Identifying Market Segments, Selecting Market Targets, and Developing Market Positions

This chapter starts with Kotler talking about the importance of recognizing that companies cannot effectively serve all customers in a market. "The firm, instead of competing everywhere, often against superior odds, needs to identify the most attractive market segments that it can serve effectively."

Kotler goes on to say: "the heart of modern strategic marketing can be described as STP marketing - namely, segmenting, targeting and positioning. This does not obviate the importance of LGD marketing - lunch, golf and dinner" !

Kotler explains that sellers have not always held this view and marketing thinking has passed through three phaes; i) mass marketing, ii) product-variety marketing and iii) target marketing.

In today's world, most companies adopt the target market approach and by using new technologies effectively, marketers are able to target customers and importantly, measure response.

Even today, marketers need to follow Kotler's three step approach to Market Segmentation, Targeting and Positioning;

• Identify segmentation variables & segment the market
• Develop profiles of resulting segments
• Evaluate the attractiveness of each segment
• Select the target segments
• Identify possible positioning concepts for each target segment
• Select, develop, and signal the chosen positioning concept

 Getting this stage of your marketing strategy correct is clearly critical to developing an effective strategy. Get it wrong and your business is heading for disaster.