[Marketing 101] – Segmenting, Targeting and Positioning

Every now and then, someone asks me: “How do I create a market for my product?

The answer is simple. “You don’t.”

Many people who get into product development want to develop products on their own terms. They don’t want to consider the needs of the end user; they want to develop the product first and then convince the end user that he or she needs the product. This approach requires a heavy amount of selling, and often results in customers developing postpurchase dissonance — they buy because they’re sold to, and they wind up dissatisfied with the product in the end because it doesn’t solve their problem.

And that’s not marketing… or, I should say, that’s not effective marketing. Good marketing involves finding a need that already exists and then finding a way to fill it. That means listening to customers from day one. That means shaping ideas to fit the desires of the end user. That means refining designs instead of rushing them to market.

All of which can be accomplished by using STP — Segmenting, Targeting and Positioning.

Segmenting is the process of looking at the entire marketplace and breaking it down into smaller pieces. There are many ways to segment, all with advantages and disadvantages over other methods. But the method that works best for a small publishing company generally involves performing some basic market research, isolating the desired segment and examining similar segments to see if they’re viable as well.

Segments can be divided out by any manner of demographic information — income, age, education, geography, size of household, gender, and so forth. Often, these segments are given representative names, like “Bookworm Brooke” or “Do-it-Yourself Don” or “Casual Reader Ron.” The idea of these names is to help the marketers easily remember the characteristics of the customers they’re going after.

The market research firm Claritas has broken the entire US population into 67 unique segments, which you can read more about either via zip code or by individual segment. If you don’t have a lot of money for market research, using these Claritas PRIZM segments might not be a bad idea to begin to shape your survey of the marketplace.

Targeting is the process of deciding which segment(s) you’re going to focus your marketing efforts upon. Keep in mind, when I say “marketing,” I’m not referring to just sales and advertising, but the entire marketing mix you’re going to put into place – product, price, promotion, and distribution strategies. As you target segments, you’re going to develop your marketing mix and tailor it to target your chosen segment(s).

You can target more than one segment, but I would suggest starting with one and expanding your efforts to other segments down the road. For one thing, it will make your marketing communication a lot easier to do. For another thing, it will make you think about your customers in much more specific terms, and you won’t get confused about what those customers want. The fewer segments, the better.

Positioning is the process of adjusting your marketing mix so that you are reaching your desired segment. Think of it as making changes in the physical position of the product in a store so that it’s more attractive to the customer, like turning it to face the way they’re walking, setting it at eye level, building an impact display or displaying it on an endcap. The positioning process is all about making tweaks to the way you’re presenting your product from the communication perspective so that you’re capturing the minds of your targeted segment.

Let’s use a publishing example to go through the STP process. Say I’m writing a book about scottish terriers. First, I look at the marketplace and segment it — first, I split it into people who like dogs and people who don’t, and then I segment between people who are looking for reference books and people who are looking for casual reading, and then I segment between children and adults, and so forth.

Next, I focus on targeting that segment with my product. I’ll start by examining the segments and seeing where there is a need. I’ll also examine which needs I can realistically fill with products I can develop. Eventually, I decide that the segment I want to go after are children who are interested in dogs, and who might want to learn more about scottish terriers.

Finally, I’ll need to position my product. Clearly, I’ll need to adjust the words I use, and provide plenty of pictures in my content. A paperback black and white book won’t be appropriate; I’ll need something a little larger, and in full color, to suit the needs of my users. I’ll also need to consider the style of my book — should it be cartoonish, or should it feature photographs? How will I promote this book to reach the kids? How much should it cost? These are all important questions, and I’ll need to make sure I address them with my marketing mix.

And that’s STP! It’s a simple process, and quite intuitive. But like most tools in marketing, it’s a process that’s designed to keep businesses thinking in the right progression so that they don’t develop a product before considering the market for it.

On a final note, if you’re finding yourself saying, “I don’t need to do this. I know the marketplace,” I’d encourage you to give it a try anyhow. You might be surprised at how little you actually know… and how much STP can help you out.

Writing Scraps

by Sean J. Jordan