mr sims- topic 3; STP Flashcards
what does STP stand for
segment: divide the market into groups with similar characteristics or needs e.g. age
target: decide which market segment to focus on and adapt the product and the marketing min to appeal to this group
postion: portion the product in the target customers minds so they see it as better than the competition
what ways can businesses segment the market
segmentation divides a market into groups of buyers - each group will have different wants and needs and a different marketing mix
1) demographic - age, gender, class, family size
2) geographic - the market can be divided according to the neighbourhood, city, country, religions
3) income - people with higher incomes are most likely to spend their money on expensive products
4) behaviour - e.g. younger people are more likely to use their phone more unlike older people
why is segmentation useful
useful for indentifying new customers, markets and products - can also help to identify the best way to market a product
BUT- it can cause companies to ignore the needs of potential customers - can also be difficult to break the marker into obvious segments
what are the three approaches to decide which segments to target
1) concentrated marketing - involves targeting one or two segments - good for businesses with limited resources, segment must be big enough for a decent return, have growth potential, needs to meet customers needs especially if competitors aren’t meeting them
2) differentiated marketing - is where several segments are targeted and the product and marketing mix is adapted to appeal the each segment. this only really feasible for large companies whoosh large budgets. e.g. colouring book can be used by children and adult
3) undifferentiated marketing - is where segments are ignored and the company tries to reach the entire market with a single product and marketing mix. makes sense for widely use products e.g. toothpaste
what is a mass market
products are aimed at everyone. large produced goods e.g. coke, they are designed to appeal to lots of customers
what is niche marketing
niche markets are for small businesses, don’t have to compete directly with larger businesses. smaller manufacturer can meet the demand of a small niche more easily than it can meet the demand of a mass market.
how do businesses position customers minds
1) postioning is creating an image of your brand or product in the mind of your target customer - getting them to develop the opinion of your product the you want them to
2) customers have a mental map of the market and will position new products relative to the alternatives - so business needs to look at where would be the most effective place to position its brand or product in relation to its competitors
3) to postion well need to convince the target customers that you product has benefits for them and differentiate it from the competition
what are the influences on positioning
1) sate of the market - how well is the economy going e.g. if in a recession than companies will be more like to position their brand or product to make customers think its offers the best value of money
2) company’s current products - if the company’s other products are seen as reliable and cheap they are likely to try and position any new products in the similar place
3) attributes of the company- companies need to postion products to match their strengths and weaknesses.
