Chapter 6 - Segmentation, Targeting, and Positioning Flashcards
STP Steps
1.Step 1: Establish Overall Strategy or Objectives
Step 2: Segmentation Bases
Step 3: Evaluate Segment Attractiveness
Step 4: Select Target Market
Step 5: Identity and Develop Positioning Strategy
Step 1: Establish Overall Strategy or Objectives
Articulate the mission and the objectives of the companies marketing strategy clear
- The segmentation strategy must be consistent with and derived from the firm’s mission and objectives, as well as its current situation - SWOT
Step 2: Segmentation Bases
Develops descriptions of the different target market segments - and their needs, wants, and characteristics
- Helps firms better understand the profile of the customers in each segment
Distinguish customer similarities within a segment and differences
Psychographic segmentation
how consumers actually describe themselves or how they live - motives, personality, lifestyles
- Self values - are life goals, overriding desires that drive how a person lives their life, self concept, lifestyles
Behavioural
groups consumers on the basis of why they buy, how often, and how they plan to use the products or services
Occasion segmentation
groups consumers based on when they purchase or consume a product or service
Benefit segmentation
considers the benefits customers are looking for from products or services
Loyalty segmentation
strategy of investing in retention and loyalty initiatives to retain the firm’s most profitable customers
Usage rate
how often a person uses the product or service - occasional, light, regular, or heavy users
Geodemographic segmentation -
the grouping of consumers on the basis of a combination of geographic, demographic, and lifestyle characteristic
Step 3: Evaluate Segment Attractiveness
Marketers must first determine whether the target marketing is worth pursuing by using several descriptive criteria: identifiable, reachable, responsive, and substantial and profitable
Identifiable
firms must determine who is within their marker and to be able to design products or services to meet their needs - segments must be distinct from each other
Reachable
consumers must know that the product or service existits, understand what it can do for them, and recognize how to buy it
Responsive
the customers in the segment must react similarly and positively to a firms offering
Substantial and profitable
needs to measure their size and growth potential - if a market is too small or its buying power is insignificant, it will not generate sufficient profits or be able to support the marketing mix activities
Step 4: Select Target Market
Select target market - the key factor likely to affect this decision is the marketers ability to pursue such an opportunity or target segment
Targeting Strategies
- Undifferentiated targeting strategy (mass marketing) -
- Differentiated Targeting Strategy
- Concentrated (Niche) Targeting Strategy
- Micromarketing (one-to-one) segmentation
Undifferentiated targeting strategy (mass marketing) -
- if the product or service is perceived to provide the same benefits to everyone, there is no need to develop separate strategies for different groups - salt, sugar, greeting card
Differentiated Targeting Strategy -
target several market segments with a different offering for each - diversify risk, can be expensive, increase market share
Concentrated (Niche) Targeting Strategy
selects a single, primary target market and focus all its energies on providing a product to fit that markets needs
Micromarketing (one-to-one) segmentation
when a firm tailors a product or service to suit an individual customer’s wants or needs
Step 5: Identity and Develop Positioning Strategy
- positioning
the mental picture that people have about a company and its products or services relative to competitors
- The thoughts, feelings, and impressions that people have about a company and its products and brands relative to competing products, brands, or companies
Value proposition
communicates the customer benefits to be received from a product or service and thereby provides reasons for wanting to purchase it
Positioning statement
expresses how a company wants to be perceived by consumers
- Elements: target market, offering name or brand, product/ service category or concept, unique point of difference/ benefits
Positioning Methods
- value
-product attributes - benefits and symbolism
- competition
- market leadership
Value
- the relationship of price to quality is among the most important considerations for consumers when they make a purchase decision
Product attributes
position themselves with a strategy to focus on those attributes that are most important to the target market
Benefits and Symbolism
emphasis the benefits of the brand as well as the psychological meaning of the brand to consumers
Competition
firms can choose to position their products or services head-to-head against a specific competitor or an entire product/ service
Market Leadership
companies can emphasize their leadership position within their industry
Perceptual map -
displays, in two or more dimensions, the position of products or brands in the consumers mind
Ideal point
the position at which a particular market segments ideal product would lie on a perceptual map
To derive a perceptual map, marketers follow these steps
- Determine consumer’s perceptions and evaluations of the firm’s product or service in relation to competitors
- Identify the market’s ideal points and size
- Identify competitors positions
- Determine consumer preferences
- Select the position
- Monitor the positioning strategy
Brand repositioning (rebranding)
refers to a strategy in which marketers change a brand’s focus to target new markers or realign the brand’s core emphasis with changing market preferences
