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Market Segmentation, Product/Service Differentiation and Positioning
Market segmentation: the process of breaking down a whole market into smaller parts in order to satisfy particular customers’ needs or wants
- May be based on geographic, demographic, psychographic or behavioural aspects
Product/service differentiation: differentiation involves providing greater customer value and making the business’s product stand out from that of its competitors.
- Examples – having a wide range of product models, design, packaging, after sales service, customer service, warranty, advertising, etc.
Product positioning: the distinct image or identity of a product that would set it apart from its competitors.
- Examples – positioning by benefit, price, quality, direct comparison (e.g. Coke/Pepsi)
Extract from Business Studies Stage 6 Syllabus. © 2010 Board of Studies NSW.