The upcoming discussion will update about the difference between market segmentation and product positioning.

Difference between Market Segmentation and Product Positioning

One direct consequence of the market segmentation is ‘tar­get market’ and its related concept of ‘product positioning’. Product posi­tioning is the art of “designing, the company’s product and marketing mix to fit a given place in the consumer’s mind.” For product positioning, the ‘product differentiation’ (a new term coined by Prof. Chamberlain) is important and necessary.

Product differentiation means differentiating products in regard to physical characteristics, quality, design, colour and durability, packaging, and advertising theme and so on, so that the consumer will have different choices of the products. Product differentiation, of course, has no relation to market segmentation; but it assists in product positioning in the market segments.

Unless the task of product positioning is done well, the purpose of market segmentation will be defeated because the needs and wants of the consumers will not be fulfilled. For instances, new should new T.V. set be positioned? How should Video Cassette Recorder be positioned? How should computers be positioned? How should Hero Honda motor cycle be positioned? How should TVS Suzuki motor cycle be positioned?


How is it that these days we do not hear about ‘Jawa’ motor cycle, whereas about 15 year ago it was very common in the market? Why is it we do not see or hear much about Rajdoot or Yezdi? What went wrong with them? Do ‘Maruti Car’ company of New Delhi care for product positioning and market segmentation?

It is quite likely that this company does not care for these. The maruti car is compact and has an elegant lock but its design and spacing are not very satisfactory. If competition becomes stiff, maruti car will face declining sales and profits in all probability.

As Kotler says, product positioning is very important.

It must be based on:


(i) Specific product features,

(ii) Positioning on benefits or needs,

(iii) Positioning on specific usage occasions,

(iv) Positioning for users category,


(v) Positioning against other products, and

(vi) Product class dissociation.

On the other hand, market segmentation must take into consideration the factors like:

(i) Production costs,


(ii) Administrative costs,

(iii) Inventory costs, and

(iv) Promotion costs.