Market Segmentation Targeting Positioning Examples

The following article attempts to provide an answer to this prompt: 

“…positioning and segmentation are distinct parts of the strategy process and provide us with some extremely powerful tools; but ultimately they are linked by the central issue of focusing on satisfying customer’s needs in ways that are superior to competitors(Hooley et al, 2017 p159)

By reference to academic literature evaluate, and critique, the concepts of
Segmentation, Targeting & Positioning (STP) including a consideration of
implementation issues. With supporting evidence, use appropriate examples from different industries (plural) to exemplify how different organisations (plural) have applied STP, to demonstrate your learning and application of this topic. Indicate how any company could apply the concepts around STP, making generic recommendations for best practice.

Market Segmentation, Targeting & Positioning (STP) with Company Examples

Introduction

Ever increasing competition and greater demands by customers have rendered mass marketing virtually ineffective in several product categories (Harvard Business Review, 2006). As a consequence of the increasing competition and the rise of ever more demanding customers, producers are constantly seeking ways to differentiate their products and meet the specific needs of smaller customer groups. Today, it is a fact that coming up with a great product alone is not enough to achieve market success. Against this backdrop, companies need to apply strategic marketing. One of the strategic marketing tools that firms can use to their advantage towards achieving success in the market is segmentation, targeting and positioning (STP). Worth noting is that STP is as much a tool as it is a strategic approach and model used in marketing. STP is part of the process involved in coming up with a marketing strategy and summarises the market segmentation process. Hooley et al. (2012, p. 183) note that although positioning and segmentation are distinct parts of the [marketing] strategy, they are centrally linked by their focus on satisfying customers’ needs in a better way than competitors do. This paper discusses segmentation, targeting and positioning and illustrates the application of STP using different industry and company examples (with greater focus on car manufacturer, Volkswagen). The paper concludes with recommendations for companies with respect to the application of STP – market segmentation targeting and positioning examples.

Related article: Segmentation Targeting and Positioning Volkswagen

Market Segmentation

Market segmentation, according to William Stanton, is the process of dividing the heterogeneous market for a product into several sub-markets or segments, each of which tends to display homogeneity in all important aspects (Rudani, 2010; Tabavar n.d., p. 63). …  As noted above, segmentation is aimed at enabling the firm give proper attention to the needs of specific customers that collectively form a segment, thereby maximising consumer satisfaction and profits for the business (Bihani, 2004). A company’s market can be partitioned or divided based on different bases. Some of the bases commonly applied towards the segmentation of a market include demographic, behavioural, geographic, and psychographic characteristics (Anand, 2016). … A company such as cosmetics manufacturer L’Oréal applies demographic and psychographic segmentation in marketing its products. With regard to demographic segmentation, L’Oréal produces certain brands specifically for …. With respect to psychographic segmentation, L’Oréal produces different products that are targeted at different markets depending on …; there are products for general consumers and there are those for … consumers such as …. Continue reading  .

Other subtopics included in the article: Targeting, Segmentation, Application of STP by Volkswagen (VW), Recommendations for Companies. 

Related article: Segmentation Targeting and Positioning Volkswagen

Market Segmentation, Targeting & Positioning (STP) With Company Examples

Segmentation Targeting and Positioning Volkswagen

Segmentation, Targeting and Positioning by Volkswagen

Introduction

Many successful companies across the world apply segmentation, targeting and positioning (STP) as part of their marketing strategies. Volkswagen (VW), a company that makes cars is one of the successful companies that apply STP. Established in 1937, the company manufactures several car brands including Audi, Seat, Lamborghini, Skoda, Porshe, Scania, Man, Bentley, Bugatti, and Volkswagen (Volkswgen, 2018a; Bhasin, 2017; Volkswagen, 2018b). While its headquarter is in Wolfburg, Germany, the company has several branches and plants spread out in different parts of the world. This enables it to meet the needs of its global clientele, with the help of a robust distribution network. This paper briefly discusses segmentation and targeting before focusing on how Volkswagen has segmented its market, its target markets (segments), and how the brand is positioned.

Related Article: Market Segmentation, Targeting & Positioning (STP) with Company Examples

Segmentation and Targeting

Market segmentation, according to William Stanton, is the process of dividing the heterogeneous market for a product into several sub-markets or segments, each of which tends to display homogeneity in all important aspects (Rudani, 2010; Tabavar n.d., p. 63).  Philip Kotler, on the other hand, defines segmentation as the process of dividing a market into discrete groups of buyers based on factors such as needs or characteristics, behaviour, marketing mixes, or who might require different products (Rudani, 2010). A company’s market can be partitioned or divided based on different bases. Some of the bases commonly applied in segmenting a market are demographic, behavioural, geographic, and psychographic characteristics (Anand, 2016). …

Targeting, according to Bihani (2004), is the process of evaluating how attractive market segments are and choosing the segment(s) to enter. It involves making choices taking into consideration available and necessary resources. Firms have a number of options with regard to the targeting strategy to apply. …

Segmentation and Targeting by Volkswagen

Volkswagen applies segmented marketing and has its market partitioned based on a mix of psychographic, … and behavioural factors to meet the specific needs of different groups of customers. The following section discusses Volkswagen’s market segmentation based on these factors/bases.

Psychographic segmentation involves partitioning a market based on customers’ values, beliefs, interests, attitudes, lifestyles, personality traits, social status, or other psychographic factors. Volkswagen has partitioned its market based on customers’ interests, … and lifestyles. In this regard some of the segments the company targets include consumers who simply need mobility, … enthusiasts, and consumers who need … and comfort.  These will be discussed in the following paragraphs. …  

The compact or small cars that VW manufactures such as the beetle, polo, and golf are aimed at catering to the needs of consumers who simply need mobility or who simply wish to enjoy the utility value of a car … The cars targeted at these consumers are simple in design, …, and are cheaper to buy and maintain. …

Positioning of Volkswagen/ Volkswagen Brand Positioning

Market positioning, according to Wilkinson (2013), is the process of establishing the identity or image of a product or brand so that it is perceived in a certain way by consumers.With regard to positioning, Volkswagen takes pride in being a leader in … and to this extent uses the
tagline “….”. … Volkswagen mostly positions itself as … that produces … vehicles which attrac
t … compared to most car brands with more or less similar specifications. Whichever place the Volkswagen car is marketed, it is positioned as a vehicle that promises … 

Conclusion

Volkswagen segments its market based on a mix of psychographic, … factors to meet the specific needs of different groups of customers. With respect to psychographic segmentation, the company has segmented its market based on customers’ interests, … and lifestyles. …. The company applies … given that it has segmented its market based on how consumers intend to use vehicles. There are consumers who need vehicles for … use while others need them for …. use. Going by …., Volkswagen positions itself as a …. brand that produces … efficient vehicles.  Continue reading

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Related article: Market Segmentation, Targeting & Positioning (STP) with Company Examples

Outline
Introduction
Segmentation and Targeting
 – Segmentation and Targeting by Volkswagen
       – Psychographic Segmentation
       – Demographic Segmentation
       – Geographic Segmentation
       – Behavioural Segmentation
– Positioning of Volkswagen
– Conclusion
– References

Segmentation, Targeting and Positioning by Volkswagen

 

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