stp (mktg)
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PRINCIPLES OF MARKETING
Market Segmentation, Targeting, and Positioningfor Competitive Advantage
Steps in STPSteps in STP
1. Identify Basesfor Segmenting the Market
2. Develop Profilesof Resulting Segments
3. Develop Measuresof Segment Attractiveness
4. Select TargetSegment(s)
5. Develop Positioningfor Each Target Segment
6. Develop MarketingMix for Each Target Segment Market
Positioning
MarketTargeting
Market Segmentation
Step 1. Market SegmentationLevels of Market SegmentationStep 1. Market SegmentationLevels of Market Segmentation
Mass MarketingSame product to all consumers
(no segmentation)
Mass MarketingSame product to all consumers
(no segmentation)
Segment MarketingDifferent products to one or more segments
(some segmentation)
Segment MarketingDifferent products to one or more segments
(some segmentation)
Local marketingProducts to suit the tastes of individuals or locations
(complete segmentation)
Local marketingProducts to suit the tastes of individuals or locations
(complete segmentation)
Niche MarketingDifferent products to subgroups within segments
( more segmentation)
Niche MarketingDifferent products to subgroups within segments
( more segmentation)
Local marketingProducts to suit the tastes of individuals or locations
(complete segmentation)
Local marketingProducts to suit the tastes of individuals or locations
(complete segmentation)
Local Marketing
Tailoring brands/ promotions to local customer groups, i.e
Sears
Individual Marketing
Tailoring products and programs to the needs of
individual customers, i.e. Dell
Step 1. Market SegmentationBases for Segmenting Consumer Markets
Step 1. Market SegmentationBases for Segmenting Consumer Markets
Geographic
DemographicAge, gender, family size and life cycle, or income
PsychographicSocial class, lifestyle, or personality
BehavioralOccasions, benefits, uses, or responses , attitude
Nations, states, regions or cities
Descriptive
Age and Life-Cycle Segmentation
P&G targets kids with Crest Kid’s Cavity Protection toothpaste. It’s gentle on tooth enamel and has “fun- filled sparkles and sparkle fun flavor just for kids.”
Psychographic Segmentation
When Honda markets its ACTIVA , it appeals to the rebellious, independent women & girls.
Using Multiple SegmentationBases: GeodemographicsUsing Multiple SegmentationBases: Geodemographics
Step 1. Market SegmentationBases for Segmenting Business Markets
Step 1. Market SegmentationBases for Segmenting Business Markets
Basesfor Segmenting
BusinessMarkets
Basesfor Segmenting
BusinessMarkets
DemographicsPersonalCharacteristics
SituationalFactors
OperatingCharacteristics
PurchasingApproaches
Step 1. Market SegmentationBases for Segmenting International Markets
Step 1. Market SegmentationBases for Segmenting International Markets
Political/Legal
Political/Legal
Cultural Cultural IntermarketIntermarket
Economic EconomicGeographicGeographic
Industrial MarketsIndustrial Markets
Step 1. Market SegmentationRequirements for Effective Segmentation
Step 1. Market SegmentationRequirements for Effective Segmentation
• Size, purchasing power, profiles of segments can be measured.
• Segments must be effectively reached and served.
• Segments must be large or profitable enough to serve.
Measurable Measurable
AccessibleAccessible
SubstantialSubstantial
DifferentialDifferential
ActionableActionable
• Segments must respond differently to different marketing mix elements & actions.
• Must be able to attract and serve the segments.
• Choose a partner and make a list of the market segments to which you belong. What segmentation variables did you take into consideration when you placed yourself into those segments?
Interactive Student Assignment
Step 2. Market TargetingEvaluating Market Segments
Step 2. Market TargetingEvaluating Market Segments
• Segment Size and GrowthSegment Size and Growth– Analyze sales, growth rates and expected profitability.
• Segment Structural AttractivenessSegment Structural Attractiveness– Consider effects of: Competitors, Availability of Substitute
Products and, the Power of Buyers & Suppliers.
• Company Objectives and ResourcesCompany Objectives and Resources– Company skills & resources relative to the segment(s).
– Look for Competitive Advantages.
Step 2. Market TargetingMarket Coverage Strategies
Step 2. Market TargetingMarket Coverage Strategies
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing
Mix
CompanyMarketing Mix 1
CompanyMarketing Mix 1
CompanyMarketing Mix 2
CompanyMarketing Mix 2
CompanyMarketing Mix 3
CompanyMarketing Mix 3
MarketMarket
A. Undifferentiated Marketing
B. Differentiated Marketing
C. Concentrated Marketing
Step 2. Market TargetingChoosing a Market-Coverage Strategy
Step 2. Market TargetingChoosing a Market-Coverage Strategy
Company Resources
ProductVariability
Product’s Stagein the Product Life Cycle
Market Variability
Competitors’Marketing Strategies
Step 3. Positioning for Competitive AdvantageStep 3. Positioning for Competitive Advantage
• Positioning Positioning – the act of designing company offering & image to occupy distinctive place in the mind of target market
• Points -of -difference (PODs)– Attributes or benefits consumers strongly associate with brand
» E.g.- FedEx (overnight delivery), Nike (performance)
• Points-of-parity (POPs)– Associations that are not necessarily unique to brand but may be
shared with other brands
Developing Competitive DifferentiationDeveloping Competitive Differentiation
ProductProduct ServiceService
PersonnelPersonnel ImageImage
Areas for CompetitiveDifferentiation
Areas for CompetitiveDifferentiation
ServicesDifferentiation
(e.g., speed, convenience, careful
delivery)
Product Differentiation
(e.g., consistency, durability, reliability,
repairability)
People Differentiation
(e.g., hiring, training better people than
competitors)
ImageDifferentiation
(e.g., convey benefits and positioning)
ChannelDifferentiati
on
Identifying Possible Competitive Advantages
ImageImage
symbols
media Events
Atmosphere
Steps to Choosing and Implementing a Positioning Strategy
Steps to Choosing and Implementing a Positioning Strategy
• Step 1. Identifying a set of possible competitive advantages: Competitive Differentiation.
• Step 2. Selecting the right competitive advantage.
• Step 3. Effectively communicating adn delivering the chosen position to the market.
Selecting the Right CompetitiveAdvantagesSelecting the Right CompetitiveAdvantages
Criteriafor
DeterminingWhich
Differencesto
PromoteAffordableAffordable SuperiorSuperior
ProfitableProfitable
PreemptivePreemptive
DistinctiveDistinctive
ImportantImportant
CommunicableCommunicable
Positioning Errors
• Under positioning:– Failing to really position the company at all.– E.g.
• Over positioning:– Giving buyers too narrow a picture of the company.– E.g.
• Confused Positioning:– Leaving buyers with a confused image of a company.– E.g.
• Doubtful positioning:– Buyers may find hard to believe the brand claims in view of product
features , price or manufacturer.– E.g.
Step 3. Positioning for Competitive Advantage: StrategiesStep 3. Positioning for Competitive Advantage: Strategies
Against aCompetitor
Against aCompetitor
UsageOccasions
UsageOccasions
Away fromCompetitors
Away fromCompetitors
ProductAttributes
ProductAttributes
ProductClass
ProductClass
BenefitsOffered
BenefitsOffered
UsersUsers
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