Marketing terms Simplified.......

We have been hearing the terms Market Segmentation, Targeting and Positioning quite often during the MBA course. However I was often looking for a simplistic manner in which these terms could be explained. While reading the book on Consumer Behaviour by Schiffman and Kanuk I was happy to learn these terms in there simplest form. Lets go through the definitions once more

Market Segmentation: It is the process of dividing a market into subsets of consumers with common needs or characteristics. Because most companies have limited resources, few companies can pursue all of the market segments identified and hence we come to the second term -Targeting.

Market Targeting: It is the selection of one or more of the segments identified for the company to pursue.

Positioning: It refers to the development of a distinct image for the product or service in the mind of the consumer, an image that will differentiate the offering from competing ones and squarely communicate to the target audience that the particular product or service will fulfill their needs better than competing brands. Successful positioning centers around two key principles: First, communicating the benefits that the product will provide rather than the product features. As one marketing sage pointed out:".....consumers do not buy drill bits- they buy ways to make holes". Second, because there are many similar products in the marketplace, an effective positioning strategy must develop and communicate a Unique selling proposition- a distinct benefit or point of difference. USP is also called "Value Proposition" in today's marketing world.

Although after reading this it may sound very obvious about the way these terms are defined however the reality is; it is still one of the major challenges for any marketer to segment the market and target a particular segment with a specific USP.