Lecture 8: STP

Question 1

What are the main steps of the STP process

Answer 1

1. Strategy or objectives
2. Common segmentation bases
3. Evaluate segment attractiveness
4. Select target market
5. Identify and develop positioning strategy

Question 2

What are some segmentation bases?

Answer 2

• geographic
• demographic
• psychographic
• behavioural

Question 3

Geographic segmentation (simplification & variables)

Answer 3

where do they live (country, region, climate, population size –> e.g., provinces, topical, > 100,000 people)

Question 4

Demographic segmentation (simplification & variables)

Answer 4

who are they (age, gender, education)

Question 5

Psychographic segmentation (simplification & variables)

Answer 5

How do they live? What is their lifestyle? (personality, lifestyle, motives –> outgoing, activities/interests, safety/status)

Question 6

Behavioural segmentation (simplification & variables)

Answer 6

Why do they buy? How often? (benefits, usage, occasions –> quality entertainment, first-time users, emergencies/celebrations)

Question 7

what are self-values?

Answer 7

life goals; not just the goals one wants to accomplish in a day (drive how a person lives life)

Question 8

What is self-concept?

Answer 8

the image one has of themself

Question 9

What is the Values and Lifestyle Survey?

Answer 9

tool to support psychographic segmentation efforts (e.g., innovators, thinkers, believers, achievers, strivers, experiencers, makers, survivors)

Question 10

what’s a limitation to psychographics?

Answer 10

more expensive in comparison to something like demographics where Nike can easily ID customers as men or women

Question 11

occasion segmentation

Answer 11

based on when a product or service is purchased or consumed (e.g., Moores with everyday suits for work and others for prom or weddings)

Question 12

benefit segmentation

Answer 12

considers the benefits a customer is looking for (e.g, RBC segmentating between wealth accumulators and wealth preservers)

Question 13

loyalty segmentation

Answer 13

goal: retain most profitable customers

Question 14

how do you know if a segment is worth pursuing?

Answer 14

• identifiable
• reachable
• responsive
• substantial and profitable

Question 15

undifferentiated targeting strategy

Answer 15

otherwise known as mass marketing; used when everyone might be considered a potential user of its product

Question 16

differentiated targeting strategy

Answer 16

targets several market segments with a different offering for each

Question 17

concentrated targeting strategy

Answer 17

selecting a signle primary target market and focusing all its energies on a product that fits that market’s needs

Question 18

micromarketing (one-to-one)

Answer 18

tailoring a product or service to suit an individual customer’s wants or needs

Question 19

mass customization

Answer 19

similar to micromarketing but for the masses

Question 20

positioning

Answer 20

mental picture or perception that people have about a company relative to competition

Question 21

value proposition

Answer 21

communications benefits to be received and provides reasons for wanting to purchase it

Question 22

elements of a positioning statement

Answer 22

1. target market
2. offering name or brand
3. product/service category or concept
4. unique point of difference/benefits

Question 23

what is a perceptual map?

Answer 23

the position of products or brands in a consumer’s mind (in 2 or more dimensions)