STP: Segmentation Targeting Positioning Review PDF

STP: Segmentation Targeting Positioning Mass Marketing vs STP Mass Marketing: Same marketing mix for everyone Marketing mix: 4Ps: Produce, Price, Place, Promotion ○ Undifferentiated, one for all strategy ○ Simple and efficient from the supply side Segmentation- T...

STP: Segmentation Targeting Positioning Mass Marketing vs STP Mass Marketing: Same marketing mix for everyone Marketing mix: 4Ps: Produce, Price, Place, Promotion ○ Undifferentiated, one for all strategy ○ Simple and efficient from the supply side Segmentation- Targeting- Positioning (STP) ○ Segmentation: Divide markets into distinct subsets of customers with common needs and characteristics- context, company (needs and wants) Targeting: Selecting one or more segments to align your marketing mix (what to put out to market) Positioning: Creating unique marketing mix relative to competitor offerings, potentially with help from your collaborators STP is better bc can customize 1. Segmentation (analysis) a. Segment market by segmentation variables b. Develop consumer profiles 2. Targeting (analysis) a. Evaluate market segments b. Select target segment(s) 3. Positioning a. Select and communicate positioning b. Develop marketing strategies for the target segment(s) STP & Customer Centricity - Customer Centricity in the context of STP - Aligning an entire company’s development and delivery of products and services with the current and future needs of a selected group of customers - Maximizing their long term financial value to the firm Ex of STP in product development - Cyber truck - Pickup truck market is very loyal- hard to get customers of pickup truck bc so loyal to their cars Untapped Customer Base - Performance on y - Novelty on x Segmentation: - A market segment= a group of customers who share a similar set of needs and wants - Advantages - Allow established companies to expand markets - Allow new companies to find niches - Identify groups of consumers with specific wants and needs - Reposition existing products - Determine appropriate media Segmentation Variables - Demographic - Age - Diapers, stroller - Gender - Cosmetics, personal care products - Life stage - Students: laptops - Generation - Gen z, baby boomers - Income - Mercedes benz C,E,S class - Geographic - Zip code - Region - City size  - Density Segmentation Variables - Behavioral - Usage rate - Users, nonusers, ex-users, potential users - Awareness - Brand loyalty - Osychologival - need/motivation - Personality - Perception - Involvement - Pyschographic varibale Psychographic targeting - Userful but difficult to identify and measure - Combine multiple measures associated with lifestyle - Demographic and geographic info - EX: - VALS - Psychographic segmentation - Age, income, education, level of self confidence, health - 8 segments - Innovators, thinkers, believers, achievers, strivers, experience, markers, survivors - 3 primary motivations - Ideals - Achievements - Self expression - 2 dimensions - Horizontal - Vertical Segmentation Excercise: Case 2 Study- Starbucks: STP 2: Targeting Targeting: - Evaluate each market segment’s attractiveness - Select one or more segments to serve Three Factors of Target Evaluation - Attractiveness: segment size, growth ,value of customers within the segment, stability - Compatibility: whether your company and collaborators have the ability to reach and serve the segment - Competitors: how many are they and how strong are they, would it be easy or hard to enter Targeting Strategies 4 Ps: Product, Price, Place, Promotion - Undifferentiated (Mass) Marketing - Marketing Mix → Market - Differentiated (Segmented) Marketing - Marketing Mix 1→ Segment 1 - Marketing Mix 2 → Segment 2 - Concentrated (Niche) Marketing - Marketing Mix → Segment 1 and Segment 2 - Micromarketing (Local or Individual Marketing) - Individualized or Localized Marketing Mix → individual or regular Differentiated Marketing - Conceive Pregnancy Test - Smiling baby - Next to ovulation test kits - RapidVue Pregnancy Test - Plain packaging - Next to condoms Both are manufactured by the same company and are exactly identical Concentrated (Niche) Marketing - Vegetarian + Vegan - Lactose Intolerance Micromarketing - Apple - Engrave name into product - Porsche - Customize car interior and exterior - Breezm - Customize glasses based on eyes Positioning - The act of framing the company’s image and offering in the target consumers’ minds, so it occupies a distinct and valued place in relation to competitors - Develop position concepts for each target segment - Select, develop, and communicate the chosen concept - STP → tactics or “Marketing Mix” Positioning Bases - By attribute / benefit  - By price/ quality - By use/ occasion - By product user - With respect to competitor - Emotion Competitive Advantage - An advantage over competitors gained by offering greater customer value either by having lower prices or providing more benefits that justify higher prices - Ex: whole foods , aldi Value Proposition - The full mix of benefits on which a brand is differentiated and positioned - The answer to the question “why should I buy your products or services? - Five winning value propositions Positioning Statement - A statement that summarizes company or brand positioning using the following format - “For (mainly targeted) segment, the (name of product) family offers highest weighted benefit because company’s/product’s competitive advantage Segmentation (needs and wants) (develop consumer profiles) Targeting (evaluate market segments) (select target segments) Positioning (select and communicate posting) Branding Brand Association  - Associative network - Ppl form association between elements when those elements are presented together - Brand associations - Consumers form a connection between a brand and a concept or an entity if they are presented together - Branding - Forming new associations or strengthening existing associations Neural Basis of Brand Association - McClure et al (2004) - Subjects tried coke and pepsi - Conditions- with brand vs without brand - Without brand- brain responds as it would to any tasty substance - With brand- Emotional centers of brain activated - Brands impact our experiences and perceptions at the neural level What is a product? - A product is anything that can be offered to a market that might satisfy a want or need What is a brand - Formally - Trademark for a specific product or service - A name, term, sign, symbol, design, or combination of these that identifies the maker or seller of a product service - Conceptually - A contact from the company to its customers, a promise of specific benefits, quality, value,experiences, and emotions - The feeling/ sense that customers have about a product - A relationship - How do consumers remember brands? - Nike- sport stars, clothing, shoes Letting a logo speak itself - Target brand personality Rebranding - Altering the name, design, logo, and or concept of an established company to develop a new identity Brand Value + Equity - Both tangible and intangible benefits - Creates value for customers - Help consumers identify products that might benefit them - Says something about product quality and consistency - Trust, reduced risk - Creates value for firm - Brand equity - Become basis on which a whole story can be built on product - Provide legal protection for unique product features - Help sellers Brand valuation Brand equity - The differential effect that knowing the brand name has on customer response to the product or its marketing - Having brand into product : ex chanel water bottle - The commercial value that derives from customer perception of the brand name of a particular product of service, rather than from the product or service Power of brand  - Hoyer and brown (1990) - Subjects conducted taste test of diff food/ drinks - Beer + peanut butter WOM- word of mouth