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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.
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
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
4
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.
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