What do the terms ‘segmentation’ and ‘positioning’ mean?

Positioning is the place your product (and possibly your business as a whole) occupies in your customers’ minds with reference to their needs – as well as in relation to your competitors.

The goal is to position the attributes of a product or service so that they are viewed as distinctive and positive by customers. For example, some washing powders are positioned as being able to wash whiter, some as being gentle on the skin, and so on.

In order to position a product, you need to:

  • Identify customer groups – a process called ‘segmentation’
  • Select specific groups who will respond in a certain way – ‘targeting’
  • Develop and promote a product which delivers the relevant benefits in an appropriate way to those specific customers groups – developing the marketing mix.

‘Customers’ business advice article: Crown Copyright © 2002-2013

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