The opportunity in Segmentation, Targeting, and Positioning

In my last two posts, I first described the concept of Segmentation, Targeting and Positioning (STP) - as successfully used by Bounty to differentiate itself in a theoretically perfectly competitive market, users of paper towel. I then explained that STP can be problematic when a startup uses it. Often, a startup will mis-estimate who the target user is and how big the opportunity is. Yahoo would not exist today if the creators had first attempted to calculate the number of people it might be useful for, and intended to create something that was useful for the most number of people - the approach marketeers and MBAs often take.

Yet, on the flipside of the equation, there is an opportunity in STP for startups. What the Bounty case shows us is that you can take two identical goods and use marketing to create differentiation and usage of one product over others. There are now many areas of technology that have matured and where such an approach might allow for a new entrant. Can you imagine that: taking something that an established company is already doing, and just marketing it differently? Can this really work with Internet startups?

I think there are already some examples of this - the foremost being LinkedIn and Facebook. They are essentially the same thing: social networks. Tomorrow, I'll explore this a little further...