Chapter 9 STP Flashcards
2 steps to segmentation
Step 1 establish overall strategy
Step 2 choose a segmentation method
STP
Segmentation
Targeting
Positioning
Example of segmentation methods
Geographic Demographic Psychographic Benefits Behavioral
Geographic segmentation
Based on he here someone lives
Example subways menu items will vary by geographic location
Demographic segmentation
Age gender education etc
Easy to identify
Psychographic
How consumers describe themselves how people occupy their time
How to determine psychographics
Through self value aka drive and goals
Self concept image of oneself
Lifestyle way we live
Value and lifestyle surveyVALS
Consumers can be classified into eight segments which includes resources level of education etc.
Benefit segmentation
Groups consumers based on benefits they derive from products and services
Behavioral segmentation
How one uses the Product or service
Occasion
Part of behavioral segmentation example men’s warehouse sell tuxedo for special occasion
Loyalty segmentation
People exclude competitors because they are loyal loyalty segmentation involves retaining these loyal customers example united airlines flyer miles
Step 1 of STP
Articulate vision or objectives consistent with firms mission and SWOT
Geodemographic segmentation
Combines geography and demography and lifestyle characteristics to classify consumers
PRIZM
Potential rating index by zip market uses detailed demographic data and habits of people within a tract
2 steps to targeting
- Evaluate segment attractiveness.
4. Select target market
Step 2 STP
Determine the segmentation method that will be used e.g demographics lifestyle etc.
Step 3 STP
Evaluate segment attractiveness and whether segment is worth pursuing
Criteria that determines segment attractiveness
Is the segment Identifiable? Substantial? Reachable? Responsive? Profitable ?
Identifiable
Identify who is within their market do not overlap
Substantial
After identifying potential markets measure their size too small equals too small profits
Reachable
Consumer knows the product exists!!!
Responsive
Consumer must react positively to the firms offering
Profitable
Assess potential profits both current and future expected growth rate
Segment profitability calculation
Segment size* segment adoption percentagepurchase behavior profit margin percentage- fixed costs
Step 4
Select the target market
Undifferentiated targeting strategy or mass marketing
Focuses on similarities in needs of customers as opposed to the differences used when everyone might be considered a potential user of its product ex sugar
Differentiated targeting strategy
Firms target different market segment with different offerings for each ex Conde Nast has vogue go and Bon appetite magazines
Concentrated targeting strategy
Selects a single primary target market and focuses all it’s energies on providing a product to fit the markets needs
Micro marketing
Aka one to one marketing is when a firm tailors to the specific need of a consumer
1 step in positioning
Identify and develop positioning strategy
Step 5
Develop a positioning strategy that defines what a product does or represents in comparison to the competition
Firms value proposition
Communicates Customer benefits to be received from the product
Main value proposition components
Target market
Offering name or brand
Product/service category or concept
Unique point of difference and benefits
Values as a positioning strategy
Popular because of the relationship of price to quality
Volvo equals box car equals safety
Symbols
Powerful positioning tools that distinguish brands from competition aka nike swoosh
Perceptual map
Displays position of products In consumers minds
6 steps to perceptual maps
Determine consumers perceptions and evaluations of product or service in relation to competitors Identify markets ideal points on size Identify competitors positions Determine consumer preferences Select position Monitor position strategy
