Blog Entry #3: Segmentation, Target, Positioning, and Differentiation

Class 5
2/2/2014

During class this week, four main topics were covered: Segmentation, Target, Positioning, and Differentiation. Our first task before class on Monday was to watch a video by Malcolm Gladwell and read the HBR article Market Segmentation, Target Market Selection, and Positioning. My takeaways from both the article and video are as follows:


Malcom Gladwell: Choice, Happiness, and Spaghetti Sauce

Howard Moscowicz was looking for the perfect pepsi, but he should have been looking for the perfect “pepsis.” He made a name for himself though, in Campbell’s soup, specifically with Prego. Prego was struggling to compete against Ragu, a lesser spaghetti sauce. He made 45 varieties of spaghetti sauce. He took all of these sauces, tested them out all over the country and had people rate their feelings on spaghetti sauce. There are people who like plain sauce, extra chunky sauce, and spicy sauce.

1. He fundamentally changed the way food industry makes people happy. He’s made the realization that people don’t know what they want.
2. He also introduced the notion of horizontal segmentation. In terms of mustard, there are only different kinds of mustard that suite different kinds of people. There is no good mustard and bad mustard hierarchy.
3. Howard also confronted the notion of the platonic dish. There is no “one right way” to make a dish. The “authentic way” is not necessarily “the right way."
4. In embracing the diversity of human beings, we will find a sure way to happiness.

I greatly enjoyed this video!

Market Segmentation, Target Market Selection, and Positioning
This article was fairly straightforward and introduced the concepts of market segmentation, target market selection, and positioning. Market Segmentation helps divide consumers into groups of potential customers based on their behaviors and needs. The segments should clearly differ from one another but also show a great deal of homogeneity as well. 

To exemplify segmentation, the article used nonprescription drugs, and explained how one group chose gentleness, while another chose effectiveness. I think we can use the idea of segmentation based on usage for sunscreen. Sunscreen can be evaluated along three different dimensions: sunblockage, gentleness and scent. By looking at the consumer, we can tell what kind product to take to market to meet their needs. For example: for a baby, a mother will be most concerned with blocking the sun and keeping their child from breaking out. For people without sensitive skin, they may opt for the best smelling lotion that still blocks the sun. For a teenager trying to get their mom to stop bothering them about lotion, they may choose one that won't cause breakouts and smells nice. 

After we've segmented the market, we need to select which market is best. The objective should be to maximize firm profit. To do so, we must understand differentiation which can be done through data collection. Once the target market has been selected, the product has to get there. A comprehensive understanding of positioning can help complete the sales cycle. Moscowicz would be a good person to consult here!

That sums up this week's post! Stay tuned for an in depth look on the Fashion Channel Case coming up soon.