Strategies for Market Targeting and Positioning

Walk into any Indian supermarket and you will find at least five brands of toothpaste, ten types of soap, and shelves of shampoo sachets priced under ten rupees. Every one of these brands cannot possibly appeal to every customer in the same way. This is where market targeting and positioning come in. Once a company has segmented the market, it must decide which segments to serve and how it wants to be seen in the minds of those customers. Get this wrong, and even a good product can disappear into the noise. Get it right, and a brand can build a lasting place in a customer’s head, not just their shopping cart.

From segmentation to strategy 🔗

Market targeting is the second step in what marketers call the STP process: segmentation, targeting, and positioning. Segmentation breaks a large, diverse market into smaller groups with shared needs. Targeting is the decision that follows: evaluating those segments and choosing which ones are worth pursuing. A company rarely has the resources or the reason to chase every segment at once, so it must decide how much of the market to cover and how precisely to serve it. This decision shapes everything that follows, from product design to pricing to advertising.

Three classic approaches to market targeting 🔗

Businesses typically choose from three broad targeting strategies, sometimes extended to a fourth for highly personalised, technology-driven marketing.

Undifferentiated marketing: one offer, mass appeal 🔗

In undifferentiated marketing (also called mass marketing), a company ignores segment differences and designs a single offering for the entire market. The idea is to focus on what buyers have in common rather than what sets them apart. This approach works best when the product is fairly standard and serves a widespread need. Undifferentiated marketing suits uniform, everyday products where design variation matters less than availability and price.

Patanjali built much of its early FMCG growth this way. Its Ayurvedic personal care and food products were pitched at almost the entire Indian household market rather than a narrow slice of it, using a Swadeshi, natural-living positioning that appealed broadly across age groups and income levels. The strategy kept marketing costs low and distribution wide, though it also meant the brand struggled to speak differently to, say, a college student in Chennai versus a homemaker in Haryana.

Differentiated marketing: many offers, many segments 🔗

A differentiated marketing strategy involves targeting several segments and designing a separate offer, and often a separate marketing mix, for each one. Automobile companies are a textbook example. Maruti Suzuki does not sell one car; it sells the Alto to price-sensitive first-time buyers, the Swift to younger, style-conscious drivers, and the Ciaz to buyers wanting a premium sedan experience. Each model has its own pricing, features, and advertising tone, even though they come from the same manufacturer.

This approach usually creates higher total sales and stronger brand loyalty within each segment, but it also increases production, inventory, and marketing costs, since the company is essentially running several smaller campaigns at once.

Concentrated marketing: owning one niche 🔗

With concentrated marketing, also called niche marketing, a company puts most of its resources behind a large share of one or a few smaller segments rather than a small share of a large market. This is a common route for companies with limited resources, since it lets them build deep expertise and a strong reputation within a focused space.

Nykaa is a useful Indian example. Rather than trying to be a general e-commerce platform, it concentrated on beauty and personal care, and specifically on the growing “masstige” segment of aspirational, quality-conscious Indian consumers. That focus paid off: at the time of its IPO, analysts noted Nykaa held close to 35 percent of the online beauty and personal care market, a dominance that would have been far harder to achieve as a generalist retailer. Concentrated marketing carries higher risk too, since the company’s fortunes are tied closely to one segment’s demand.

A quick comparison 🔗

What decides the right strategy 🔗

There is no universal “best” targeting strategy. The right choice depends on a few practical factors. Company resources matter first: a business with limited capital often has no real option but concentrated marketing, since it cannot afford to run several segment-specific campaigns. Product characteristics matter too, since uniform products fit undifferentiated marketing while products with design variation suit differentiated or concentrated approaches. The stage of the product life cycle also plays a role, as new products are often launched with a single version before variants are introduced later. Finally, market variability and competitors’ own strategies influence the decision. If rivals are already targeting several segments effectively, an undifferentiated approach may struggle to compete.

What positioning actually means 🔗

Once a company knows which segment or segments it is targeting, it has to decide how it wants to be perceived by the people in that segment. This is positioning. It is not about the physical product alone but about the place the brand occupies in the customer’s mind relative to competitors. Positioning refers to a company’s ability to influence how consumers perceive a brand or product compared to rival offerings, and it is achieved through deliberate choices around attributes, price, quality, and communication.

Positioning is often described as the final stage of the STP process. It involves creating a clear, differentiated position for the brand after segments have been chosen and a target has been selected, and it becomes the guiding logic behind the rest of the marketing mix, including product design, pricing, and promotion.

Building a position that sticks 🔗

Points of difference and points of parity 🔗

Good positioning rests on two kinds of attributes. Points of parity are the baseline features a product must have just to be considered credible in its category, such as a toothpaste that actually prevents cavities. Points of difference are the attributes that genuinely set a brand apart, such as a specific ingredient, price advantage, or emotional association. The attributes chosen for differentiation must matter to the target segment. A feature that the company finds impressive but the customer does not care about will not move the needle.

The unique value proposition 🔗

At the centre of positioning is the unique value proposition (UVP), a clear statement of the specific benefit a brand delivers that competitors do not, or do not deliver as well. Patanjali’s UVP centred on affordable, natural, Ayurvedic products rooted in Indian tradition. Nykaa’s centred on guaranteed product authenticity and curated discovery in a market where counterfeit beauty products were common. Neither UVP is complicated, but both are specific enough to be remembered and different enough to matter.

Seeing positioning on a map 🔗

Marketers often use a perceptual map to visualise positioning. This is a simple two-axis chart, typically plotting attributes like price and quality, on which a brand and its competitors are placed based on how consumers perceive them. Perceptual maps help marketers see how a brand’s position compares with competing offerings and reveal gaps in the market that a new or repositioned product could occupy.

Common positioning strategies 🔗

Companies typically position their products using one or a combination of these approaches:

• Attribute or benefit positioning: Emphasising a specific feature or the benefit it delivers, such as a car brand known for safety.
• Price-quality positioning: Associating the brand with either premium quality or unbeatable value, rather than sitting in the middle.
• Use or application positioning: Linking the product to a specific occasion or purpose, such as an energy drink positioned for exam-time alertness.
• Competitor-based positioning: Defining the brand explicitly against a rival, framing it as better, cheaper, or different in a stated way.
• Product class positioning: Associating the product with, or deliberately distancing it from, an entire product category.

Why targeting and positioning must work together 🔗

Targeting without positioning leaves a company selling into the right segment with a blurry message. Positioning without clear targeting leaves a company with a sharp message aimed at nobody in particular. The two decisions have to align. Nykaa’s concentrated targeting of aspirational beauty consumers only worked because its positioning around authenticity and curation spoke directly to that segment’s specific anxiety about counterfeit products. Patanjali’s undifferentiated targeting worked because its Swadeshi, natural-living positioning was broad enough to resonate across the wide audience it was chasing. When targeting and positioning are consistent, every part of the marketing mix, from packaging to advertising tone, reinforces the same idea in the customer’s mind.

What do you think? If you were launching a new product in a crowded Indian category like snacks or skincare, would you go for the safety of undifferentiated marketing, the reach of differentiated marketing, or the focus of concentrated marketing? And once you picked a segment, what single attribute would you want your brand to own in that customer’s mind?

References

1. https://www.geeksforgeeks.org/marketing/market-targeting-strategies/
2. https://iide.co/case-studies/patanjali-marketing-strategy/
3. https://www.business-standard.com/article/markets/beauty-startup-nykaa-s-ipo-attracts-bids-of-nearly-33-billion-121110101192_1.html
4. https://corporatefinanceinstitute.com/resources/management/market-positioning/
5. https://www.perceptualmaps.com/product_positioning/