MKTG1001 · Marketing Principles
Segmentation, Targeting & Positioning
Segmentation, Targeting & Positioning (STP) is the customer-driven strategy sequence: divide the market into segments using four bases (geographic, demographic, psychographic, behavioural), select segments to target against five selection criteria, then position the brand in those customers' minds using the positioning template and benefit laddering.
This is Week 5 mid-semester material, examined through MCQs on the segmentation bases and the selection criteria, and short application questions that build a positioning statement or evaluate a candidate segment. The marks come from naming the four bases and the five criteria, writing a clean positioning statement in the template form, and using benefit laddering to justify which level of benefit becomes the core promise.
What this chapter covers
- 01Segmentation = divide the total market into groups with common needs to serve with a distinct strategy
- 02The four segmentation bases: geographic, demographic, psychographic (values/lifestyle/AIO), behavioural (benefits/usage/loyalty)
- 03Targeting levels: undifferentiated (mass), differentiated (segmented), concentrated (niche), micromarketing (local/individual)
- 04Segment-selection criteria: Measurable, Accessible, Substantial, Differentiable, Actionable
- 05Positioning = the place a brand occupies in customers' minds relative to competitors
- 06The positioning template: 'For (target), Brand X is the (frame of reference) that (unique benefit), because (reason to believe)'
- 07Benefit laddering: attribute/feature → functional → experiential → symbolic; pick the most motivating + differentiated level
- 08Differentiation and repositioning (when the position is no longer relevant or is copied)
Extended-answer (Part B style): positioning template + benefit laddering
- 3 marksMove 1 — outline the theory. The positioning template is 'For (target), Brand X is the (frame of reference) that (unique benefit), because (reason to believe)'. Benefit laddering climbs attribute → functional → experiential → symbolic; you pick the most motivating AND most differentiated level as the core promise, and the level below it as the reason to believe.
- 3 marksMove 2 — build the ladder. Attribute = 20g pea protein, no additives → Functional = sustained energy → Experiential = feel fuelled and guilt-free → Symbolic = 'fits my ethical, active identity'.
- 2 marksMove 3 — choose and write the statement. For busy, ethically-minded gym-goers, GreenFuel is the protein bar that keeps you energised through your day, because every bar packs 20g of clean plant protein with no junk. The core promise is the functional 'energised'; the reason to believe is the attribute below it.
- 2 marksMove 4 — conclude with the trade-off. For this segment the functional energy claim is both more motivating and more differentiated than the symbolic claim alone, which would risk an unbelievable, undifferentiated promise. Repositioning would be needed if rivals copy the clean-protein claim.
Key terms
- Market segmentation
- Dividing the total market into distinct groups of buyers with common needs, characteristics or behaviours, so the firm can select one or more to serve with a tailored marketing strategy. The four bases are geographic, demographic, psychographic and behavioural.
- Segmentation bases
- Geographic (region, city size, climate), demographic (age, income, gender, generation — easy and precise but 'divides rather than unites'), psychographic (values, lifestyle, AIO — activities, interests, opinions, personality) and behavioural (benefits sought, usage rate, occasion, loyalty, user status).
- Targeting levels
- How broadly the firm aims: undifferentiated (mass market, one offer for all), differentiated (several segments, several offers), concentrated (one niche served well) and micromarketing (local or individual customisation). Choice depends on resources, product variability and competition.
- Segment-selection criteria
- A worthwhile target segment must be Measurable (you can size it), Accessible (you can reach it), Substantial (large/profitable enough), Differentiable (responds distinctly to your offer) and Actionable (you can serve it). Failing any one makes the segment a poor target.
- Positioning
- The place a brand occupies in customers' minds relative to competitors and to their needs. It is created by the value proposition and communicated through the whole marketing mix, and is captured in the formal positioning statement template.
- Benefit laddering
- Climbing from a concrete attribute/feature to its functional benefit, experiential benefit and symbolic benefit. The marketer picks the level that is most motivating and most differentiated as the core promise, using the level below it as the reason to believe.
Segmentation, Targeting & Positioning FAQ
What are the four bases of segmentation?
Geographic (where customers are — region, city size, density, climate), demographic (measurable population traits — age, income, gender, generation, family size), psychographic (values, lifestyle, attitudes, interests, opinions and personality — the AIO set) and behavioural (benefits sought, usage rate, purchase occasion, loyalty and user status). Most real segments combine several bases, such as 'eco-conscious urban commuters aged 22-35'.
What are the five segment-selection criteria?
Measurable, Accessible, Substantial, Differentiable and Actionable. A target segment must be sizeable enough to measure, reachable through media and channels, large or profitable enough to be worth serving, distinct in how it responds to your offer, and one your firm can actually act on with the resources it has. If a candidate segment fails any one of the five, it is a poor target even if it looks attractive.
How do I write a positioning statement?
Use the template: 'For (target audience), Brand X is the (competitive frame of reference) that (unique benefit offered), because (reason to believe).' For example: 'For upscale families, Volvo is the car that best protects your family, because of its unrivalled safety.' Fill each slot from your STP work — the target from segmentation, the frame from the category, the unique benefit from benefit laddering, and the reason to believe from the attribute below it.
When should a brand reposition?
When its current position is no longer relevant to customers, when competitors have copied or out-positioned it, or when the marketing environment has eroded the advantage the position rested on. Repositioning changes the place the brand holds in customers' minds — often by leading on a different benefit level on the ladder — and is harder than initial positioning because you must overwrite existing perceptions.
Exam move
Memorise the four segmentation bases and the five selection criteria (MASDA — Measurable, Accessible, Substantial, Differentiable, Actionable) as the two checklists the MCQs test. For application questions, run STP in order: name a candidate segment by base, test it against all five criteria, then write a positioning statement in the exact template form. Practise benefit laddering on several brands until you can justify which level is the core promise — 'most motivating AND most differentiated' — and use the level below as the reason to believe. Link forward: the positioning you choose becomes the value the rest of the marketing mix delivers.
