BUSINESS111 Chap.6 Customers, Segmentation, Targeting and Positioning
Customers, Segmentation, Targeting and Positioning
Understanding the most critical stakeholder
Week 6 treats the customer as the stakeholder every function depends on.
The chapter explains the rational consumer decision process, how involvement lets buyers skip steps, and the influence of family, friends and reference groups.
Choosing whom to serve
It then works through segmentation on demographic, psychographic, geographic and behavioural bases, targeting through evaluation and selection, and positioning as a perception relative to competitors, with a real segmentation study used in the Week 6 workshop.
From customers to strategy
Customer analysis connects marketing to the strategy work of Week 4. Segmentation decides the competitive scope of a generic strategy, and positioning expresses the advantage the firm claims.
The chapter's practice cards check that you can keep the three stages distinct, which is where many answers lose marks.
What this chapter covers
- 01
Why everyone in a business is a marketer
- 02
Rational decisions and the role of involvement
- 03
Segmentation bases and why to combine them
- 04
Evaluating and selecting target segments
- 05
Positioning against competitors
- 06
Segmentation and Porter's competitive scope
Worked example · free
Apply STP to a small business
- 2Segment the market on more than one base.
- 2Evaluate and select a target segment.
- 2Write a positioning relative to competitors.
Key terms
- Market Segmentation
- Dividing a market into smaller groups of buyers with similar wants and needs.
- Targeting
- Evaluating potential segments and selecting those an organisation can serve best.
- Positioning
- How a target market perceives an organisation's products relative to those of competitors.
- Involvement
- The degree of personal importance and risk in a purchase, which shapes how many decision steps a buyer takes.
- Buying Centre
- The family, friends and reference groups who influence a consumer's purchase decision.
Customers, Segmentation, Targeting and Positioning FAQ
Why should segmentation use more than one base?
The Week 6 slides warn that segmenting on a single base or variable such as age gives a shallow picture of customers. Combining demographic, psychographic, geographic and behavioural bases gives a deeper understanding and lets a firm meet needs more precisely.
What are the targeting criteria?
The slides show four criteria for evaluating segments: measurability, accessibility, substantiality and practicability. Targeting then has a second step, selecting the segments the organisation will actually serve.
How does segmentation relate to Porter's strategies?
Canvas links segmentation to competitive scope. It is most visible in focus strategies that serve a niche, but broad differentiators segment too, tailoring products and advertising to distinct groups within a wide market.
Why does involvement change the decision process?
The Week 6 slides explain that buyers in a high-involvement decision move through every step in order, while low-involvement purchases skip steps. Involvement rises with personal motivation, financial risk and the influence of reference groups, and falls with habit, loyalty or impulse.
What is the buying centre?
The course uses the term for the family members, friends and reference groups who can influence any stage of a consumer's decision. Naming which influencer acts on which stage turns a description of the purchase into analysis.
Is positioning the same as advertising?
No. Positioning is the perception a target market holds of a product relative to competitors. Advertising is one way to shape that perception, but positioning also depends on the product, its price and the experience customers have.
Exam move
For a product you bought recently, write whether it was a high- or low-involvement purchase and which decision steps you skipped. Then segment its market on two bases at once and score two segments against the four targeting criteria. Write a one-sentence positioning for the winner, naming the competitor it should be compared with.
Finally, check your positioning sentence against a real competitor's advertising to see whether the two claims differ. Keep the example concrete enough that a marker could picture the customer. Practise explaining why each targeting criterion matters to a real business decision.
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