Marketing Communications

THE SEGMENTING–TARGETING–POSITIONING FRAMEWORK 121

Introduction

Th e fi rst step in the strategic marketing planning process is the study of market needs, a situation

analysis of current and future market conditions. Th is can be done by using SWOT analysis ,

which consists of an internal analysis – strengths and weaknesses of the company or brand –

and an external analysis – opportunities and threats in the marketplace. Th is analysis leads to

opportunities for existing product lines in new or existing markets, or new product ideas for

new or current markets. In most circumstances a market has diff erent groups of customers

or prospects with diff erent needs and subject to diff erent trends. Identifying these diff erent

groups and deciding at which group(s) to target the marketing and communications eff orts is

a major task of communications planning. Companies can defi ne target markets in a number of

ways, based on multiple criteria. Segmenting a market, deciding on target groups or segments to

focus on and establishing a position to defend vis-à-vis these target groups are at the same time

vital components of the strategic marketing plan and basic cornerstones of a communications

strategy. Understanding buying motives and behaviour of target groups is an essential element

of this groundwork and requires thorough preliminary analysis. Th e choice of well-defi ned

target groups and positioning decisions should, later in the communications planning, be

refl ected in the selection of communications objectives, communications instruments, campaign

execution and media planning.

The segmenting–targeting–positioning framework

Table 4.1 lists the various steps in the segmenting–targeting–positioning (STP) process. Th e

STP exercise starts with a defi nition of potentially relevant factors on the basis of which a

market can be segmented. Market segmentation should ideally lead to more homogeneous

sub-groups in that the members of one group should react in the same way to marketing

stimuli and diff er in their reactions to these stimuli from the members of other segments. In

other words, it is not suffi cient for men and women to be physiologically diff erent. If there is

no systematic diff erence between the two groups in the way they react to marketing stimuli,

there is no sound reason to distinguish between them. For example, the furniture market

includes diff erent segments such as home and business markets. Th ese segments can be further

divided: home markets include student home furniture, design furniture, classic furniture,

etc.; business markets include, for instance, offi ce furniture (for small/large companies), hotel

furniture, etc.

In stage 2 of the STP process, segmentation variables can be combined to form segmentation

profi les. In fact, by combining segmentation variables, multivariate segmentation takes place.

Various analytical techniques, such as cluster analysis, conjoint analysis, multidimensional

scaling and automatic interaction detection, are being used to identify segments on the basis

of multiple variables.^1 Once segment profi les have been identifi ed, their attractiveness can be

assessed. Segment attractiveness will depend on the size and predicted evolution of sales,

buying power and the amount of competition targeted at the same segment.

Table 4.1 Segmenting, targeting and positioning

1. Definition of segmentation criteria


2. Definition of segment profiles


3. Assessment of the attractiveness of segments


4. Selection of target groups


5. Definition of the desired unique position in the mind of targeted consumers

M04_PELS3221_05_SE_C04.indd 121M04_PELS3221_05_SE_C04.indd 121 6/5/13 3:00 PM6/5/13 3:00 PM