Segmentation, Targeting and Positioning

Segmentation, targeting and positioning together comprise a three stage process. We first (1) determine which kinds of customers exist, then (2) select which ones we are best off trying to serve and finally (3) implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way.

Segmentation
This is made up of people or organisations with one or more characteristics that cause them to demand similar product and /or services based on the qualities of those products such as price and function. It involves finding out different the kinds of consumers and the different needs that exist between them. In the auto market, for example, some consumers demand speed and performance, while others are much more concerned about roominess and safety. In general, it holds true that “You cannot be all things to all people”, and experience has demonstrated that firms that specialise in meeting the needs of one group of consumers over another tend to be more profitable.

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 cannot offer more than another one can.

Targeting
Targeting is the second stage of the segment Target position process. After the market has been separated into segments, the marketer will select a segment or series of segments and 'target' it/them. Resources and effort will be targeted at the segment. Target marketing involves breaking a market into segments and then concentrating your marketing efforts on one or few key segments. Target market can be the key to a small business's success. Target marketing is makes the promotion, pricing and distribution of your products and/or services easier and more cost effective. Target marketing provides a focus to all of your marketing activities.

Positioning
A product can be positioned based on 2 main platforms namely The Consumer and The Competitor. When the positioning is on the basis of Consumer, the campaigns and messages are always targeted to the consumer themselves. The other kind of positioning is on basis of Competition. These campaigns are targeted towards competing with other players in the market.

Dettol television commercials always concentrate on advertisements, which show that this product would give you more protection, than the others.

Posting by product attributes and benefits:
Associating a product with an attribute, a product feature or a consumer feature. Sometimes a product can be positioned towards two or more attributes simultaneously. The price/ quality attribute dimension is commonly used for positioning the products.

A common approach is setting the brand apart from competitors on the basis of the specific characteristics or benefits offered. Sometimes a product may be positioned on more than one product benefits; marketers' may attempt to identify salient attributes.

Below is a slide show demonstrating a step by step process of segmenting, targeting, and positioning 
http://www.slideshare.net/mehmetcihangir/segmentation-targeting-and-positioning-presentation