lecture6-STP Flashcards
What does STP stand for in marketing?
Segmentation, Targeting, and Positioning
When is mass marketing considered appropriate?
When consumers have virtually the same needs, goods are scarce or a commodity, goods can sell themselves, and there is little to no competition
What is one key benefit of target marketing?
Increased Firm Profits
What are the three steps involved in target marketing?
- Segmentation
- Targeting
- Positioning
Define segmentation in marketing.
A marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs and are alike in the way they perceive, value, use, and buy a product
What are some bases for segmentation?
- Demographic
- Geographic
- Psychographic
- Behavioral
What factors are considered in behavioral segmentation?
- Purchase Pattern and History
- User vs. nonuser
- Brand loyalty vs. switching
What does targeting involve in marketing?
Choosing one or multiple customer segments to communicate our offering to
What characteristics are evaluated for potential market segments?
- Size
- Growth rate
- Profitability
- Loyalty
What is Customer Lifetime Value (CLV)?
The value of all future streams of profits that a customer generates over the life of their business with the firm
How is CLV calculated?
CLV = (P * Q - TC) * t - AC
What does ‘P’ represent in the CLV formula?
Price charged to consumer
What are some factors to consider regarding company fit in targeting?
- Compatible with company’s competency
- Willing to buy your product
What ethical considerations should be taken into account in targeting?
Ethical targeting should avoid exploiting vulnerable groups, respect consumer privacy, prevent discrimination, and ensure truthful messaging. Companies must also consider the broader societal impact of their marketing strategies.
Define positioning in marketing.
The place a product occupies in the consumer’s mind
What questions should be asked to evaluate positioning?
- How do consumers currently perceive our/competitors’ products?
- Are there any gaps in perceptions that may be profitable?
What are the ABC’s of positioning?
- Audience
- Benefits
- Compelling Reason
Give an example of a positioning statement for Avis.
For business travelers, Avis provides the best customer service, because it’s #2 and tries harder.
Provide an example of a positioning statement for Gatorade.
To active athletes of all ages, Gatorade is the brand that best satisfies thirst and replenishes you, because it’s the only brand endorsed by all major U.S. pro sports.
