Exam 6: Market Segmentation, positioning, and the Value Proposition

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Student examples will vary. Depending on the product, their approach to marketing will vary also.
Segmenting involves breaking down large, heterogeneous, and diverse markets into manageable submarkets, or customer segments. For segmenting to be useful, a marketer must be able to reach these resulting submarkets with its message. One of the most common ways to approach this task is by analyzing consumption patterns and commitment levels (heavy users, nonusers, brand-loyal users, variety seekers or switchers, emergent consumers). Other methods that are used include demographic, geographic, geodemographic, psychographic, and benefit segmentation.
Targeting involves choosing the specific subgroup—the target segment—as the focal point of the marketing efforts. Often, the largest segment is not chosen as the target, but rather, it is the particular segment made up of certain individuals with similar interests, needs, or lifestyles that may have a certain need or desire for the product.
Positioning involves designing and representing a product so it will occupy a distinct and valuable space in the marketplace. Positioning strategy is created when a company selects key themes and concepts to feature regarding the product when communicating its distinctive qualities.

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Niche marketing is based on the premise that smaller is often better when selecting target segments.By definition,large segments are usually established segments that many companies have identified and targeted previously.However,these large segments may be poorly defined.Niche marketing involves identifying and serving a relatively small group of consumers who have a unique set of needs.Typically,these consumers are willing to pay a premium price to the firm that specializes in meeting those needs.The small size of a market niche often means it would not be profitable for more than one organization to serve it.Thus,when a firm identifies and develops products for market niches,the threat of competitors developing imitative products to attack the niches is reduced.