Segmentation, targeting, positioning

Philip Kotler, building on Wendell R. Smith · 1956

Divide the market, choose deliberately which parts to serve, then decide what you will mean to them.

Its place in the frameworkMarket Core›Target Audience

What it does

The sequence is the argument. Segmentation without targeting produces a description of everybody; targeting without segmentation is a guess; and positioning decided before either is a slogan looking for an audience. Its enduring value is that it forces an explicit act of exclusion in the middle step.

Reach for it when: Whenever the answer to who the customer is comes back as anyone who needs it.
Where it stops: It assumes segments are stable and reachable as groups. Where behaviour varies more within a segment than between segments, the whole structure describes nothing.

Wendell R. Smith, “Product Differentiation and Market Segmentation”, Journal of Marketing, 1956; developed by Philip Kotler, Marketing Management, from 1967.

Why it sits at Target Audience

Who the organisation is actually trying to reach: how they divide, what they are worth, and where they can be found.

A model is only useful when you reach for it at the right moment. This one answers a question that arises here — so it is filed here, and nowhere else. These are the working areas it serves:

SegmentationThe segmentation–targeting–positioning sequence, and the criteria that a segment be measurable, substantial, accessible and actionable.
The profileBuyer-persona research practice, and the critique of internally generated personas as projections of the team.
Segment valueCustomer lifetime value against acquisition cost, applied at segment rather than aggregate level.
Where they areMedia and channel research on reach and accessibility as a segmentation criterion in its own right.

All of Target Audience

What it touches elsewhere

Nothing in a business is decided on its own. A conclusion reached with this model at Target Audience lands in these other cores, whether or not anyone follows it there.

Business CoreWhat the audience is trying to get done is analysed in the value proposition; this object settles who and where.
Brand CorePositioning is aimed at a segment, and a position for everyone is aimed at nobody.
Marketing ChannelsWhere the audience is determines which channels are even available.
Data CoreSegment value requires the acquisition and retention data to be held at segment level.

Filed at the same place

These answer questions that arise at Target Audience too. Where they disagree with this one, the disagreement is the useful part.

PersonasA small number of specific, named, fictional people standing in for real patterns of behaviour.

Elsewhere in Market Core

These are other people’s models, named here so you can go to the source and use them properly. The Omnigoal is not affiliated with their authors and is not endorsed by them; nothing of theirs is reproduced here — no canvas, no diagram, no wording. Each is described in our own words, with the originator credited, because the framework is a place to put thinking, not a replacement for the people who did it. Model names and trademarks belong to their respective owners and are used here only to refer to the work itself.

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