Topic 3 - Segmenting, Targeting and Positioning Financial Services

Segmenting is the process of dividing a potential market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix.

Process in segmenting;

1. Identify - Groups of key customers

2. Target - Those who offer value

3. Position - Their minds through the use of the 7 P's (these were detailed in an earlier post)

A marketing segment is a relatively homogenous group of customers with similar characteristics, wants or needs that is likely to respond similarly to a given marketing mix. Segmenting allows a group to understand customers better and aids in more efficient resource allocations which leads to a more effective strategic focus. They need to be homogenous within and heterogeneous between. they need to be measurable, substantial and actionable numbers

Segmenting can be done by:

- Geographic

- Demographic and socio-cultural

- Psychological or psychographic

- Behavioural or attitudinal

There are also several options for targeting:

- Concentration on a single segment (niche)

- Selectively specialising

- Specialising by product

- Specialising by market