Week 4

The STP Process

• Audience Segmenting, Targeting, and Positioning combine to create the STP Process.
• Segmentation, Targeting, and Positioning are the core components.

Segmentation

• Segmenting divides the market into groups of people with similar characteristics.
• A market segmentation strategy enables a company to match customer needs and wants with its products.
• Segmentation is valuable because few homogeneous markets exist in contemporary marketing.

Bases for Segmentation

• Customer characteristics for segmentation include geographics, demographics, and psychographics.
• Demographics characteristics can be further broken down into age, gender, and social class.
• Psychographics includes lifestyles, activities, interests, and values.
• Purchase-based variables for segmentation include benefits and behavior.

Targeting the Best Audiences

• Specific communications strategies are designed through targeting.
• Targeting involves matching the audience's needs and wants.
• It positions the product to align with audience interests.
• Understanding the consumer is key to the success of any integrated marketing communications (IMC) plan.
• The ultimate goal of IMC is to influence the target audience's behavior.
• Selecting the correct target audiences is essential.

Example: Five Alive Campaign

• The target audience was young adults, 25-34 years old, specifically experiencers with a male skew.
• A situation analysis discovered a female-skewed 25-54 target audience of mothers.
• Targeted moms have stable purchase habits.
• Lots of competitors were targeting moms.
• Young adults consume mom's purchases.
• The decision is made to radically change the target to adults 25-34 years old.
• There were no immediate competitors for that demographic at that time.
• By targeting future parents, the brand could aim for head start on loyalty.
• Additional target audience characteristics include that 72% have already tried at least one product.
• About 1/3 were regular users.
• They are described as starting adult life but holding onto youth (party, travel, extreme sports)

Key Characteristics

• The target audience sees routine as highly aversive and boring.
• The target audience was cynical towards traditional marketing.
• The target audience appreciates being entertained and surprised, but especially taking risks.
• They often consume a product before and after completing sports.
• There was a doubled market share and litres sold over 5 years.
• That is compared to category dropping by 4%.

Additional Targeting Strategies

• The first strategy is to use segmentation characteristics to separate groups of prospective consumers.
• Additional descriptive variables are added until the ideal consumer group is identified.
• Adding variables narrows the market as the target audience becomes more defined.

Targeting: Demographics

• The most important demographic the characteristic that is used by marcom planners is age.
• Women account for about 85% of all consumer purchases in the United States.
• Education level dictates how promotional messages can be written, including the message’s level of difficulty.
• One's occupation is key in demographics because most people identify themselves by what they do.
• Geography is useful to marketers because they use this strategy because retailers are often tied to locations where their retailers are sold.
• Religion is key to identifying who is or is not in the market for a good, service, or idea.

Targeting and Profiling using Psychographics

• Psychographics refers to lifestyle and psychological characteristics.
• Activities, values, and interests are all included in the segmentation strategy.
• Attitudes and Opinions are also included in this strategy.
• Lifestyles can be analyzed by patterns of consumption, personal relationships, and leisure activities.

Targeting and Profiling using Behavioral Patterns

• Two ways to classify brand usage: usage rate and brand relationship.
• Usage rate can be classified as such: light, medium, or heavy
• Types of brand relationships can be categorized as innovator and adoption
• Heavy users for a product or brand typically account for most of those sales.
• "Switchers," have fairly low band loyalty and as such, can be easy to convince.

Innovation & Adoption

• The diffusion of innovation curve identifies the adoption process for new items.
• These groups include innovators, early adopters, early majority, late majority, and laggards.
• Perceived risk involves what one has to gain or lose in trying something new.

Consumer Behavior

• Consumer behavior describes how people select, purchase, use, or dispose of products.
• Consumer behavior also refers to the needs and wants that motivate these behaviors.
• Stages in the consumer decision-making process include need recognition, information search, and alternative evaluation.
• Purchase decision, post-purchase evaluation and satisfaction complete the process.
• Relevant internal psychological processes are motivation, perception, altitude formation and integration.

Other Influences on Consumer Decision Making

• Psychological influences include states of mind, needs and wants, selective perception and satisfaction.
• Motivations, attitudes and values, personality, and psychographics all influence consumer decision making.
• Social/Cultural Influences include culture, social class, reference groups and family.
• Demographics also fit in that category.

Consumer Behaviors

• Behavioral Influences include quantity usage, brand relationship, and innovation.
• The traditional view involves need recognition, information search, and evaluation of alternatives.
• Choice and post-purchase evaluation then finish the customer selection.
• Involvement means personal relevance.
• Higher involvement is when purchases entail social or financial risk.
• Purchases that involve little to no risk are considered lower involvement.
• Culture is the distinctive customs, values, beliefs, knowledge, art, and language of a society or community.
• These values and concepts pass from generation to generation and form the basis for behaviors and practices.
• Culture is made up of both tangible and intangible items.
• Norms are a culture's boundaries for “proper" behavior.
• Values are the source of norms and represent underlying belief systems.
• International or global marketing programs must consider multicultural differences to avoid communication missteps.
• National culture impacts consumption patterns and must be factored into marketing and advertising strategies.
• Localizing a campaign may be needed to appeal to audiences in different cultures.

Rokeach's 18 Terminal Values

• Rokeach’s 18 terminal values include True friendship, Mature love, and Self-respect.
• Also included Happiness, Inner harmony, Equality, and Freedom
• Also included Pleasure, Social recognition, Wisdom, and Salvation.
• Family security, National security, and A sense of accomplishment are included also.
• A world of beauty, A world at peace, A comfortable life, and An exciting life are the last 4 listed.
• Subcultures are groups of people within a culture with shared value systems based on common life experiences and situations.
• Social classes are society's relatively permanent and ordered divisions.
• Members share similar values, interests, and behaviors.
• It is measured as a combination of ones occupation, income, education, wealth, and other variables.

Social Influences

• Groups and Social Networks can consist of Reference groups, Opinion leaders, and Word-of-mouth influence.
• Influencer Marketing and Online Social Networks are also included.
• Brand communities are groups of people devoted to a particular brand like Harley-Davidson motorcycle owners.
• Reference groups provide information, serve as a means of personal comparison, and offer guidance.
• Family is the most important consumer-buying organization in society.

Psychological Influences

• Needs are motivated by basic survival instincts.
• Wants are what consumers desire
• A motive is an internal force that stimulates consumers to behave in a certain way.
• Motivation roles include: providing energy to engage in effortful behavior or thought and adding value or importance to a product.
• Functional motives are utilitarian and involve tangible costs or benefits.
• Symbolic motives can be personality-based (self-esteem, image).
• Social needs (belonging, relationships) and hedonic/experiential (just plain fun) are also symbolic.

Satisfaction & Strategic Planning

• Satisfaction is the gap between our expectations and our actual experience with a product or experience.
• Cognitive dissonance refers to a conflict between thoughts and this creates a state of tension.
• Need recognition comes from the discrepancy between ideal and actual states.
• These are considered need recognition and opportunity recognition.
• Strategic planning includes the following action steps:
  • Identify a problem that can be solved with communication
  • Determine objectives
  • Decide on the strategies
  • Implement the tactics

Objectives, Strategy, Tactics

• Objective is what you want to accomplish.
• Strategy is how to accomplish the objectives.
• Tactics are the actions that realize the plan.
• Planning involves coordinating a set of cascading objectives and strategies.
• Business objectives and strategies are achieved through planning at the level of marketing (and other marketing mix areas).
• Marketing objectives and strategies direct brand communications/IMC programs.

Brand Communication/IMC Plan

• The Brand Communication/IMC Plan outlines communication activities to deliver on the business and marketing objectives.
• The marcom planner's goals are answering "Who, What, and Where?"
• The goal is to match the right audience to the right message and present the message in the right medium to reach that audience.
• Strategies are based on accurately targeting an audience that will respond to a particular message.
• Research-based knowledge identifies differences among specific groups of consumers.

Brand Identity

• A brand is an integrated perception that includes pieces of information, feelings, and personal experiences.
• Brand identity must be distinctive and familiar in terms of name, logo, colors, typeface, design, and slogan.
• Brand personality and liking should have human characteristics like loving, trustworthy, and sophisticated.
• Brand position and leadership is the soul or essence of the brand and stands for something meaningful to consumers.
• Key brand concepts:
  • Brand image is the mind's impression customers constructed for for a product.
  • Brand promise and brand preference. comes from expecting a brand to meet expectations
  • Brand loyalty is a connection built over time that leads to repeat purchases.
• A position is how consumers define the product or brand relative to its competitors.
• A position must be based on a particular feature or attribute that is important to the consumer.
• First, relevant and determining product features of competitors must be identified.
• Key product differences are identified, called "Product differentiation."
• For "parity products", marketers often promote intangible, or psychological, differences through branding.