What is profitability

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Segmentation, Targeting, and Positioning   Segmentation, targeting, and positioning together comprise a three stage process. Segmentation involves finding out what kinds of consumers with different needs exist. In the auto market, for example, some consumers demand speed and performance, while others are much more concerned about roominess and safety. Generically, there are three approaches to marketing. In the undifferentiated strategy, all consumers are treated as the same, with firms not making any specific efforts to satisfy particular groups. This may work when the product is a standard one where one competitor really can’t offer much that another one can’t.

Usually, this is the case only for commodities. Note that segmentation calls for some tough choices. Thus, we need to determine which variables will be most useful in distinguishing different groups of consumers. Several different kinds of variables can be used for segmentation. Campbell’s soup, for instance, has found that Western U.

Some consumers want to be seen as similar to others, while a different segment wants to stand apart from the crowd. Another basis for segmentation is behavior. One can also segment on benefits sought, essentially bypassing demographic explanatory variables. Some consumers use toothpaste primarily to promote oral health, while another segment is more interested in breath freshening. Our choice should generally depend on several factors.