Lecture 3 - STP Flashcards
mass marketing
same product and marketing mix for everyone; undifferentiated, one-for-all strategy
-simple and efficient from supply side
segmentation
process of dividing markets into distinct subsets of customers w/common needs/characteristics
- select 1+ segments to target (aiming offerings, aligning value prop w/target)
- position w/unique marketing mix relative to competitive offerings
advantages of segmentation
- allows established companies to find room for growth (ex. Marriott, lots of segmentation drives brand portfolio)
- allows new companies to find market niche
potential segmentation variables
- geographic (easy and most powerful) (zip code, region)
- demographic (education, income, industry, assets)
- psychographic (ex. “outdoorsy”, corporate culture, lifestyle)
- attitudinal (benefits sought, brand/supplier loyalty)
- behavioral (usage rate, size of order)
what makes a good segment?
- relevance: make sure whatever we’re looking at is actually predictive of consumption
- homogeneous w/in (similarity)
- heterogeneous between (exclusivity)
- comprehensive (MECE: if you’re to segment a group, everyone’s classified and groups are distinct from each other)
- operational (measurable, accessible, actionable): how do we market to those people? geography is favored bc its actionable
Nielsen PRIZM
geo-demographic segmentation (where you live is highly predictive of values, etc)
CRM
=customer relationship management = creating & maintaining relationship w/individual customer to build lifetime value
-opposite of one-for-all
-micro segmentation: moving toward segment of 1, one-for-each strategy
*for most industries, it’s helpful to break segments down
-identify, differentiate, interact, customize
Ex. Amazon!
targeting
- attractiveness: segment size, growth, value, stability
- compatibility: company position w/ segment; ease of entry, ability to reach and serve segment (do we have capability of reaching this segment?)
- competitors: # and strength, ease of entry
positioning statement formula
to (target segment and need) our (brand) is the (concept) that (point to difference and reasons to believe)
Ex. For upscale American families, Volvo is the family automobile that offers max safety
- “family automobile” = concept; point of parity
- “max safety” = point of differentiation
positioning
-influences how a particular segment perceives an offering in comparison to competition
positioning statements
-uses 4P’s
-internal statement outlining essence of the strategy
-critical elements =
target/need
concept/frame of reference
point of differentiation/reason to believe (what separates their offering in customer mind)
customer centricity
aligning an entire company’s development and delivery of products and services with the current and future needs of a SELECT group of customers in order to maximize their LT financial value to the firm
