4 Segmentation, targeting and positioning

74 Last A Head on SpreadSegmentation, targeting and positioningObjectivesAfter reading this chapter you should be able to: describe the main methods of segmenting markets; explain how segmentation aids profitability; decide whether a given segment is sufficiently profitable to be worthtargeting; explain the purpose of segmentation ; develop ways of assessing the economic viability of segments; explain the growth of segmented markets; establish strategies for dealing with segmented markets; describe perceptual mapping; describe the main issues surrounding the positioning of for segmenting marketsINTRODUCTIONThe segmentation concept was first developed by Smith in 1957,1and is con-cerned with grouping consumers in terms of their needs. The aim ofsegmentation is to identify a group of people who have a need or needs that canbe met by a single product, in order to concentrate the marketing firm s effortsmost effectively and economically. For example, if a manufacturer produces astandardised product by a mass-production method, the firm would need to besure that there are sufficient people with a need for the product to make the exer-cise assumptions underlying segmentation are: Not all buyers are alike.

Targeting is concerned with choosing which segments to aim for. Segmentation is essentially about dividing up the market; targeting is about the practicalities of doing business within the market. The two are clearly closely linked, since the segmentation process will usually provide information as to which segments are

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