Segmentation, targeting and positioning

Segmentation, targeting and positioning is a key marketing process which helps you identify and prioritise customers groups within the total market. It guides you to make decisions on how your brand sets itself up to connect with the needs of consumers. The outcome of the process is a positioning statement which informs your brand identity and all your marketing activities. 

Segmentation, targeting and positioning

How this guide raises your game

  1. Learn the three main types of segmentation and the pros and cons of each
  2. Understand key steps to identify market attractiveness as part of targeting
  3. Learn how to build a brand positioning statement

No matter how developed your brand is, the process of segmentation, targeting and positioning can help you find the most attractive customer groups. And if you know the most attractive groups, then you increase the chances of selling more overall by focussing on those groups. 

But before we go over how the segmentation, targeting and positioning process works, we also need to be clear on why this process is done. 

 

Segmentation, targeting, positioning - pizza shop example

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The Reason to Believe can be based on 



Which of these factors make a target market more attractive?


Your brand’s point of difference in the positioning statement is based on …

What are the three main types of variable used to segment markets?

The advantage of a broader frame of reference is that it …


Segmentation, targeting and positioning in the brand development process

Segmentation, targeting and positioning is the third and clearly central step in the brand development process

In the first two steps, you have taken an external view of the market when you analysed your market and you have defined your brand goal

But now, you start on the process to more clearly define HOW you will capitalise on the opportunity. And HOW you will achieve your goal. 

This requires you to start to narrow down the focus of your attention. You need to identify more specific opportunities. You need to define what your brand will stand for so it can achieve its goal. 

Segmentation, targeting and positioning is the process which moves you to this point. It moves you from intent to decision-making. It sets the framework for your brand identity and your brand activation

The brand development process

Why carry out segmentation, targeting and positioning?

Like the famous quote, you can’t please all of the people all of the time. In any category or industry, you will have a range of different types of consumers.

These consumers might be different ages and live in different locations. They might consume the product in very different ways or at different times. And they will have different needs, wants and preferences which also drive their product choice.

When you group consumers together based on shared attributes (segmentation), it allows you to develop more specific and relevant products, brand activity and communications for those specific needs.

The more specific and relevant a consumer feels a product is to them, the more likely they are to choose it over a more generic product designed to appeal to everyone.

It’s a fundamental piece of marketing thinking.

Your ability to convince a consumer to buy your product is much higher when you talk to a specific need they have. 

Segmentation helps you manage resources

But it’s not just increasing your chances of a sale.

It’s also about helping you manage the resources you have available most efficiently and effectively.

The majority of businesses have a finite amount of budget and resources to put behind their marketing. Marketing investment like product development costs, advertising spend and price promotions need to be managed wisely.

When you segment a market, you are able to dedicate your limited resources against specific groups rather than spread your resources over the whole market.

This approach consistently delivers a stronger ROI on the marketing investment. It creates both efficiency and effectiveness in the marketing investment, since reduce a lost of wasted investment when you choose NOT to spend money against segments who will deliver the least amount of return.

So why you do segmentation, targeting and positioning is to increase the chances of selling more and reduce the costs associated in doing so. It’s a persuasive argument and why successful brands regularly follow this process.

Let’s look at how it’s done.

The segmentation, targeting and positioning process

The process of segmentation, targeting and positioning is well documented in marketing textbooks. It was most famously popularised in the marketing textbook Marketing Management by Philip Kotler. There are much more detailed texts on the process available, but we like to keep our view simple. 

For is, the process is at the highest level, these three actions. 

Segmentation : divide the total market into manageable groups

Targeting : identify which groups offer the best chance of success

Positioning : build your brand to best meet their needs (and be able to prove it) 

3 steps of the process - Segmentation - divide the total marketing, targeting - pick the most attractive, positioning - build your brand

Segmentation

As we’ve already stated, consumers in your category will differ from each other and have different needs.

Segmentation is the process to identify the different attributes, behaviours and needs of the whole market. The aim is to group consumers together who share similarities across one or more of those variables. 

These characteristics of each group need to be distinctly different and make that group identifiable from other groups. 

In bigger companies, a segmentation project would normally be carried out with the support of a research agency (generally one able to do both qualitative and quantitative research). But even smaller businesses with less resources can benefit from segmentation. 

There are at a simple level, three different ways that markets can be segmented. Based on demographics, based on occasions or behaviours and based on needs or attitudes.

More advanced segmentations can combine elements of each of these together. But most segmentations start with the choice of one these these three ways to group segments.

Demographic segmentation

Demographic information is information based on the statistical study of a population.

Think about demographics as the type of data that is captured by governments and census-type surveys.

Age, gender, racial origin, income levels, education, family situation and nationality are common  demographic segmentation variables.

This is the simplest form of segmentation because it is based on how people are.

And that’s easy for most people to understand. 

It is a good place to start with segmentation, especially if you are a smaller or new business. 

Advantages of demographic segmentation

The major advantage of demographic segmentation is that it clearly and visibly defines a group.

It’s easy to visualise and identify demographic groups like “men under 30” or “families in Sydney suburbs with teenage children”. 

Demographic groups are often used when media planning and buying.

Media companies will have data on audience demographics so you can match it to your segments.

They will know that certain groups of people watch certain TV shows, pass certain locations or visit certain websites. They sell their media space around this information so you can match segments to where they will consume media.

That’s why for example you’ll see premium car advertising in drama shows since these tend to attract more upmarket audiences.

It’s why you’ll see beer adverts during sporting events, because more men than women drink beer and more men than women watch sports.

When you start to look more closely at advertising, you can quite often tell by the placement of the ad, which type of consumer or segment the advertiser is looking for.

Many people walking on a station concourse to highlight the visibility of demographic segmentation

Disadvantages of demographic segmentation

However, demographics alone can be very broad way of grouping consumers together.

And it may not always be an accurate predictor of behaviour.

Let’s say you are a beer brand manager. Your product is premium-priced and brewed in a craft brewery.

You might define your segment as “men under 30 in Sydney” for example.

But do all men under 30 in Sydney like craft beer? Do they all go to the same type of bars? Can they all afford to pay a premium price? Do they all have similar taste preferences? What about the packaging, do they all like the same sorts of colours?

As the answer to the above types of questions is likely to be “no”, you soon start to see that demographic segmentation has it’s limits when you look for it as a determiner of brand choice. 

Demographic segmentation has its uses.

But unless it is all you have available, you would usually require a deeper level of understanding of why consumers behave or think they way they do.

Occasion based segmentation 

This is a segmentation based on some sort of behaviour or time. Rather than being based on how people are, it’s based on what people do. 

How much of a product do people consume? When do they consume it? How often do they consume it? Where do they consume it? These are some of the common questions which underpin an occasion based segmentation. 

An occasion-based segmentation for a restaurant for example could be based on different booking behaviours.

Some customers might prefer to book online with an app vs those who prefer to call vs those who just show up.

For a manufacturer, an occasion-based segmentation could be between how people respond to particular vouchers or coupons.

Some groups will hoover up any offer going while others might not care so much, and this type of grouping can help businesses target promotions only to those for whom it will have the biggest impact. 

When occasions are based on time, It could be based on time of day or days of the week.

People who eat out for mid-day lunches might will be a different audience from those eating out on a  weekend night. What and how you eat at breakfast vs dinner is quite different.

In some categories, the segmentation might be based on the stage in the consumers journey. Women in pregnancy vs women who have already had a baby for example. 

With occasion-based segmentation , the focus is more on the consumption situation than the person themselves. This brings both advantages and challenges versus demographic segmentation. 

8 coffee cups each with a different type of coffee to highlight occasion based segmentation

Occasion-based segmentation better at predicting choice

Occasion-based segmentation is usually a better predictor of brand choice than demographics because it is based on actual measured behaviour.

And that behaviour gives a richer picture of how products might be consumed.

But also more of a challenge to find segments

It can be more of a challenge though to find the consumers who sit behind an occasion-based segmentation.

Time-based examples are a little easier, as you could target your advertising to time of day or day of the week to make it more likely to hit the right consumers.

But behavioural identification is more of a challenge.

How would know which consumers will eat at certain times, or choose to take up promotions for example?

In these cases, you generally need to capture data about these behaviours as they happen, and then look for insights to apply to future activities against consumers or segments.

Needs or attitudes based segmentation

This type of market segmentation tries to get more under the skin of consumers.

It takes a more psychological view of what makes a consumer choose a particular type of product.

It attempts to identify needs, attitudes and motivation as to why consumers act and choose they way they do.

Are they safety conscious or risk-takers? Are they driven by indulgence or healthiness? Do they value convenience or value? 

Research agencies love this type of research.

It often results in the creation of a bunch of ‘personas’ to describe each segment. “Anxious Anne” and “Risky Rachel” and so on. These personas paint a picture of each segment of consumer based on their underlying motivations. 

These types of segmentation can be really helpful when you try to craft relevant messages as part of your communication plan. 

Pain point

However, they are also the most difficult to identify when it comes to media buying.

They are also typically the most expensive pieces of research to generate.

They generally require qualitative research to understand the needs and quantitative research to quantify the size of the segments. And it can be difficult to identify groups based on these variables. 

Combining segmentation types

In an ideal world, you would be able to manage a combination of all three types of segmentation. You’d take the best bits of each type. The simplicity of demographics. The behaviour driven nature of occasion. And the psychological insight from needs based segmentation. 

But in reality, it’s rare you would have access to all three types of segmentation data. 

So if you are new to segmentation, we recommend you start with demographics as the most simple approach.

Occasion and needs-based segmentation can be added when you get more confident in your understanding of your audience.

The easiest way to think about segmentation is to image your whole audience as a pie chart. like a pizza. You are essentially trying to split the pizza into wedges or segments that are easier for you to manage.

Let’s imagine, we ran a pizza shop.

Our segmentation might be people who like pineapple on pizza, people who don’t like pineapple on pizza and people who just don’t like pizza.

This is an occasion-based behavioural way of segmenting the market since it’s based on what they do (eat pizza with pineapple, eat pizza but not with pineapple, don’t eat pizza).

What really matters here though, is that with this understanding, you can start to review what it is your business can offer and identify which segment is going to offer the greatest chance of success.

You would then obviously choose to NOT do any activity for the other segments.

This review of the segments and the choice of which is the most attractive is called targeting. In this step you identify your target audience.

Targeting

There are many different ways to identify which segment(s) will be the most attractive for your business.

The simplest way is where you can allocate a sales value to each group. And even if you don’t have a specific sales value for the segment, you should be able to at least quantify the number of people in each segment.

But bear in mind, that the biggest segments are often the  most competitive.

Your competitors have the same overall market you do. The bigger the segment, the more competitors it tends to attract. The competitiveness of each segment can be another variable you can consider when evaluating the attractiveness of a segment.

If there is a dominant competitor against a specific segment, it will take you more time and resources to dislodge that competitor. So it can be worth looking for less competitive segments, even if they may be smaller overall. 

Other targeting variables

There are other variables you might also want to consider. What about price for example, is one segment more prepared to pay a premium than another segment? What about easiness of access to the consumer? Can you actually find the consumer?

You can even look at more strategic views of market attractiveness. Porter’s five forces for example, looks at the following market attractiveness considerations. It looks at the threat of …

  1. Segment competition – strong players in the segment make segments less attractive
  2. New entrants – where it is easy / likely that new competitors will go after the segment, those segments are less attractive
  3. Substitutes – if the segment havs other products that can easily substitute in to meet the need, the segment is less attractive
  4. Buyers – if the buyers in this segment have increasing power, it’s less attractive 
  5. Suppliers – of the suppliers in this segment have increasing power, it’s less attractive. 
Archery target with arrows - symbolise Target audience

Role of target market choice

Targeting is really about the connection between your audience and your brand identity. You have to decide where your brand will be the most competitive. And have the best fit with a group of consumer. 

It’s also about the decision on  where NOT to play. So that you can focus your resources on the most likely segments to choose your products.

So if your products have more technology features than competitors, go for the segment which like to focus on features rather than say price or image.

If your product focusses on sustainability for example, choose to avoid the segment that values convenience over all other benefits.

The likelihood is you will probably have somewhere around 6-8 segments to choose from.

Unless your business has a portfolio of products, you should use market attractiveness to identify the top one or two segments to focus on. 

This choice is usually made by capturing data about the segments and using it to calculate an attractiveness ‘score’ for each segment.  

How to calculate segment attractiveness scores

In many businesses, the attractiveness of segments can be calculated using available data. These variable are usually found via secondary research.  Government statistics, observed behaviour and online sources can be rich sources of data to measure segments against. 

With this data, you then make decisions about the relative importance of each variable and give a weighting percentage to each variable. This really depends on our overall business goal.

This weighting is usually captured in a table of graph format where the initial data is plugged in and then weighted scores are calculated based on the data inputs.

There are essentially seven steps to the process to evaluate segment attractiveness scores. 

We’ll walk through the basic logic process, and then use a “real” example for our fictitious Pizza Shop company. 

Step 1 – Identify variables to evaluate segments

So, here you identity the variables you plan to use to measure how attractive the market is.

This could be the relative size of the market, the profitability in the market, the degree of quantification amongst other variables. The important point is that they need to be quantifiable measures, where you have access to the actual data.

Note, that your choice of variables can be more than the three we have picked in this template. But we’d recommend no more than seven to keep the model relatively simple to use. 

Step 2 – Identify weighting across variables

Here, you decide how important each variable is to your final choice.

It may be that you assume all variables are equal, but it really depends on your goals.

If your end goal was related to total sales, you might give more weight to size of market.

If your end goal was profit margin though, you might decide that profitability deserved more weight.

The important point to note here though is that the the total of all the weights needs to add up to 100. In effect, you are allocating 100 ‘points’ to each variable.

Step 3 – Identify segments to evaluate

Here you plug in each segment you want to evaluate and start to populate the scores’ for each variable for that segment. 

Market segment attractiveness blank template

Step 4 – Add up the total size of the variable

In order to create a weighted score, you need to add up each segments score (horizontally in this table) to get a “total” size for that variable.

Step 5 – Calculate the weighted score

This weighted score looks like the most complicated calculation but if you have followed steps 1 – 4, the numbers are already plugged in to the table.

You need to take the segment variable size divided by the total variable size and then multiply it by the weighting for that variable. That gives you the weighted score for that segment – variable combination.

Step 6 – Repeat for each segment

Once you have completed one row of scores, the logic applies throughout the rest of the table.

You follow the same calculation process as in Step 5 pulling the correct segment size, total variable size and weighting numbers to calculate each segment – variable score.

Step 7 – Calculate the segment total score

Do this by adding up each of it’s scores by variable. You can now compare the total (attractiveness) score for each segment.

Market segment attractiveness calculations

Example – Pizza Shop Market Attractiveness

Step 1 – Identify variables to evaluate segments

So, in this case, we chose three variables.

We chose population size of each suburb (as suburbs are the segment we are evaluating) since this information is relatively easy to find online. And from a segment attractiveness point of view, the bigger the population, the bigger the opportunity.

However, it gives no indication of how much people might pay for pizzas.

So, we also consider a more price / profit driven measure. In this case, it would be relatively easy to look at the pricing of other pizza shops in each suburb and work out an average price paid. This serves as a proxy for the likely profitability in each segment.

Finally, we also want to consider the level of competition in the market.

In this case, this could be as simple as the number of pizza shops in each suburb.

However, here, you need to be a little bit more clever with the arithmetic. More competitors makes a segment less attractive. So we need to find a way of making lower numbers more attractive.

In this case, we made an assumption that all pizza shops would be a relatively similar size, so by calculating what our share would be, we were able to flip the numbers round so that less competitors equalled a higher score.

So for example, if there were 3 competitors in the suburb, and we became competitor number 4, if all shops had equal share, our share would be 1 out of 4 or 25 %.

But, if there were 5 competitors in the market and we became number six, our equal share would only be 1 out of 6 or 16.7%.

So, with this logic, a market of 3 competitors is more attractive than a market of 5 competitors.

Step 2 – Identify weighting across variables

Here, we decided to give equal weighting to population size and profitability and less weighting to competition.

We did this because we could see a more direct link between those two variables and our business goal to grow sales.

We did not want to discount the level of competition completely, but given the nature of the category, it seemed like less of a factor than market size and profitability.

Step 3 – Identify segments to evaluate

Here we’d picked three potential suburbs as our segments to evaluate.

Step 4 – Add up the total size of the variable

For each variable – population, average price, competitiveness, we added up each row horizontally to give us a total for each variable (T1, T2, T3 etc) 

Market segment attractiveness - pizza shop example

Step 5 – Calculate the weighted score

So, as an example here. for the ‘score’ for Suburb A based on population size is the population size (a) divided by the total population size of all segments. This is 35 out of 100.

Which you then multiple by the variable weighting of 40%.

So 35 * 40% gets you  a score of 14 for the segment variable.

Step 6 – Repeat for each segment

In this case, we basically repeat step 5 a further eight times to fill in the scores for each segment – variable combination.

Step 7 – Calculate the segment total score

Our final calculation them is done by adding up each variable score under each segment.

In this case, it puts Suburb B as the most attractive segment, which is primarily driven by its high population size.

So, even though it has a lower average price and more competition, these are enough to outweigh the attractiveness of it having half the population of all suburbs that we could target.

If you are new to this process, the arithmetic that sits behind the process can be a little off-putting.

But once you grasp the basics, it’s an easily replicated model.

We’ve tried to keep the example above relatively simple to show that it can be applied even to a relatively simple business model.

But in many cases, the model can be expanded out to be even more sophisticated. It can be used to map out potential scenarios and aid decision-making.

While we won’t cover the topics here, we also recommend you check out the Boston Consultancy Group BCG matrix, and the GE McKinsey matrix models.

These include factors about your own company’s relative strength against the market attractiveness, but we plan to cover that topic in a separate skill guide.

Positioning

The final segmentation, targeting and positioning part of the process is then to work on how to ‘position’ your product. This position is how you want consumers to perceive your product in relation to other products on the market.  The term was originally conceived by Ries and Trout in their seminal book Positioning at the end of the 1960s. 

The ‘positioning statement’ is usually a crafted statement based on a standard template. You fill in the blanks relative to your brand. This positioning statement then rolls into the creation of your brand identity. 

The positioning statement generally has a minimum of five components, something like this

1. TO (Target Audience) 2. BRAND (Your Brand) 3. IS THE BRAND OF (Category Frame of Reference) 4. THAT DELIVERS (Benefit – Functional / Emotional ) 5. DUE TO (Reason to believe and Reason Why).

Target audience is the segment you have chosen to focus on. And your brand, well. that’s clearly your brand.

Let’s have a look at the other elements of the positioning statement.

Frame of Reference

The Frame of Reference is defined by a consumer grouping of similar products for which brand is a substitute.

It sets the stage on which to compete

It clarifies what brand “is” and therefore, must be inherently familiar to consumers.

The Frame of Reference should be as large as possible. But if it’s too large, it may lose it’s distinctiveness.

And if it’s too small, it may provide familiarity but represent  insignificant volume or growth potential.

So if you make chocolate bars for example, a ‘narrow’ frame of reference could be other chocolate bars.

A mid-size frame of reference could be snacks.

And a broad frame of reference could be all food.

If you choose a narrow frame of reference, this can help your business focus on very specific target groups. But you may only have a limited number of consumers who look for that very specific definition of the category.

Frame of reference tool to be used to define category with small circle of narrow definition and large circle for broad definition

 

If you go very broad with your definition, this will give you more potential consumers, but a much broader range of competitors and a less specific and less clear definition of the need.

Example Frame of reference – Pizza Shop

Let’s look at the example of the pizza company we shared earlier.

A narrow definition might be to only look at other pizza shops in the specific area where the shop is based. But as much of the pizza business is about delivery, a broader definition would be pizza delivery services delivering to a wider geographic area.

This brings in more ‘national’ brands like Pizza Hut and Domino’s and also delivery services like Menulog and DoorDash.

And if you looked at the broadest definition, you could define the market as all evening meals in Sydney. But this brings in a much wider range of options from other cuisines to home cooking.

It can take some experimenting to find the ideal definition of your category for your business as it depends on the context of your business.

 

Frame of reference - pizza shop example

But it’s an important term to agree as it not only sits in the positioning statement, it  helps define your product range, your innovation choices and your communication plan among other things.

The Point of difference

The final part of the positioning statement is the point of difference.

It is the distinct element of your brand that will make the difference for the target audience.

It is made up of the benefit tied to the justification system for the benefit – the Reason Why and the Reason to Believe. 

The benefit and benefit ladder

The benefit is what connects the consumer to your brand. It is what they want or need from the category that your brand can offer in a unique, differentiated and superior way to any of your competitors. 

To identify the benefit, you can use a tool like the Benefit Ladder.

This tool is useful because the benefit can be viewed from multiple levels. It could be related to an attribute or feature of the product itself or it could be related to a functional or emotional benefit that the consumer receives.

Each of these different levels connects with a higher or lower level benefit.

If you start at the lowest “product feature” level so that as you go “up” the ladder, each benefit is delivered “so that” the level above can be delivered until you reach the highest level emotional benefit.

Benefit ladder - Product feature, functional benefit, consumer benefit, emotional benefit

And if you start the other way round at the top of the ladder, each higher level benefit is delivered “because” the benefit below it has been delivered.

If you build each level of benefit in correctly you should be able to circle up and down the ladder.

So let’s take a hypothetical example of our pizza shop again.

Example benefit ladder – Pizza shop

The product feature could be that our shop delivers pineapple topped pizzas.

The functional benefit of this feature then might be that this product satisfies hunger cravings.

We deliver pineapple topped pizzas “so that” hunger is satisfied. 

The functional benefit to the consumer might then be that they don’t have to cook for themselves if they order a pizza from us.

Hunger is satisfied (by ordering a pizza from us)  “so that” the consumer doesn’t have to cook for themselves. 

But the emotional benefit might be that they get to spend more time with their family. Which is delivered by the benefit of not having to cook for yourself. 

All of these are perfectly valid features and benefits. But consider how your advertising might look if you decided the key benefit was satisfies hunger versus spending more time with your family.

Though these benefits are connected on the ladder, the message and way you communicate each would look quite different.

This choice of benefit to focus on is a key part of the market planning process and the segmentation, targeting and positioning process. 

Benefit ladder - pizza shop example

The top rung of the benefit ladder should stay relatively consistent.

Emotional benefits go deeper psychologically, and so tend to be stronger and more consistent over time. Think buying a car that will keep your family safe (Volvo) or buying alcohol to celebrate a special occasion (most champagne brands).

If you have a portfolio of products and run multiple campaigns, the lower level benefits can be different even if the overall brand – emotional benefit stays the same.

The Reason Why and Reason to Believe

The closing part of the positioning statement is then the Reason Why and the Reason to Believe. These two elements are the justification of validation system for the benefit your brand is claiming.

They are an articulation of why the consumer should believe that the benefit your claim is credible.

Reason Why

Reason’s why are communications elements that explain the product. They help the consumer to understand the message of the benefit. 

The Reason why might relate to ingredients. Think about advertisements you’ve seen for health and beauty products for example. These often contain descriptions of specific ingredients in the shampoo, skin care or make-up product. When the Reason Why is ingredient based, it is usually where the brand has a unique ingredient that it feels differentiates it from competitors. 

The Reason Why may relate to sourcing. Think about wine that comes from a specific country or region within a country for example. If your brand occupies a specific location that has some additional benefit and is relevant to the consumer, this can be very difficult for competitors to copy. In some categories, the sourcing of a product has become so important, that the name is legally protected. So champagne can only come from the Champagne region of France. And Feta cheese can only come from Greece, for example. 

The Reason Why may relate to how a product is made. Think about whiskies that are aged for 10 years or more or that use a certain type of still. These process driven Reason’s Why are common in premium products since they are often built around quality of attention to detail that consumers will typically pay more for. 

And finally they may relate to mode of action – what a product actually does. This is very common when looking at products that have health benefits. Think about dairy products like yoghurts of infant formulas which contain prebiotics and / or probiotics which are said to benefit the immune system. 

Check for relevance with market research

When you decide on the reason why, it’s important to ensure that it is relevant to the need or benefit the consumer is looking for. You could consider carrying out market research to identify which reason why might be strongest for your target audience. 

Reason why and reason to believe definitions RW = help consumers understand RTB = help consumers believe

Reason to believe

The second half of the justification system is then the Reason to Believe. It is the evidence or validation of why the Reason Why should be believed.

This could be related to clinical or scientific evidence behind the Reason Why. It could be that your product was the first to include or make a specific ingredient or benefit and this helps you essentially “claim” that Reason Why.

It could also be that external and impartial experts, thought leaders or influencers endorse and support your message.

Some care has to be taken to pick credible experts, but it can be a very powerful way to validate your message as they can be perceived as independent.

Finally, it may be that your brand has some sort of legitimacy based on history. Maybe your brand has been doing the same thing for such a long time it is recognised as a leader in it’s field? Maybe a past event has stuck in people’s minds and that helps back up your core message?

Sometimes it could just be down to the fact that your brand found a relevant connection to consumers long ago and has managed to retain and build on that.

Reason Why and Reason to believe ways to define

Positioning statement recap

So, while the positioning statement may seem like one sentence, you can see that it is actually a carefully constructed statement with many choices. As a reminder it follows this structure.  

1. TO (Target Audience) 2. BRAND (Your Brand) 3. IS THE BRAND OF (Category Frame of Reference) 4. THAT DELIVERS (Benefit – Functional / Emotional ) 5. DUE TO (Reason to believe and Reason Why).

With our fictitious pizza shop, you can then see that we have a target audience – pineapple pizza lovers, our brand is the name of our company and the frame of reference is pizza shops delivering to the Eastern Suburbs. 

Our benefit is a functional one (tastiest) which is backed up by a Reason Why around sourcing (the world’s finest pineapples) and a Reason to Believe that these ingredients (pineapples) have been endorsed by the World Pineapple Organisation. 

 

Segmentation, targeting, positioning - pizza shop example

To pineapple pizza lovers, the Sydney Pineapple Pizza Company is the pizza shop delivering to the Eastern Suburbs that delivers the tastiest pineapple pizzas due to sourcing the world’s finest pineapples as proven by the World Pineapple Organisation.

In conclusion

Segmentation, targeting, positioning is a key marketing process to make business choices about how your brand will operate in the market. It helps you identify segments and evaluate their attractiveness to deliver against your goals. It then helps you craft a positioning statement that sets the direction for how you will achieve those goals.

In terms of the marketing planning process, this is done then through the creation of the brand identity and brand activation plans which we cover in more detail in other skill guides.

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