Marketing: Segmentation, Targeting and Positioning

Marketing: Segmentation, Targeting and Positioning

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Nowadays, Segmentation, Targeting and Positioning (STP) is the most used strategic way in Marketing. It is the prime of the available methods that are applied to create marketing models in practice. This model is beneficial when making marketing communication plans because it aids marketers to prioritize ideas and thereby create and advertise unique and appropriate slogans to communicate with various segments this is a segment based strategy rather than a product based strategy. This strategy enables to communicate more appropriate messages to product appealing segments.

Segmentation is a marketing strategy that involves separating a wide target market into small groups of customers who share the common need of using or purchasing the product that needs to be marketed. Market segmentation strategies are utilized to identify these groups of consumers and strategies are designed and implemented to make the product or service appeal to them. Support and also the product will be strategically placed in order to successfully achieve the ultimate marketing goal. Businesses and organizations may come up with different type of strategies involving different products and catchy phrases depending on the product or the target segment.

Once a business has successfully completed segmentation based on the market into various groups the targets will be chosen. As we all know no one unique strategy will be able to appeal to all consumer segments therefore being able to come up with different strategies for specific targets are a vital aspect of marketing.

There are three strategies that are generally used for identifying the most profitable target markets and they are as follows

The activities consisted in the process of identifying a problem that has to be addressed in marketing or an opportunity to increase the brand image of a business or to increase sales volume by having an increased reach in advertising and formulating a strategy based on extensive market research, segmentation and supporting data is known as positioning in terms of marketing. Positioning is formulating a strategy using tactical development phases to carry out a goal to attain an organizational objective.

Generally the positioning process involves the following steps

Task 2
Micro environmental Factors
There are six primary micro environmental factors that usually influence Boots’ business activities, each of the microenvironment factors consists within itself a self-contained micro environment that is alone but allows interaction between other micro environments. The six primary micro environmental factors are divided into two groups one which directly impacts Boots’ and the other that doesn’t.

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The three factors that have a direct impact on Boots are

• Employees
• Stakeholders
• Subcontractors

The three factors which doesn’t impact Boots directly are

• Business perception
• Competitors
• Customers

Macro environmental Factors
Macro environmental factors are factors that cannot be controlled by Boots, external forces that impact how Boots functions. They are mostly out of the businesses reach and mostly require change the operating way of that particular organization, change in production and change in marketing. Marketing analysts usually categorize these as an acronym PESTEL.

The macro environmental factors that affect Boots are given as follows

• Political
• Economical
• Social
• Technological
• Environmental
• Legal

Buyer Behaviour
As well as understanding the needs and wants of customers, Boots also needs to understand what are the factors that motivate a buyer to buy the product, in other words the incentives that Boots provides so that customers buy their products. Understanding the customers enable to distribute the product more effectively and also being able to command an effective price.

Understanding the psychology of how and what makes a customer buy a product and no matter the size of the business understanding this process ensures successful marketing of a product. There are two types of customers and they are as follows

Business customer

Usually a business will go through the following steps for a purchase

• Identifying a necessity or a problem
• Develop a specification for that need
• Find services or suppliers to fulfill that necessity
• Evaluate the services or needs
• Ready to place an order for that product
• Evaluate the performance of the supplier and the product
• Purchase the item if it passes the above criteria


There are many models that depict the behavior of a consumer and the steps they go through in order for a purchase. The steps given below give a fair understanding of the models.

• Identifying a necessity
• Finding out information on how to fulfill that necessity
• Finding out the range of products that can fulfill the necessity
• Deciding on which of the range would suit the consumer best
• Using the product

Understanding the behavior of the buyer is crucial to marketing but it does not stop there to be a successful business for the long haul buying patterns and extensive market research also needs to be carried out.

Task 3
How products are designed to gain a competitive advantage
Pharmaceuticals giant Boots has an open innovation Initiative back in 2010 through its Centre for Innovation. Boots has stayed the lead distributor in pharmaceutical products throughout Great Britain by collaborating with entrepreneurs and like-minded businesses from around the world. It has stayed competitive by bringing outstanding Ideas to its shelves of its nearly 1400 stores in the UK. Boots provides its partners and investors great support like

• Consumer Research
• Product testing
• Legal aids
• Product launches
• The ability to distribute the products country wide

Boots stays competitive with their competition by bringing the next best thing and to achieve this Boots has listed of innovation needs on their website. This list describes the areas and ideas which Boots is looking to improve or implement. If any person or company has successfully come up with an effective solution to any of the needs listed they can submit it online for a review.

Boots has successfully many individuals and firms bringing life changing products to its shelves one such product and an unusual one is the mouth ulcer patch which was created in collaboration with an Israeli company.

• Price The price was competitively placed for £6.80 when they were released. Although 50% of mouth ulcer sufferers do not seek treatment, this solution was hands free and the patch was also dissolvable after relief was given. This allowed boots to command a high price for this product.

• Place The product also received center piece attraction as this product was an innovative game changer in the ulcer industry. It was first of its kind and at the beginning was £26.5 billion economy therefore it had to be strategically placed in the center and given the attention it deserved.

• Promotion Boots also gave free samples in the beginning to gain customer trust of the product and also give the customers a chance to use this innovative product and when the sales slightly dropped after competitors and online shops such as Amazon started to sell similar products Boots gave the offer that “buy 1 and get the second half price” which is still available and then earned a strong footage in the mouth ulcer patch business.

How distribution is done to gain a competitive advantage
Alliance Healthcare is the backbone to Alliance Boots’ distribution services. Boots delivers goods to nearly 5700 pharmacies in the UK alone. Internationally Alliance Healthcare distributes to nearly 170,000 outlets which includes doctors, pharmacies, Boots outlets, hospitals and health centers.

Boots utilizes its resources efficiently to have an upper hand by managing transport to be maximum useful and minimizing costs by following the following ways.

• Efficient delivery routes and schedules: Boots works with its colleagues in its stores ensuring that it does not run out of stock and in finding out the most effective delivery routes and times.
• Off peak deliveries: Boots deliveries are made during off peak times so that the goods can reach stores at scheduled delivery times and also using less fuel.
• Double deck trailers: filling the trucks as much as possible so fuel costs and manpower costs can be reduced.
• Back loading: Using returning trucks from deliveries to collect supplies from suppliers or from warehouses en route.

Task 4
International Marketing vs. Domestic Marketing
When the fundamental principles of marketing are concerned International marketing does not differ from Domestic marketing. Marketing as we all know is a vital process of any business; it refers to the plans and research that is done by an individual or an organization to attract potential customers. As technology has made the world a small but better connected place businesses are progressing from supplying to local markets to supplying customers from various parts of the planet. Marketing is a tactic that is used to attract, retain and satisfy customers whether it is done on a local level or at a global scale. The fundamental principles of marketing will remain the same.

As I have mentioned in the previous paragraph both domestic marketing and international marketing follow the same guidelines of marketing. Having said that the distinguishable differences can be broken into five parts and they are

As explained earlier, both domestic as well as international marketing refer to the same marketing principles. However, there are glaring dissimilarities between the two.

• Scope – The size of domestic marketing is limited as there will be high competition on a small area and there is a limit to it whereas when international marketing is concerned the possibilities are endless.

• Benefits – More customers means more profit, a basic rule of business but there is also an added incentive that foreign currency flowing into the home country.

• Sharing of technology – Domestic marketing only uses a limited amount of technology but when international markets is concerned more technological aspects have to be input.

• Political relations – Domestic marketing has nothing to do with politics but international marketing leads to improved relationships with foreign nations.

• Barriers – International marketing faces lots of barriers like currency exchange rates, cultural differences, political relations, customs etc.... whereas domestic marketing only faces a fraction of these barriers.

Product Marketing vs. Service Marketing
Marketing a service is not the same as marketing a service. Nearly all products come with a service or multiple services. They are mostly presented as a bundle together.

When a customer purchases a laptop

• He is also buying the warranty that is included with the laptop
• He is also buying the anti-virus subscription that is included
• He is also buying the operating system that is included
• Etc...

Nevertheless there are also services like goods that are sold as purely a service like cleaning. There are many factors which makes marketing a service differ from marketing a product and some of them are as follows
• Intangibility
• Inseparability
• Non-standardization
• Perishability
• Regulation
• Word-of-Mouth


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