■ Introduction
At a fundamental level, marketing strategy is about markets and products.
Organisations are primarily making decisions about which markets to
operate in and which products/services to offer to those markets. Once
those essential decisions have been taken the company then has to decide
on what basis it is going to compete in that chosen market. Segmentation
is therefore at the heart of strategic marketing decision making. In essence it
is a strategic rather than an operational issue and has to be treated as such.
Initially any organisation has to identify how it can, in general, gain
competitive advantage. The stage that we will now explore is concerned
with creating a specific competitive position. The first crucial step is to
decide in which specific market segments to operate. Chapter 5 examined
the criteria that can be used to identify discreet segments within a market.
Once segments have been identified they then have to be evaluated in
order that an organisation can decide which particular segments it should
serve. Target marketing, or targeting, is the common term for this process.
Once target markets have chosen an organisation, then it has to decide
how it wishes to compete. What differential advantage can it create that
will allow the companies product or service to hold a distinctive place in
the chosen market segment. This process is normally called positioning.
Targeting and positioning are critical processes that require the attention
of senior management.
■ Evaluating market segments
To effectively evaluate different market segments it is necessary to system-
atically review two issues: the market attractiveness of the competing seg-
ments and the organisation’s comparative ability to address the needs of
that segment. There are a number of criteria that can be used to judge the
attractiveness of a market segment. These fall under three broad headings:
market factors, the nature of competition and the wider environmental
factors. At this point it is important to stress that marketers need to recog-
nise that many of the criteria that can be used to evaluate the attractiveness
The subject of targeting and positioning builds on the segmentation techniques that were covered
in Chapter 5. This chapter now explores criteria by which the attractiveness of a market
segment can be judged. The targeting process is then examined before a discussion on a range
of product positioning techniques is undertaken. Central to this discussion is the issue of