MARKET TARGETING AND

STRATEGIC POSITIONING
Presented by:
Hamza Jameel
INTRODUCTION

 The strategic marketing planning process flows from a mission and vision
statement to the selection of target markets, and the formulation of
specific marketing mix and positioning objective for each product or
service the organization will offer.
 The market targeting decision identifies the people or organizations in a
product-market toward which an organization directs its positioning
strategy
 For example, should the organization attempt to serve all the people who
are willing and able to buy a particular good or service or, instead,
selectively focus on one or more subgroups? Study of the product-market,
its buyers, the organization’s capabilities and resources, and the structure of
competition are necessary in order to make this decision.
INTRODUCTION

 Targeting and positioning strategies consist of

 Identifying and analyzing the segments in a product-market,
 Deciding which segment(s) to target, and
 Designing and implementing a positioning strategy for each target.
Factors Influencing Targeting Decisions

 The factors that influence the choice of the targeting strategy include:
 Stage of product-market maturity.
 Industry structure.
 Capabilities and resources.
 Opportunities for competitive advantage.
Targeting in Different Market
Environments
 Emerging: Industries newly formed or re-formed are categorized as
emerging, created by factors such as a new technology, the changing
needs of buyers, and the identification of unmet needs by suppliers. The
digital camera industry is illustrative.
 Fragmented: Typically, a large number of relatively small firms make up the
fragmented industry. No company has a strong position regarding market
share or influence in this industry structure. Services like lawn care and
industrial chemical distribution are examples of fragmented industries.
Targeting in Different Market
Environments
 Transitional: These industries are shifting from rapid growth to maturity, as
represented by the life cycles of the products in the industry. Growing
rapidly until reaching high levels of household penetration, microwave
ovens are now in the maturity stage.
 Declining: This industry structure is not cyclical, where sales rise and fall over
time. Rather, a declining industry is actually fading away instead of
experiencing a temporary decline. Word processing led to the decline of
traditional typewriter producers.
 Global: Firms in this category compete on a global basis. Examples include
automobiles, consumer electronics, steel, and telecommunications. This
classification may involve traditional or declining industry market situations.
Targeting Alternatives

 Single-segment Concentration: In the simplest case, the company selects a

single segment. Through concentrated marketing, the firm gains a strong
knowledge of the segment’s needs and achieves a strong market position
in the segment.
 Selective Specialization: Here the firm selects a number of segments, each
objectively attractive and appropriate, given the firm’s objectives and
resources. There may be little or no synergy among the segments, but each
segment promises to be a money maker.
Targeting Alternatives

 Product Specialization: Here the firm concentrates on making a certain

product that it sells to several segments. An example would be a
microscope manufacturer that sells microscopes to university laboratories,
government laboratories, and commercial laboratories. The firm makes
different microscopes for these different customer groups, but does not
manufacture other instruments that laboratories might use.
 Market Specialization: Here the firm concentrates on serving many needs
of a particular customer group. An example would be a firm that sells an
assortment of products for university laboratories, including microscopes,
and chemical flasks. The firm gains a strong reputation for specializing in
serving this customer group and becomes a channel for all new products
that the customer group could feasibly use.
Targeting Alternatives

 Full Market Coverage: Here a firm attempts to serve all customer groups
with all the products that they might need. Only very large firms can
undertake a full market coverage strategy. Examples include IBM
(Computer market), General Motors (Vehicle market), and Coca-cola
(Drink market).
 Large firms can cover a whole market in two broad ways: through
undifferentiated marketing or differentiated marketing.
Targeting Alternatives

 Undifferentiated Marketing: Here, the firm ignores market-segment

differences and goes after the whole market with one market offer. It
focuses on buyers’ needs rather than differences among buyers.
 Differentiated Marketing: In differentiated marketing, the firm operates in
several market segments and designs different programs for each segment.
General Motors does this when it says that it produces a car for every
“purse, purpose, and personality”.
Strategic Positioning

 The final act in the target marketing process of segmentation and targeting
is positioning.
 ‘Positioning is the act of designing the company’s offering and image so
that they occupy a meaningful and distinct competitive position in the
target customers’ minds.
 Understanding how the mind receives, stores or rejects information will
improve the chances of making the positioning objective coincide with
actual positioning in the target audience.
Strategic Positioning

 Market segmentation and target marketing are prerequisites to successful

positioning. Generally, there are two main ways in which a brand can be
positioned: Functional and expressive (or symbolic).
 Both approaches make a promise, a promise to deliver a whiter, cleaner
and brighter soap powder (functional) or clothes that we are confident to
hang on the washing line (for all to see), dress our children in and send to
school and not feel guilty, or dress ourselves and complete a major business
deal (symbolic).
Developing and Managing a Position
To develop a position, managers should be guided by the following process:
1. Which positions are held by which competitors? This will almost certainly require
consumer research to determine attitudes and perceptions and possibly the key
attributes that consumers perceive as important. Use perceptual mapping.
2. From the above, will it be possible to determine which position, if any, is already
held by the focus brand?
3. From the information gathered so far, will it be possible to determine a
positioning strategy, that is, what is the desired position for the brand?
4. Is the strategy feasible in view of the competitors and any budgetary
constraints? A long-term perspective is required, as the selected position has to
be sustained.
5. Implement a programme to establish the desired position.
6. Monitor the perception held by consumers of the brand, and of their changing
tastes and requirements, on a regular basis.
Positioning Strategies

 Product Features: This is one of the easier concepts and one that is more
‘commonly adopted. The brand is set apart from the competition on the
basis of the attributes, features or benefit that the brand has relative to the
competition.
 Price/Quality: This strategy is more effectively managed than others
because price itself can be a strong communicator of quality. A high price
denotes high quality, just as a low price can deceive buyers into thinking a
product to be of low quality and poor value.
Positioning Strategies

 Use: By informing markets of when or how a product can be used, a

position can be created in the minds of the buyers.
 User: A sensible extension of the target marketing process is to position
openly so that the target user can be clearly identified. Flora margarine
was for men, and then it became ‘for all the family’.
 Competitor: For a long time, positioning oneself against a main competitor
was regarded as dangerous and to be avoided.
 Benefit: Positions can also be established by proclaiming the benefits that
usage confers on those who consume. Sensodyne toothpaste appeals to
all those who suffer from sensitive teeth,
Positioning Effectiveness

 The effectiveness of a marketing program strategy using specific criteria

such as market share and profitability is more straightforward than
evaluating competitive advantage.
 a successful positioning strategy should be evaluated on a regular basis to
identify shifting buyer preferences and changes in competitors’ strategies.
Positioning Effectiveness

Positioning errors include

 Underpositioning - when customers have only vague ideas about the
company and its products and do not perceive anything distinctive about
them.
 Overpositioning - when customers have too narrow an understanding of
the company, product, or brand.
 Confused positioning - when frequent changes and contradictory
messages confuse customers regarding the positioning of the brand.
 Doubtful positioning - when the claims made for the product or brand are
not regarded as credible by the customer.
 CONCLUSION

 Undertaking a Segmentation, Targeting and Positioning process is probably

one of the most important processes management should undertake both
at the onset of a new offer creation as well as part of a periodic revision of
the portfolio of offers and strategies used by the organization.
 Working in tandem, marketing analysts/researchers and business executives
can achieve effective Segmentation, Targeting and Positioning (STP)
strategies.