MARKETING 101: Marketing Segmentation, Targeting, and Positioning

0:00 hey guys adam here and in this marketing 101 video i'm going to cover segmentation targeting and positioning also known as the stp model of marketing and i'm going to break each one down so you'll be able to easily understand them and apply them to whatever business you choose so let's get to it segmentation targeting and positioning are three of the most valuable and profitable and important marketing terms that you could ever hope to learn so by learning them now well they're going to pay off for years to come in fact these principles are so important and so foundational to your overall marketing success that i use them regardless of whether i'm working with a small business all the way up to a billion dollar company yes they're that important and seeing as they build on each other

0:45 starting with segmentation moving on to targeting and ultimately positioning well let's start right at the top with segmentation when it comes to marketing and to doing business today well no business no company could ever possibly hope to reach or to serve every single person on the planet first of all trying to market to and trying to reach every single person out there well that would just be outrageously expensive not to mention the fact that the vast majority of people out there are simply not the right fit for your business this is why one of my biggest pet peeves when it comes to marketing marketing strategy is when i ask a potential client or a potential student about who their target market is and they respond with something like everyone or people with money i'm sorry that's just too broad this is why one of the very first things you need to do

1:31 whenever you launch a new marketing campaign or marketing strategy or work through a marketing plan is to segment your market to take a look at your overall market and to start to classify or categorize or segment the different groups of people in order to find the ones that are right for you segmentation understands and appreciates the fact that different customers are going to have different needs and perceptions and preferences and so it segments them accordingly basically to simplify this even more there's a lot of different people out there with a lot of different interests a lot of different attitudes and a lot of different desires and wants and dreams and goals so it doesn't make sense to market to everybody in the exact same way also it doesn't make sense to market to everybody rather you want to be selective and the first way to do this is to

2:18 segment them and to categorize them in different buckets depending on different attributes or characteristics that they have in common now when it comes to segmenting your market you've got a number of different ways you can do it one of the most common ways is of course demographic segmentation this is where you simply take a look at the overall market that you could serve and you group people according to their age or their gender or their income or their occupation but you're not limited to just demographic segmentation you also have geographic segmentation which takes a look at people and puts them in different groups depending on their city or state or province or country of course you can take it a step further as well with behavioral segmentation taking a look at what stage of the customer journey they're on or what benefits that the customer is actually after and you have

3:03 psychographic segmentation which is where you group people according to their values or their attitudes or different lifestyles that they're a part of like i mentioned before most companies pretty much all companies simply can't serve every single person out there which means that you get to decide which segment which part of the population which group or category your business is best positioned to serve basically you get to decide which segment you want to go after which leads me perfectly to my next point targeting if segmentation is carving up the market into different groups or categories or segments then targeting is simply selecting or choosing which segment you want to go after targeting answers the question who do you want to serve and when it comes to marketing this is a very very important question you see the key

3:49 here is to find the segments or the parts of the market that are most attractive to you as a business and essentially find the ones that you're going to be best positioned and best able to serve in order to get them the best results possible in a way that you actually enjoy serving them so when you're taking a look at different segments and you're trying to decide which one to target you do want to take a look at that overall business picture and really try to dial in that exact segment that's going to be able to achieve maximum value from the services or from the products from the offer from the business that you provide also don't be afraid to ask yourself the question who do you most enjoy serving because the reality is is that there's simply going to be certain segments of the population that are more fun to work with now if you already have a business then the easiest thing to do by far is simply to take a look at your

4:35 top 20 of your customers find the ones who are providing the most revenue and the most value back to your business find the ones who are complaining the least and are the happiest with your service and provide you the most referrals and the best testimonials then you want to look for common characteristics among them do they fall into a certain age range do they have a certain job title or occupation or do they live in a certain city or state or neighborhood or maybe there's no common trend among geographic or demographic segmentation that is they don't fall within a certain age range or live in a certain city in that case you can move on to psychographic segmentation and start taking a look at well maybe they all love dogs or the great outdoors or some kind of adventure or photography or travel or something like that or

5:21 if you have enough customers to choose from well you can get laser focused and choose elements from demographic and geographic and psychographic hand behavioral segmentation in order to craft the perfect target and the perfect market that you're best positioned to serve the beauty and the importance of targeting though is that it allows you to go really deep with a very specific and segmented part of the market which means you don't have to try to appeal to everyone and be forced to water down your message in the process nope by being specific and laser focusing in really identifying that target you want to serve you can speak directly to their wants and their needs and their dreams and their desires and their fears and their problems and their pains and their frustrations and when you do this your business becomes more relevant and more relatable than ever before as a side benefit you can also dramatically

6:07 decrease your marketing and advertising budget because no longer you trying to reach everyone you're just trying to reach a few people the people that actually matter but deciding on a target that you want to focus on isn't enough you also need a way to stand out from the competition and differentiate yourself which leads me to my next point positioning all right full disclosure positioning is one of the more complicated and confusing terms when it comes to marketing because it has less to do with the product or the service that you're selling and everything to do with how you position the product or service in the minds of your customers i appreciate that sounds crazy so let me explain basically what positioning does is reframe or re-categorize or reposition your brand your product your

6:54 service in the minds of your customers against some other kind of competitor or category or business that you're competing against still sounds crazy hey let's take it a step further positioning is what place in your customers mind your business holds it's what your customers think and feel about your business rather than your business or product or service itself in other words when someone thinks about your business do they think about it as something reliable or expensive or fast or luxurious or do they think of it as cheaper or budget-friendly or economical or whatever and when it comes to positioning your business your product or your service well the best way to do it is to position it against another competitor in your space

7:40 for example when 7up tried to break into the cola market and compete against the other colas well they position themselves as the unkola basically here's my competitor here's how i'm different and here's the position that i want to occupy in your mind avis the car rental company successfully positioned themselves as the number two car rental company saying you should go with them because they try harder bmw tries to position themselves as the ultimate driving machine rather than say a luxurious car or a family-friendly car or an economical car or anything like that nope they've chosen the position that they want to take as the ultimate driving machine and apple has positioned itself as the computer or the software or the hardware company for creatives they've positioned themselves against pc and essentially against microsoft as

8:26 the all work no fun at least according to their marketing now ideally when it comes to positioning you want to stand out and really find a place of your own which means that to talk about positioning i need to touch briefly on the marketing concept of differentiation if positioning is how your customers perceive or feel about your product or your service or your business or your offer then differentiation is the set of characteristics or features that really make it different than the competition and in today's hyper-competitive world being different is important really important otherwise your brand your business your product your service well it'll just get lost in the noise so how do you differentiate your product to in order to achieve that desired position in your customer's mind well you got a couple different ways the first and most obvious way is something known as

9:12 product differentiation where you simply change the features or improve the performance but you also have service differentiation where you provide genuinely faster better or a higher quality of service you have relationship differentiation where you provide more customer touch points or better customer service or something like that or you have my personal favorite image differentiation this is where you literally alter or change or influence the perception that a customer has about your brand or about your business through the use of strategic marketing and branding and communication this is why the next thing you're going to want to do is check out the video i have linked up right here on introduction to marketing so make sure to check that out now and i'll see you in the episode marketing helps people solve their problems by clearly defining and delivering solutions and really explaining the

9:58 benefits of those solutions so they can get better you