elements of marketing strategy

Segmentation is dividing customers according to "distinct characteristics, needs or behaviors.". This is distinct from targeting, which takes those segments and then seeks to determine how valuable each segment is to the business. So the targets are roughly the segments, put into order of attractiveness. Positioning is how the product's messaging will position the product for each segment. What this really means is finding the messaging that will appeal to each target market, based on its needs and behaviors, as identified during the segmentation process.

Dolan notes that there are several different common segmentation variables (p.12). There are demographic variables, such as age, income, education level, ethnicity and gender. It is important for marketers to know whether their product appeals to specific demographics or whether it has a broad-based appeal.

Another form of segmentation is geographic, wherein the location of the customer matters. Again, some companies are only operating in specific geographies -- for example if you do not have labeling to sell in a certain country, you wouldn't sell there.

There are psychographic considerations, which are lifestyle and value-oriented. The marketing of athletic apparel companies -- whether Nike or lululemon -- reveals a focus on particular lifestyle factors that drive the branding of those firms.

Benefits are another means of segmenting the market. In some cases, there is really only one benefit and it does not matter who the person is, you just want to reach people who need that benefit. In other cases, a product might have two completely different benefits. Think of something like baking soda, that has a few different uses. The best way to understand that market is to know how many people buy for each use.

Usage is deemed different from benefit, though that makes little sense. You use things to get a specific benefit, so I'm not sold on this one, but it's on the sheet.

3. There are different ways to determine which segment to target. First, you can target based on how many people in the segment are using the product -- you know there is a market so you focus on that. But it is also possible to target, for example, something that is underserved. You can determine that if consumers in New York really like Product A, maybe you can start to market Product A in Philadelphia, too. This depends on strategic goals -- how does the company intend to grow, and does this growth involve driving more business from existing markets or seeking out new markets. There are usually a number of different considerations that go into such a decision.

4. Positioning is important to marketing strategy. One of the reasons is simply that positioning helps to guide the different marketing decisions. It certainly influences pricing, because pricing conveys positioning to the end user. Same thing with the choice of distribution channels. Furthermore, positioning will help to define the messaging -- how will the company reach the target market, and what will the company say to the target market. So positioning actually drives a lot of the ground-level, functional marketing decisions that the company will make, which means that positioning is an integral part of marketing strategy.

5 Positioning is the result of determining the markets that the company wants to target, and aligning those with the segmentation work that has been done. In other words, you figure out who you want to sell to, and what those people are looking for. Then you position the product in such a way that will specifically appeal to those people, telling them that your product can meet these needs that you have identified the target as having. The positioning statement is intended to lend clarity to the entire organization, and to the market, about what your product is, who you target, and what benefits to intend to convey to that target.

6. Companies can differentiate through effective positioning in two ways. First, there is positioning away from competitors, to create space so that your product is unique. Second, there is positioning to meet specific needs that customers are not meeting at present. An example of the former is the way that, say, an insurance company positions itself as caring or some similar messaging. Insurance tends to be an undifferentiated product, but some insurance companies do focus on the human side of insurance (while others may focus more on low cost positioning, for example). This is a deliberate decision to appeal to a certain segment of the market. An example of the latter could be something like when Starbucks started, and positioned itself as a "third space," a casual hangout sort of place. This was a unique proposition until it was emulated by competitors, basically selling more than just coffee and snacks, in an industry where everybody else was just selling coffee and snacks. To sell the space was a big change and a driver of Starbucks' rapid growth.