Market Targeting and Strategic Positioning: January 2018

See discussions, stats, and author profiles for this publication at: https://www.researchgate.
net/publication/336773986
Market targeting and strategic positioning
Article · January 2018
CITATIONS READS
6 17,162
2 authors:
Paul Meeting Nadube Didia James

Rivers State University of Science and Technology Rivers State University of Science and Technology
17 PUBLICATIONS 12 CITATIONS 54 PUBLICATIONS 54 CITATIONS
SEE PROFILE SEE PROFILE
Some of the authors of this publication are also working on these related projects:
PREDICTORS OF AIRLINE PATRONAGE IN NIGERIA View project
All content following this page was uploaded by Paul Meeting Nadube on 24 October 2019.
The user has requested enhancement of the downloaded file.

Citation: Nadube, P. M., & Didia, J. U. D. (2018). Market targeting and strategic positioning.
International Journal of Marketing Research and Management, 8(1), 32-45.
MARKET TARGETING AND STRATEGIC POSITIONING
Paul M. Nadube Ph.D

Department of Marketing, Faculty of Management Sciences, Rivers State University, Port-
Harcourt. [email protected]
J.U.D. Didia Ph.D
Department of Marketing, Faculty of Management Sciences, Rivers State University, Port-
Harcourt. [email protected]
ABSTRAT
This seminar paper seeks to discuss market targeting and strategic positioning as critical components of marketing
strategy. In doing this, its reviews targeting strategies, factors influencing targeting decisions, targeting in different
market environments and targeting alternatives. It also reviews positioning concept, developing and managing a
position, perceptual mapping, positioning strategies and effectiveness. It is concluded that market targeting decisions
identifies the people or organisations in a product- market toward which an organisation directs its positioning
strategies and that Positioning is not what you do to the product, but what you do to the mind. Understanding how
the mind receives, stores or rejects information will improve the chances of making the positioning objective
coincide with actual positioning in the target audience.
INTRODUCTION
The strategic marketing planning process flows from a mission and vision statement to the
selection of target markets, and the formulation of specific marketing mix and positioning
objective for each product or service the organization will offer. Leading author like Kotler
present the organization as a value creation and delivery sequence. In its first phase, choosing the
value, the strategist "proceeds to segment the market, select the appropriate market target, and
develop the offer's value positioning. The formula - segmentation, targeting, positioning (STP) -
is the essence of strategic marketing." (Kotler, 1994: 93).
The market targeting decision identifies the people or organizations in a product-market toward
which an organization directs its positioning strategy. Selecting good market targets is one of
management’s most demanding challenges. For example, should the organization attempt to
serve all the people who are willing and able to buy a particular good or service or, instead,
selectively focus on one or more subgroups? Study of the product-market, its buyers, the
organization’s capabilities and resources, and the structure of competition are necessary in order
to make this decision.
Targeting and positioning strategies consist of (I) identifying and analyzing the segments in a
product-market, (2) deciding which segment(s) to target, and (3) designing and implementing a
positioning strategy for each target. Many companies use some form of market segmentation,
since buyers have become increasingly differentiated in regard to their needs and wants. Micro-
segmentation (finer segmentation) is becoming popular; aided by effective segmentation and
targeting methods such as database marketing and mass customization. The Internet offers an
opportunity for direct access to individual customers.
Factors Influencing Targeting Decisions

Market segment analysis, help to evaluate and rank the overall attractiveness of the segments
under consideration as market targets. These evaluations include analysis of customers,
competitor positioning, and the financial and market attractiveness of the segments under
consideration. An important factor in targeting is determining the value requirements which are
important to the buyers in the segment. Market segment analysis information is used to evaluate
both existing and potential market targets. Management needs to decide if the organization will
target a single segment, selectively target a few segments, or target all or most of the segments in
the product-market. The factors that influence the choice of the targeting strategy include:
• Stage of product-market maturity.
• Extent of diversity in preferences.
• Industry structure.
• Capabilities and resources.
• Opportunities for competitive advantage.
Targeting in Different Market Environments

The industry environment is influenced by the extent of concentration of its firms, the stage of its
maturity, and its exposure to international competition. Five generic environments portray the
range of industry structures (Porter 1996).
Emerging: Industries newly formed or re-formed are categorized as emerging, created by factors
such as a new technology, the changing needs of buyers, and the identification of unmet needs by
suppliers. The digital camera industry is illustrative.
Fragmented: Typically, a large number of relatively small firms make up the fragmented
industry. No company has a strong position regarding market share or influence in this industry
structure. Services like lawn care and industrial chemical distribution are examples of
fragmented industries.
Transitional: These industries are shifting from rapid growth to maturity, as represented by the
life cycles of the products in the industry. Growing rapidly until reaching high levels of
household penetration, microwave ovens are now in the maturity stage.
Declining: This industry structure is not cyclical, where sales rise and fall over time. Rather, a
declining industry is actually fading away instead of experiencing a temporary decline. Word
processing led to the decline of traditional typewriter producers.
Global: Firms in this category compete on a global basis. Examples include automobiles,
consumer electronics, steel, and telecommunications. This classification may involve traditional
or declining industry market situations.
These five industry categories are neither exhaustive nor mutually exclusive. Moreover,
changing environmental and industry conditions may alter an industry classification. Also, rapid
industry growth may occur in some countries while it is declining in other countries.
The stages of the life cycles of the products in the industry offer useful insights about the
industry environment. The generic environments discussed above are closely related to the
product life cycle (PLC) stages. Looking at competition during the product life cycle and at
different product-market levels provides insight into different types and intensities of
competition. We know that products, like people, move through life cycles. The life cycle of a
typical product is shown below. Sales begin at the time of introduction and increase over the
pattern shown. Profits initially lag sales, since expenses often exceed sales during the initial stage
of the product life cycle as a result of heavy introductory expenses. Industry sales and profits
decline after the product reaches the maturity stage. Often profits fall off before sales do.
Since an industry may contain more than one product-market and different industries may
compete in a given market, it is useful to consider the market environment as the basis of
discussion.
Emerging, growth, mature, declining, and global market environments are described to illustrate
different targeting situations.
Introduction Growth Maturity Decline
Sales
Sales, profits
Profits
+
0
Life Cycle of a Typical Product Time
-
Emerging Markets: The most pervasive feature of emerging markets is uncertainty about
customer acceptance and the eventual size of the market, which process and product technology
will be dominant, whether cost declines will be realized, and the identity, structure, and actions
of competitors (Lambkin & George, 1989). Digital photography, which began to develop in the
1990s, is an example of an emerging market. Today digital photography is in the growth stage.
Market definition and analysis are rather general in the early stages of product-market
development. Buyers’ needs and wants are not highly differentiated because buyers do not have
experience with the product. Determining the future scope and direction of growth of product-
market development may be difficult, as is forecasting the size of market growth.
Buyer Diversity: The similarity of buyers’ preferences in the new product-market often limits
segmentation efforts. It may be possible to identify a few broad segments. For example, heavy,
medium, and low product usage can be used to segment a new product-market where usage
varies across buyers. If segmentation is not feasible, an alternative is to define and describe an
average or typical user, directing marketing efforts toward these potential users.
Industry Structure: Study of the characteristics of market pioneers indicates that new enterprises
are more likely to enter a new product-market than are large, well-established companies. The
exception is a major innovation in a large company coupled with strong entry barriers. The
pioneers developing a new product-market are typically small new organizations set up
specifically to exploit first-mover advantages in the new resources space. These entrepreneurs
often have limited access to resources and must pursue product-market opportunities that require
low levels of investment. Industry development is influenced by the rate of acceptance of the
product by buyers, entry barriers, the performance of firms serving the markets and future
expectations. The pioneer’s proprietary technology may make entry by others impossible until
they can gain access to technology.
Capabilities and Resources: A firm entering a new product-market is more likely to achieve a
competitive edge by offering buyers unique benefits rather than by offering lower prices for
equivalent benefits, though cost may be the basis of superior value when the new product is a
lower-cost alternative technology to an existing product. For example, fax transmission of letters
and brief reports is both faster and less expensive than overnight delivery services. The
development of e-mail capabilities gave this form of transmission an advantage over fax
transmissions. Research concerning the order to market entry indicates that the pioneer has a
distinct advantage over firms subsequently entering the market. These studies estimate that the
second firm entering the market will obtain 60 to 70 percent of the share of the pioneer. The
pioneer can develop entry barriers, making it more difficult and costly for others to enter. The
advantage of an early follower is the opportunity to evaluate the pioneer’s performance and thus
reduce the risk of entry failure. Entry timing may also depend on the firm’s resources and skills.
Targeting Strategy: Despite the uncertainties in an emerging industry, some evidence indicates
that more successful or longer-living firms engage in less change than firms which fail,
(Romanelli,1987). Instead, these experienced firms select and follow a consistent strategy on a
continuing basis. If this behaviour is characteristic of a broad range of successful new ventures,
then choosing the entry strategy is very important.
Several new product-market entry situations are shown in the table below. In situation A, the
customer target is the potential user of a product that meets a need not previously satisfied. A
cure for the AIDS virus is an example. The market target for this type of entry should include a
substantial portion of potential buyers who are willing and able to buy the product. The price of
the product, how well it satisfies buyers’ needs and wants, and other factors may restrict the size
of the potential market. Entry situation B requires a more focused strategy than does A. Digital
photography at the market entry stage was expensive and relatively complex in use. Initial
potential users were professional photographers for newspapers. Ease of transmission and other
digital features offered benefits greater than the high prices charged for the equipment. Situation
C involves targeting two or more segments in the product-markets where a new product offers a
promising substitute solution to buyers’ needs and wants. As mentioned earlier, fax
communication technology is a substitute for other communications alternatives (and e-mail is a
substitute for fax). For example, one segment for fax machines is made up of large and medium-
size businesses that have been using overnight delivery services for letters and short reports.
Illustrative Market-Entry Situations for New Products
Targeting Strategy New Market Existing Marketing

Single target A Targeting a new product- B. Targeting existing product-
market (new drug for market (digital photography)
incurable disease)
Multiple targets D. Targeting a few broad C. Targeting several substitute
segments markets (fax machines for
overnight delivery and other
substitutes).
Situation D may occur when there is an opportunity for buyer need differentiation and the
entering firm wants to establish a dominant position in the new market by targeting a few broad
segments. If the initial targeting is too narrow, the firm may fail to develop its capabilities in
meeting customer needs for more than one group of users.
Growth Market: Segments are likely to be found in the growth stage of the market. Identifying
customer groups with similar needs improve targeting, and experience with the product, process,
and materials technologies leads to greater efficiency and increased standardization (Lambkin
and Day 1989). During the growth stage the market environment moves from highly uncertain to
moderately uncertain. Further change in the market is likely, but information is available about
the forces that influence the size and composition of the product-market.
Patterns of use can be identified, and the characteristics of buyers and their use patterns can be
determined. Segmentation by type of industry may be feasible in industrial markets.
Demographic characteristics such as age, income, and family size may identify broad macro-
segments for consumer products such as food and drugs. Analysis of the characteristics and
preferences of existing buyers yields useful guidelines for estimating market potential.
Industry Structure: We often assume that high-growth markets are very attractive and that early
entry offers important competitive advantages. Nevertheless, there are some warnings for
industry participants: First, a visible growth market can attract too many competitors-the market
and its distribution channel cannot support them. The intensity of competition is accentuated
when growth fails to match expectations or eventually slows. Second, the early entrant is unable
to cope when key success factors or technologies change, in part because it lacks the financial
skills or organizational skills.
Industry structure generalizations in growth markets are difficult. There is some evidence that
large, established firms are more likely to enter growth markets than to enter emerging markets.
This is the case because these companies may not be able to move as quickly as small specialist
firms in exploiting the opportunities in the emerging product- market). The established
companies have skills and resource advantages for achieving market leadership. These powerful
firms can overcome the timing advantage of the market pioneers. Later entrants also have the
advantage of evaluating the attractiveness of the product-market during its initial development.
Capabilities and Resources: Survival analysis of firms in the minicomputer industry highlights
two performance characteristics in the rapid growth stage of the product-market: (1) Survival
rates are much higher for aggressive firms competing on a broad market scope compared to
conservative firms competing on the same basis, and (2) survival rates are high (about three-
quarters) for both aggressive and conservative specialists). Survival requires aggressive action by
firms that seek large market positions in the total market. These firms must possess the
capabilities and resources necessary to achieve market position. Other competitors are likely to
be more successful by selectively targeting one or a few market segments.
Targeting Strategy: Targeting decisions in growth market situations are influenced by several
factors: (1) the capabilities and resources of the organization, (2) the competitive environment,
(3) the extent to which the product-market can be segmented, (4) the future potential of the
market, and (5) the market-entry barriers confronting potential competitors. There are at least
three possible targeting strategies: extensive market coverage by firms with established
businesses in related markets, selective targeting by firms with diversified product portfolios,
and very focused targeting strategies by small organizations serving one or a few market
segments (Porter 1996).
A selective targeting strategy is feasible when buyers’ needs are differentiated or when products
are differentiated. The segments that are not served by large competitors provide an opportunity
for the small firm to gain competitive advantage. The market leader(s) may not find small
segments attractive enough to seek a position in one of those segments. If the buyers in the
market have similar needs, a small organization may gain advantage through product
specialization. This strategy would concentrate on a specific product or component. Dell
Computer is an interesting example of a success market entry in the growth stage of the personal
computer market. The company used standard components to assemble made-to- order
computers marketed through direct order channels and targeted to business buyers.
The objective of the targeting strategy is to match the organization’s distinctive capabilities to
value opportunities in the product-market. The number of specific targets to pursue depends on
management’s objectives and the available segments in the market. During the growth stage of
the business market for personal computers, the three major segments were small, medium-size,
and large companies. There are likely to be relatively few segments in the growth stage,
identified by one or a few general characteristics (e.g., size of business, household size).
Mature and Declining Markets: Not all firms that enter the emerging and growth stages of the
market survive in the maturity stage. The needs and characteristics of buyers also change over
time. Market entry at the maturity stage is less likely than it is in previous life cycle stages.
Buyer Diversity: Segmentation is often essential at the maturity stage of the life cycle. At this
stage, the product-market is clearly defined, indicating buyers’ preferences and the competitive
structure. The factors that drive market growth are often apparent. The market is not likely to
expand or decline rapidly. Nonetheless, eventual decline may occur unless actions are taken to
extend the product life cycle through product innovation and the development of new product
applications.
Identification and evaluation of market segments are necessary to select targets that offer each
firm a competitive advantage. Since the mature market has a history, experience should be
available concerning how buyers respond to the marketing efforts of the firms competing in the
product-market. Knowledge of the competitive and environmental influences on the segments in
the market helps to obtain accurate forecasts and select positioning strategies.
The maturity of the product-market may reduce its attractiveness to the companies serving the
market, and so the market-driven organization may benefit from (1) scanning the external
environment for new opportunities that are consistent with the organization’s skills and resources
(core competencies), (2) identifying potential disruptive technology threats to the current
technologies for meeting customer needs, and (3) identifying opportunities within specific
segments for new and improved products.
Buyers in mature markets are experienced and often demanding. They are familiar with
competing brands and often display preferences for particular brands. The key marketing issue is
developing and sustaining brand preference, since buyers are aware of the product type and its
features. Many top brands, such as Coca-cola and Gillette have held their leading positions for
more than half a century. This highlights the importance of obtaining and protecting a lead
position at an early stage in the development of a market.
Industry Structure: The characteristics of mature industries include intense competition for
market share, emphasis on cost and service, slowdown in new product flows, international
competition, pressures on profits, and increases in the power of channel of distribution
organizations that link manufacturers with end-users. Deciding how to compete successfully in
the mature product-market is a demanding challenge.
The typical mature industry structure consists of a few companies that dominate the industry and
several other firms that pursue market selectivity strategies. The larger firms may include a
market leader and two or three competitors with relatively large market positions compared to
the remaining competitors. Entry into the mature product-market is often difficult because of
major barriers and intense competition for sales and profits. Those that enter follow market or
product selectivity strategies. Acquisition may be the method for market entry rather than trying
to develop products and marketing capabilities. Mature industries are increasingly experiencing
pressures for global consolidation. Examples include automobiles, foods, household appliances,
prescription drugs, and consumer electronics.
Capabilities and Resources: Depending on the firm’s position in the mature market,
management’s objective may be cost reduction, selective targeting, or product differentiation.
Poor performance may lead to restructuring the corporation to try to improve financial
performance. If improvement is not feasible, the decision may be to exit from the business.
Targeting Strategy: Both targeting and positioning strategies may change in moving from the
growth stage to the maturity stage of the product-market. Targeting may be altered to reflect
changes in priorities among market targets. Positioning within a targeted market may be adjusted
to improve customer satisfaction and operating performance. When the product-market reaches
maturity, management is likely to place heavy emphasis on efficiency.
Targeting segments is appropriate for all firms competing in the mature product-market. The
strategic issue is deciding which segments to serve. Market maturity may create new
opportunities and threats in a company’s market target(s). Firms pursuing extensive targeting
strategies may decide to exit from certain segments. The targets that are retained in the portfolio
can be prioritized to help guide product research and development, channel management, pricing
strategy, advertising expenditures, and selling effort allocations. Exits from some targets and
shifts in targeting priorities by large competitors may create new opportunities for smaller
competitors that use selective targeting strategies.
Global Markets: Understanding global markets is important regardless of where an organization
decides to compete, since domestic markets often attract international competitors. The
increasingly smaller world linked by instant communications, global supply networks, and
international finance markets mandates evaluating global opportunities and threats. In selecting
strategies for global markets, there are two primary options for consideration: (1) the advantages
of global reach and standardization and (2) the advantages of local adaptation.
Global Reach and Standardization: This strategy considers the extent to which standardized
products and other standardized strategy elements can be designed to compete on a global basis.
The world is the market arena, and buyers are targeted without regard to national boundaries and
regional preferences. Global standardized products are not commodities. Instead, they are
differentiated but standardized across nations. The objective is to identify market segments that
span global markets and to serve these needs with global positioning strategies.
Nestlé is the world’s largest food producer. The company’s management recognizes the potential
value of Internet initiatives in managing Nestlé’s global portfolio of brands in operations located
throughout the world. The Global Feature describes how the company is using the Web in
producing and marketing its product assortment.
Local Adaption: In some international markets, domestic customers are targeted and positioning
strategies are designed to consider the requirements of domestic buyers. A wide variety of social,
political, cultural, economic, and language differences among countries affect buyers’ needs and
preferences. These variations need to be accounted for in targeting and positioning strategies. For
example, food and beverage vary across national and regional boundaries. Instant coffee is
popular in Britain but not in France. Nestlé employs domestic and regional strategies for several
of its food products.
Targeting strategy: Strategies for competing in international markets range from targeting a
single country, to regional (multinational) targeting, to targeting on a global basis. The strategic
issue is deciding whether to compete internationally and, if so, how to compete. Also, the choice
of a domestic focus requires an understanding of relevant global influences on the domestic
strategy.
Selecting strategies for global markets requires examining the trade-offs between global
reach/standardization and local adaptation. If there are no advantages to either standardization or
local adaptation, there may be advantages in applying a domestic strategy that has been
successful in one country to other countries with similar needs and market conditions. When
both standardization and local adaptation are important, a composite strategy can be followed
using decentralized marketing and a standard product with selected options.
Three strategic options are available for a multinational threatened by global competition. One
possibility is to convert to a global strategy. The strategy used by IBM for computers is an
example of global strategy. A second option is establishing a strategic alliance with one or more
companies that provide market access and other global benefits. A third option is to target a
market segment that the organization can dominate and build entry barriers against global
competitors.
Targeting Alternatives
Having evaluated different segments, the company must decide which and how many segments
to serve. In other words, it must decide which segments to target. The company can consider the
five patterns of target market selection.
Single-segment Concentration: In the simplest case, the company selects a single segment.
Through concentrated marketing, the firm gains a strong knowledge of the segment’s needs and
achieves a strong market position in the segment. Furthermore, the firm enjoys operating
economies through specializing its production, distribution, and promotion. If it captures
leadership in the segment, the firm can earn a high return on its investment.
Selective Specialization: Here the firm selects a number of segments, each objectively
attractive and appropriate, given the firm’s objectives and resources. There may be little or no
synergy among the segments, but each segment promises to be a money maker. This multi-
segment coverage strategy has the advantage of diversifying the firm’s risk. Even if one segment
becomes unattractive, the firm can continue to earn money in other segments. Selective
specialization is becoming quite popular in radio broadcasting. Radio broadcasters that want to
appeal both to younger and older listeners (and thus to a broader range of advertisers) can do so
by having two different stations in the same market.
Product Specialization: Here the firm concentrates on making a certain product that it sells to
several segments. An example would be a microscope manufacturer that sells microscopes to
university laboratories, government laboratories, and commercial laboratories. The firm makes
different microscopes for these different customer groups, but does not manufacture other
instruments that laboratories might use. Through a product specialization strategy, the firm
builds a strong reputation in the specific product area. The downside risk is that the product may
be supplanted by an entirely new technology.
Market Specialization: Here the firm concentrates on serving many needs of a particular
customer group. An example would be a firm that sells an assortment of products for university
laboratories, including microscopes, oscilloscopes, Bunsen burners, and chemical flasks. The
firm gains a strong reputation for specializing in serving this customer group and becomes a
channel for all new products that the customer group could feasibly use. The down-side risk is
that the customer group may have its budgets cut.
Full Market Coverage: Here a firm attempts to serve all customer groups with all the products
that they might need. Only very large firms can undertake a full market coverage strategy.
Examples include IBM (Computer market), General Motors (Vehicle market), and Coca-cola
(Drink market). Large firms can cover a whole market in two broad ways: through
undifferentiated marketing or differentiated marketing.
Undifferentiated Marketing: Here, the firm ignores market-segment differences and goes after
the whole market with one market offer. It focuses on buyers’ needs rather than differences
among buyers. It designs a product and a marketing program that will appeal to the broadest
number of buyers. It relies on mass distribution and mass advertising. It aims to endow the
product with a superior image in people’s minds. An example of undifferentiated marketing is
the Coca-cola Company’s early marketing of only one drink in one bottle size in one taste to suit
everyone. A current example in Japan is the popular fukubukoro (“lucky bag”), a sealed bag of
miscellaneous goods that people buy because they believe the store manager’s assertion that
what is contained in the bag is a good buy for the price, (Norihiko S, 1994).
Undifferentiated marketing is often seen as the marketing counterpart to standardization and
mass production in manufacturing. The narrow product line keeps down production, inventory,
and transportation costs. The undifferentiated advertising program keeps down advertising costs.
The absence of segment research and planning lowers the costs of marketing research and
product management. Presumably, the company can turn its lower costs into lower prices to win
the price-sensitive segment of the market.
Nevertheless, many marketers have expressed strong doubts about this strategy. Gardener and
Levy, while acknowledging that “some brands have very skillfully built up reputations of being
suitable for a wide variety of people”, noted that “it is not easy for a brand to appeal to stable
lower-middle-class people and at the same time to be interesting to sophisticated, intellectual
upper-middle-class buyers… It is rarely possible for a product or brand to be all things to all
people.
When several competitors practice undifferentiated marketing, the result is intense competition
in the largest market segments and under satisfaction of the smaller ones. Kuehn and Day have
called this tendency to chase the largest market segment the “majority fallacy.” The recognition
of this fallacy has led firms to increase their interest in entering smaller neglected market
segments.
Differentiated Marketing: In differentiated marketing, the firm operates in several market
segments and designs different programs for each segment. General Motors does this when it
says that it produces a car for every “purse, purpose, and personality”. IBM offers many
hardware and software packages for different segments in the computer market.
Strategic Positioning
The final act in the target marketing process of segmentation and targeting is positioning.
Following on from the identification of potential markets, determining the size and potential of
market segments and selecting specific target markets, positioning is the process whereby
information about the organization or product is communicated in such a way that the object is
perceived by the consumer/stakeholder to be differentiated from the competition, to occupy a
particular space in the market. According to Kotler (2007), ‘Positioning is the act of designing
the company’s offering and image so that they occupy a meaningful and distinct competitive
position in the target customers’ minds. "Positioning is not what you do to the product, but what
you do to the mind." Understanding how the mind receives, stores or rejects information will
improve the chances of making the positioning objective coincide with actual positioning in the
target audience.
This is an important aspect of the positioning concept. Positioning is not about the product but
what the buyer thinks about the product or organization. It is not the physical nature of the
product that is important for positioning, but how the product is perceived that matters. This is
why part of the context analysis requires a consideration of perception and attitudes and the way
stakeholders see and regard brands and organizations. Of course, this may not be the same as the
way brand managers intend their brands to be seen or how they believe the brand is perceived.
The positioning concept is not the sole preserve of branded or consumer-oriented offerings or
indeed those of the business-to-business market. Organizations are also positioned relative to one
another, mainly as a consequence of their corporate identities, whether they are deliberately
managed or not. The position an organization takes in the mind of consumers may be the only
means of differentiating one product from another. King (1991) argues that, given the
advancement in technology and the high level of physical and functional similarity of products in
the same class, consumers’ choices will be more focused on their assessment of the company
they are dealing with. Therefore, it is important to position organizations as brands in the minds
of actual and potential customers.
One of the crucial differences between the product and the corporate brand is that the corporate
brand needs to be communicated to a large array of stakeholders, whereas the product-based
brand requires a focus on a smaller range of stakeholders, in particular the consumers and buyers
in the performance network. Whatever the position chosen, either deliberately or accidentally, it
is the means by which customers understand the brand’s market position, and it often provides
signals to determine a brand’s main competitors, or (as is often the case) customers fail to
understand the brand or are confused about what the brand stands for (Fill, 2006).
The Positioning Concept

All products and all organizations have a position. The position held by each stake-holder can be
managed or it can be allowed to drift. An increasing number of organizations are trying to
manage the positions occupied by their brands and are using positioning strategies to move to
new positions in buyers’ minds and so generate an advantage over their competitors. This is
particularly important in markets that are very competitive and where mobility barriers (ease of
entry and exit to a market, e.g. plant and production costs) are relatively low.
Positioning is about visibility and recognition of what a product/service represents for a buyer. In
markets where the intensity of rivalry and competition are increasing and buyers have greater
choice, identification and understanding of a product’s intrinsic values become critical. Network
members have limited capacities, whether this be the level or range of stock they can carry or the
amount of available shelf space that can be allocated. An offering with a clear identity and
orientation to a particular target segment’s needs will not only be stocked and purchased but can
warrant a larger margin through increased added value.
Positioning, therefore, is the natural conclusion to the sequence of activities that constitute a core
part of the marketing strategy. Market segmentation and target marketing are prerequisites to
successful positioning. Generally, there are two main ways in which a brand can be positioned:
functional and expressive (or symbolic). Functionally positioned brands stress the features and
benefits, and expressive brands emphasize the ego, social and hedonic satisfactions that a brand
can bring. Both approaches make a promise, a promise to deliver a whiter, cleaner and brighter
soap powder (functional) or clothes that we are confident to hang on the washing line (for all to
see), dress our children in and send to school and not feel guilty, or dress ourselves and complete
a major business deal (symbolic).
Developing and Managing a Position

To develop a position, managers should be guided by the following process:
1. Which positions are held by which competitors? This will almost certainly require
consumer research to determine attitudes and perceptions and possibly the key attributes
that consumers perceive as important. Use perceptual mapping.
2. From the above, will it be possible to determine which position, if any, is already held by
the focus brand?
3. From the information gathered so far, will it be possible to determine a positioning
strategy, that is, what is the desired position for the brand?
4. Is the strategy feasible in view of the competitors and any budgetary constraints? A long-
term perspective is required, as the selected position has to be sustained.
5. Implement a programme to establish the desired position.
6. Monitor the perception held by consumers of the brand, and of their changing tastes and
requirements, on a regular basis.
Perceptual Mapping
In order to determine how the various offerings are perceived in a market, the key attributes that
stakeholders use to perceive products in the market need to be established. A great deal of this
work will have been completed as part of the research and review process prior to developing a
communications plan. The next task is to determine perceptions and preferences in respect of the
key attributes as perceived by buyers.
The objective is to produce a perceptual map (brand and multi dimensional maps) where the
dimensions used on the two axes are the key attributes, as seen by buyers. This map represents a
geometric comparison of how competing products are perceived (Sinclair and Stalling, 1990).
Exhibit 1 shows that the key dimensions for consumers in the market could be price and
enrichment.
Vitamin enriched
D

Ideal brand and a
market opportunity as
E
there are no brands
close to this point.
Low price B
High price
C C
A


No enrichment
A perceptual map for a product

Each product is positioned on the map according to the perception that buyers have of the
strength of each attribute of each product. By plotting the perceived positions of each brand on
the map, an overall perspective of the market can be developed.
The closer products are clustered together, the greater the competition. The farther apart the
positions, the greater the opportunity to enter the market, as competition is less intense. From the
map, it can be seen that brand A dominates the bottom left-hand sector where a low price and
little enrichment have attracted a number of buyers and competitive brands. Brands B and C are
in direct competition, positioned closely together on a fairly high price yet medium level of
enrichment. Brand D is isolated and may need to be repositioned as it may start losing share to a
competitor, especially if the ideal position is occupied by B or any of the brands clustered around
brand E.
Substitute products are often uncovered by their closeness to each other (Day et al., 1979). It is
also possible to ask buyers and other stakeholders what an ideal brand would consist of. This
perfect brand can then be positioned on the map, and the closer an offering is to the ideal point,
the greater its market share should be, as it is preferred more than its rivals. These maps are
known as preference maps.
By superimposing the position of an ideal brand on the map, it is possible to extend the
usefulness of the tool. Perceptions of what constitutes the right amount of each key attribute can
assist management in the positioning exercise. Marketing communications can, therefore, be
designed to convey the required information about each attribute and so adjust buyers’
perceptions so that they are closer to the ideal position, or to the position on the map that
management wants the brand to occupy. For example, brand C may wish to reposition by
changing the perception that users have of the quality of the shampoo. Following any necessary
adjustments to the product, marketing communications would emphasize the enrichment

attribute and hope to move it away from any association with brand B.
Neal (1980) offered the following reasons why perceptual mapping is such a powerful tool for
examining the position of products:
1. It develops understanding of how the relative strengths and weaknesses of different
products are perceived by buyers.
2. It builds knowledge about the similarities and dissimilarities between competing
products.
3. It assists the process of repositioning existing products and the positioning of new
products.
4. The technique helps to track the perception that buyers have of a particular product, and
assists the measurement of the effectiveness of communication programmes and
marketing actions, intended to change buyers’ perceptions.
Positioning Strategies
The development of positions that buyers can relate to and understand is an important and vital
part of the marketing communications plan. In essence, the position adopted is a statement about
what the brand is, what it stands for and the values and beliefs that customers (hopefully) will
come to associate with the particular brand. The visual images or the position statement
represented in the strap line may be a significant trigger that buyers use to recall images and
associations of the brand.
There are a number of overall approaches to developing a position. These can he based on
factors such as the market, the customer or redefining the appeal of the brand itself. To
implement these three broad approaches various strategies have been developed. The list that
follows is not intended to be comprehensive or to convey the opinion that these strategies are
discrete. They are presented here as means of conveying the strategic style, but in reality, a
number of hybrid strategies are often used.
Product Features: This is one of the easier concepts and one that is more ‘commonly adopted.
The brand is set apart from the competition on the basis of the attributes, features or benefit that
the brand has relative to the competition.
Price/Quality: This strategy is more effectively managed than others because price itself can be a
strong communicator of quality. A high price denotes high quality, just as a low price can
deceive buyers into thinking a product to be of low quality and poor value.
Use: By informing markets of when or how a product can be used, a position can be created in
the minds of the buyers. For example, Kellog’s, the breakfast cereal manufacturer, has
repositioned itself as a snack food provider. Its marketing strategy of moving into new markets
was founded on its overdependence on breakfast consumption. By becoming associated with
snacks, not only is usage increased, but the opportunity to develop new products becomes
feasible strategy. Milky Way, ‘The sweet you can eat between meals’, informs just when it is
permissible to eat chocolate; and After Eight chocolate mints clearly indicate when they should
be eaten.
Product Class Dissociation: Some markets are essentially uninteresting, and most other
positions have been adopted by competitors. A strategy used by margarine manufacturers is to
disassociate themselves from other margarines and associate themselves with what was
commonly regarded as a superior product, butter. The moisturizing bar Dove is positioned as
‘Not a soap’.
User: A sensible extension of the target marketing process is to position openly so that the target
user can be clearly identified. Flora margarine was for men, and then it became ‘for all the
family’.
Competitor: For a long time, positioning oneself against a main competitor was regarded as
dangerous and to be avoided. Avis, however, performed very successfully ‘trying even harder’
against Hertz, the industry number one. Saab contested the ‘safest car’ position with Volvo and
Qualcast took on its new rival, the hover mower, by informing everyone that ‘It’s a lot less
bovver than a hover, because its product collected the grass cuttings and produced the manicured
lawn finish that roller-less mowers cannot reproduce.
Benefit: Positions can also be established by proclaiming the benefits that usage confers on those
who consume. Sensodyne toothpaste appeals to all those who suffer from sensitive teeth, and a
vast number of pain relief formulations claim to smooth away headaches or relieve aching limbs,
sore throats or some offending part of the anatomy. Daewoo entered the UK offering car buyers
convenience by removing dealerships and the inherent difficulties associated with buying and
maintaining cars.
Positioning Effectiveness
How do we know if we have a good positioning strategy? The company’s marketing offer and
image should be both distinct and valued in the minds of the customers in the market target.
Does the strategy yield the results that are expected concerning sales, market share, profit
contribution, growth rates, customer satisfaction, and other competitive advantage outcomes?
Gauging the effectiveness of a marketing program strategy using specific criteria such as market
share and profitability is more straightforward than evaluating competitive advantage. Yet
developing a positioning strategy that cannot be easily copied is an essential consideration.
Companies do not alter their positioning strategies on a frequent basis, although adjustments are
made at different stages of product-market maturity and in response to environmental, market,
and competitive forces. Even though frequent changes are not made, a successful positioning
strategy should be evaluated on a regular basis to identify shifting buyer preferences and changes
in competitors’ strategies. The importance of clear, strong positioning is undermined by faulty
positioning, which can undermine a company’s marketing strategy. Positioning errors include:
• Underpositioning - when customers have only vague ideas about the company and its
products and do not perceive anything distinctive about them.
• Overpositioning - when customers have too narrow an understanding of the company,
product, or brand.
• Confused positioning - when frequent changes and contradictory messages confuse
customers regarding the positioning of the brand.
• Doubtful positioning - when the claims made for the product or brand are not regarded as
credible by the customer.
Positioning and Targeting Strategies

Recognizing the interrelationship between market target and positioning strategies is important:
Positioning usually means that an overt decision is being made to concentrate only on certain
segments. Such an approach requires commitment and discipline because it is not easy to turn
your back on potential buyers. Yet, the effect of generating a distinct, meaningful position is to
focus on the target segments and not be constrained by the reaction of other segments.
Positioning becomes particularly challenging when management decides to target several
segments. The objective is to develop an effective positioning strategy for each segment. The use
of a different brand for each targeted segment is one way to focus a positioning strategy.
CONCLUSION
Undertaking a Segmentation, Targeting and Positioning process is probably one of the most
important processes management should undertake both at the onset of a new offer creation as
well as part of a periodic revision of the portfolio of offers and strategies used by the
organization. The process can be one that tests one’s ability to think creatively and so that is one
important reason why frequently companies seek the assistance of an outside researcher to help
them through the process. Working in tandem, marketing analysts/researchers and business
executives can achieve effective Segmentation, Targeting and Positioning (STP) strategies.
REFERENCE
Burleigh G. and Sidney L. (1998) “The product and the brand” Harvard Business Review, March
to April.
Craven D. W. and Piercy N. F. (2001) Strategic marketing: McGraw-Hill Irwin.
Fill C (2006) Marketing communications: Engagement, strategies, and control. Europe,
London: Prentice Hall.
Fefer, M. D. (1993) “Job tip: Horses need shoes too” Futune, December 27: 14-18.
King, S. (1991) Brand building in the 1990s. Journal of marketing management, 7(2): 3-13.
Kotler, P. (1997) Marketing management: Analysis, planning, implementation, and control.
Englewood Cliffs, NJ: Prentice Hall.
Kuehn A. A. and Day R.L. (1996) “Strategy of product quality”, Harvard Business Review
66(2): 52-55
Levitt, T. (1960). Marketing myopia. Harvard Business Review 8(2):45-56.
Lambkin. M and Day, G. S. (1989), “Evolutionary processes in competitive markets: Beyond the
product life cycle,” Journal of Marketing, 7(4): 12-18
Porter, M. E. (1996) “What is strategy?” Harvard Business Review, 66(2): 42-45
Porter, M. E. (1980) Competitive strategy: New York: Free Press
Romanelli, E. (1987) “New ventures strategies in the minicomputer industry” California
Management Review, Fall, 161.
Sinclair, S. A. and Stalling, E.C. (1990) perceptual mapping: A tool for industrial marketing; a
case study. Journal of Business and Industrial Marketing ,5(1):55-65.
Shimizu N. (1994) Bacon and eggs, hold the egg,” Tokyo Business School, 23(8):35.
View publication stats

Market Targeting and Strategic Positioning: January 2018

Uploaded by

Copyright:

Available Formats

Market Targeting and Strategic Positioning: January 2018

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Market Targeting and Strategic Positioning: January 2018

Uploaded by

Copyright:

Available Formats

What is market targeting and strategic positioning?

What is market targeting and strategic positioning?

What factors influence targeting decisions?

What factors influence targeting decisions?

See discussions, stats, and author profiles for this publication at: https://www.researchgate.

Market targeting and strategic positioning

Article · January 2018

Paul Meeting Nadube Didia James

SEE PROFILE SEE PROFILE

PREDICTORS OF AIRLINE PATRONAGE IN NIGERIA View project

The user has requested enhancement of the downloaded file.

MARKET TARGETING AND STRATEGIC POSITIONING

Paul M. Nadube Ph.D

Factors Influencing Targeting Decisions

Targeting in Different Market Environments

Introduction Growth Maturity Decline

Targeting Strategy New Market Existing Marketing

The Positioning Concept

Developing and Managing a Position

A perceptual map for a product

adjustments to the product, marketing communications would emphasize the enrichment

Positioning and Targeting Strategies

View publication stats

You might also like