Target Market and Positioning

Target Market and Positioning

What is a Target Market?

  • A target market is a set of customers sharing common needs and wants that a business decides to target.

The next issue is how you target the customers in the segments you want to compete in.

There are there different ways of targeting a market; the three Main Strategies for Targeting a Market are:


  • Mass marketing (undifferentiated)
  • Business targets the WHOLE market, ignoring segments Products focus on what customers need what in common, not how they differ
  • Segmented (differentiated)
  • Companies target several market segments within the same market.

Products designed and targeted at each segment require separate marketing plans and often different business units and product portfolios.

  • Concentrated (niche)
  • The business focuses narrowly on smaller segments or niches.


The aim is to achieve a strong market position (share) within those niches.

So we have chosen which segment to target and which customers are in those segments. We now have to decide how to compete effectively in that target market, and this concept is called the value proposition, which's the essential part of market positioning. The critical point here is always to remember that market positioning and the value proposition should be from the customer point of view, not from the business's point of view. Because ultimately, it's customers who buy products and services, and if their perspective on value is different from yours, that's tough because those guys are the decision-makers.


Market Positioning

  • After choosing the target segment - businesses need to decide how to compete in the selected segments
  • Marketing specialists call this the value proposition
  • Market position is defined by customers - the place a product occupies in customer minds relative to competing products

So the value proposition is all about the position the product takes in the market. Based on the dimensions that are important from the customer's point of view.


The Marketing (Positioning) Map

  • A market (or positioning) map illustrates the range of "positions" that a product can take in a market based on two dimensions that are important to customers

One way of mapping this position, particularly compared to the competition, is to put together what's known as a market map or a positioning map. 


Some possible "dimensions" of the market map

  • Low price - High price
  • Basic quality - High quality
  • Low volume - High volume
  • Necessity - Luxury
  • Light - Heavy
  • Simple - Complex
  • Unhealthy - Healthy
  • Low-tech - Hi-tech


What a market map or position map tries to do is to map the different positions of value propositions of products. Based around a selection of two dimensions and clearly, the chosen dimensions are subjective, as is the product's position on the positioning map. For example, we can choose to take a price and quality dimension and compare those two. That's the idea of the positioning map to try and identify where there may be some gaps in the market that can be successful. 


Positioning and Competitive Advantage

  • Customers choose products based on the value proposition
  • Providing superior value than the competition is a source of competitive advantage (if it can be sustained)
  • Various possible value differences can deliver a competitive advantage


Do not forget that positioning is the critical issue here. From the customers' perspective and what a business needs to do, it's finding a value proposition that gives a competitive advantage. This means that the product is perceived as one with a superior value from the customer's point of view. However, the customer determines value, but there are many different ways in which value can be delivered.


Possible Positioning Strategies 

  • Offer more for less
  • E.g., Aldi: good quality at low prices
  • Offer more for more
  • E.g., high-priced luxury products with prestige value
  • Offer more for the same
  • E.g., introduce new features and better performance for the same price
  • Offer less for much less
  • E.g., no-frills, low-cost flying and hotels; good quality, back to basics, and low price


The key issue here is that there's more than one way of positioning a product for success, but it's all about understanding how customers perceive value.