L4: STP Flashcards
What is segmentation?
Segmentation is the process of dividing a market of potential customers into groups or segments, based on different characteristics.
- Choose variables for segmenting market
- Build a profile of segments
- Validate emerging segments
What are the different market-targeting strategies?
From broad targeting to narrow targeting;
- Undifferentiated marketing (mass)
- Differentiated marketing (segment)
- Concentrated marketing (niche)
- Micro marketing (local/individual)
What is undifferentiated marketing?
A market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. There is no account for customer; - needs/wants - income - preference
This is also called mass marketing, as it works for mass production to reduce costs and create a higher profit margin
What is differentiated marketing?
A market coverage strategy in which a firm targets several market segments and designs separate offers for each.
This is also called segmented marketing
What is meant with concentrated marketing?
A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches
Also called niche marketing
What is meant with micromarketing as a targeting strategie?
Tailoring products and marketing programs to the needs and wants of specific individuals, and local customer segments
(includes local and individual marketing)
What is differentiation?
Things that make you as a customer go for one product over the other product
What are the different types of segmentation?
Geographic - characteristics of where customers are located (climate, country, religion)
Demographic - Personal and family characteristics (age, gender, education, income, family structure)
Psychographic - Attitudes, opinions and beliefs held by consumers (Personal values, personality, interests)
Behavioural - Shopping, buying and product using behaviour (Recency, volume, buying channel)
Needs based - Product service or information needs (Feature usage, feature benefits, needs trigger, price sensitivity)
Business relationship - Stage of purchase or usage (customer journey stage, situation, tenure)
What are the different criteria for segmentation success?
- Homogenous - are customers in a segment similar in a way?
- Identifiable - can we assign a given customer to a segment
- Measurable - can we describe each segment by measurable characteristics?
- Sufficiently large - Enough customers in each segment
- Approachable - can the segments be approached by the marketing mix
- Stable over time - is segmentation somewhat stable
What is targeting?
Evaluating each segment’s attractiveness and selecting one or more to enter.
- Decide on targeting strategy
- Identify which and how many segments should be targeted
What are important factors when chosing segments?
- Segment size
- Segment potential
- Company resources
What is positioning?
Designing the company’s offer and image so taht it occupies a distinct and valued place in the target customers’ mind, relative to competing brands
- Understand consumer perceptions
- Position products in the mind of the consumer
- Design appropriate marketing mix to communicate positioning
What are the pros and cons of positioning maps?
Pros
- it is the customers’view
- Hightlight unserved positions
- Competition analysis
Cons
- 2 dimensions only
- Overgeneralized
- Same applies for competitors
What are points of parity (POP?
Overlapping segments of a brand; associations shared with other brands
- Category
- Competitive
What are points of difference (POD)?
The differences between brand perception; the strong favourable and unique associations for a brand
- Unique selling points
- Competitive advantage
What are the steps of the STP proces?
- Define the market for the organization
- Create market segments
- Evaluate the segments on a set criteria
- Construct segment profiles
- Evaluate the attractiveness of the segments
- Select target markets
- Develop positioning strategy
- Develop and implement marketing mix
- Review performance
What can be causes of a saturated line in the STP proces?
- Customers need change
- A new policy
- Raw resources start running out
- New competition
- Change in environmental laws
- Customer values change
wHAT ARE TWO DIFFERENT TYPES OF COMPETITIVE ADVANTAGE?
Cost advantage
Differentiation advantage
What are the different ways to segment the market with variables?
- One to one marketing = customized marketing engaging indoividual customers
- Single variable segmentation = use one variable to devide total market
- Multivariable segmentation = using two + variables to devide a total market
What is benefit segmentation and what are the 5 types?
Benefit segmentation is a division of the market based on the benefits that customers desire.
- Company demographic/firmographic
- Operating valuebles
- Purchasing approach
- Situational factors
- Personal characteristics of buyers
What are different patterns/cluster you can base a segment on?
- Homogenous segments = all similar
- Cluster segments = different groups of different sizes
- Diffused segments = different groups of people, but euqally devided
What are the steps of positioning?
- define segments
- decide which segments to target
- Understand customers’ expectations
- Develop a product to cather these needs and expectations
- Evaluate positioning
- Select image that sets product apart from competitors
- inform target consumers about product
What are 3 generic routes to competitive advantage (Porter)?
Cost leadership = low=cost base
Differentiation = different then competitors
Focus = particular target group in mind
