness it
poses to competition. Furthermore, the strength of the organisation seeking to enter a certain
segment should be sufficient to appeal particularly to the group of consumers. Organisations
serving the segment may already have established reputations making it challenging to
wrestle customers from them.
Market targeting is defined as the identification of the market segments that are identified as
being the most likely purchasers of a companys products.
3.1 Merits of target marketing
i. It allows for the accurate appraisal and identification of unfilled marketing
opportunities. The gaps can be real or illusionary. Econet Wireless, a
telecommunications organisation in Zimbabwe, successfully targeted the unbanked
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community who want banking convenience with the Ecocash service, a mobile
banking platform.
ii. Market product appeals through marketing mix manipulation can be more delicately
aligned to the customer needs.
iii. An organisation can concentrate on a market segment which offers the greatest
potential for the company to reach its goals.

4.0 Product positioning

Positioning refers to how customers think about proposed and/or present brands in a market.
Following successful market segmentation and targeting, the next step in developing an
effective marketing strategy is product positioning. Product positioning refers to the way, in
which an organisation sets itself apart in the market, including how the market perceives its
products. Successful competition in a target market requires taking one of porters three
generic strategies- cost leadership, differentiation or focus.

Positioning is about communicating the overall value proposition or unique selling

proposition to the market. Ries and Trout (1981) suggest that it is the perceived image and
attributes of an organisation or product which is important in the battle for the minds of the
target customers. There are three categories of positioning expanded below:
a) Functional positioning-this seeks to provide benefits to customers and get a favourable
perception from investors and lenders. These are goods or services which solve problems
or challenges encountered by customers such as stain removal using detergents. Liquid
soap manufacturers such as Sunlight market along these lines.
b) Symbolic positioning-these lead to self-image enhancement and support ego
identification. The products create a sense of belongingness and social meaningfulness.
Harley Davidson bikers are an example of this kind of target segment of a market.
c) Experiential positions- this positioning is about sensory and cognitive stimulation.
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Jobber (1995) proposed the 4C positioning framework for success in a market which is about
clarity, consistency, credibility and competitiveness. The basis of the competitive advantage
must be clear to the organisation so that can fully exploit and develop it. Creating a lasting
and impression in the minds of customers requires that the message and images send should
be consistent. The targeted segment should believe in the credibility of the position chosen by
the organisation. It is imperative for the organisation to hope of any success if they have a
distinctive value proposition. There are three essential types of value: operational excellence,
product leadership and customer intimacy.

5.0 Conclusion
The selection of a target market involves assessing the organisations strengths, the
competitive intensity of the target market, the cost of capturing market share, and the
potential financial gain in attracting the targeted group. The market segmentation concept is
related to product differentiation. An organisation seeking to target different market segments
may adapt different variations of its products to satisfy those segments. This would appeal to
different market segments with an increasing propagation of tastes and increasing disposable
incomes in some segments. This has led to marketers designing product and service offerings
around consumer demand rather than production needs.

Segmenting a market requires the analysis of data based on consumer, user, organisation, and
market characteristics. This data is on key customer-, product-, or situation variables. Four

separate approaches are available for target marketing. These are undifferentiated (entire
market with one strategy), differentiated (different strategies for different segments),
concentrated or niche (selecting one segment to target), and customised target marketing
(target individual customers with individual strategies).
Product positioning is the means through which differentiation is realised. It entails two
elements. The first elements is about physical attributes, functionality and capability offered
by a brand such as an HP printers specifications, design and throughput. The second element
concerns the brand perception from the customers perspective. ZESA, an electricity supply
para-statal in Zimbabwe is perceived as being corrupt and inefficient. Marketing has become
a strategic concern for competitors in the business world.

6.0 Bibliography
1. Ries, A. and Trout,J. (1981) Positioning, The battle for your mind, Warner Books McGraw-Hill Inc., New York, 1981, ISBN 0-446-34794-9
2. Jobber, David. (1995). Principles and practice of marketing. McGraw-Hill, London
and New York, ISBN 007079353