Segmentation Flashcards
1
Q
What is the STP framework?
A
- STP is a framework that simplifies the process of market segmentation.
- STP marketing model is used to divide the market into segments. Select the most attractive/appropriate segments, and position the product/service in the marketplace to be the most appealing to your targets segments.
2
Q
What does STP stand for?
A
Segmentation, targeting and positioning
3
Q
Why do we need segmentation?
A
- Marketing has changed: we cannot appeal to all buyers in the market place - or at least not all buyers in the same way.
- So many buyers, scattered across the world each need and want different things and each purchase in very different ways.
- Companies must identify the parts of the market they can serve best and most profitably.
- They must design customer driven strategies to build relationships with the right customers.
4
Q
What are the 4 types of segmentation?
A
Geographic, demographic, psychographic and behavioural
5
Q
What is geographic segmentation?
A
- Dividing markets into different geographical units such as nations, states, regions, countries, cities, neighbourhoods - either local, regional, international and national.
- A company may decide to operate in one or a few areas or all of them but paying attention to geographical differences in needs and wants.
- Many companies are localising their products, services, promotions, to fit the needs of different graphical units.
- Important for global marketing strategies.
6
Q
What is demographic segmentation?
A
- Dividing the market up based on the demographic variables e.g age, gender, income and education.
- The most popular bases for segmenting customer groups.
- Customers’ needs, wants and usage rates vary closely with demographics - generally speaking.
- And they’re easy to measure compared to some of the other segmentation variables.
- Even if segmentation is based on one of the different variables marketers still need to.
7
Q
What are the demographic variables?
A
Age, gender, income
8
Q
What is age segmentation?
A
- Customers of different age groups have different needs and wants.
- People in the same age group differ in many ways, yet they tend to share a set of values and common cultural experiences that they carry throughout life.
- Marketers initially develop a product to attract one age group and then attempt to broaden its appeal later on.
- Brand loyalty tends to increase with age, partially, due to customers becoming more emotionally attached to the brand they use.
- Using different marketing approaches or different products for different age and lifecycle groups.
- One problem with age as a demographic is stereotyping.
- Age can be a poor predictor of which stage of the lifecycle customers are at.
- Older customers actively avoid such brands. They would be more receptive to the brand if communication strategies were more inclusive.
9
Q
What is gender segmentation?
A
- Be used for a long time in a variety of industries ranging from beauty, clothing and toys.
- It’s common knowledge that companies market their products differently to males and females.
- The study of gender extends beyond obvious differences, attempting to understand more fundamental gender differences in processing, skills, attention and undercover how when they affect behaviour.
- For marketers, understanding how males and females differ in their cognitive processing styles, effective responses, and reactions to marketing stimuli is essential for anticipating their product choices and preferences.
10
Q
What is income sergmentation?
A
- Many companies target more affluent customers with luxury goods and services.
High touch marketing strategies for those with higher incomes. Specific clubs and additional services for those with more money, better memberships etc. - But not all companies that use income segmentation target the rich…some target low and middle income specifically. Even luxury brands can be categorised.
Location may be geographical segmentation and income segmentation working together.
11
Q
What is psychographic segmentation?
A
- Dividing a market into different segments based on lifestyle or personality characteristics.
- Very difficult to do - but very important.
- People in the same demographic can have very different psychographic variables.
- Multi level approach needed.
- People buy products to reflect their lifestyles, personality, and self concepts.
- People have different attitudes and beliefs and will act a certain way as a result.
12
Q
What is the difference between demographic and psychographics?
A
Psychographics goes beyond classifying people based on general demographic data. psychographics seek to understand the cognitive or affective factors that drive consumer behaviours.
13
Q
What is the big 5 personality trait?
A
- The big 5 taxonomy organises traits into the five broad domains:
- Extraversion (Assertive and gregarious vs introverted):
- Agreeableness (Warm and kind vs cruel)
- Conscientiousness (Industrious and responsible vs undependable).
- Emotional stability (Neuroticism; calm and serene vs anxious).
- Openness to experience (Intellectual and creative vs close minded).
- Big five can partially predict/explain different types of behaviour, both consumption and non consumption related to external motives and internal motives for drinking.
14
Q
What is behavioural segmentation?
A
- Divides a market into segments based on consumer knowledge, attitudes, uses of a product or responses to a product.
- Considered the best starting point for market segmentation - especially today’s digital world when we have so much more information about consumers at our disposal.
- Universal occasions
- Regular
- Rare
15
Q
Behavioural segmentation: Benefits sought/needed
A
- Grouping based on the benefits customers seek from the product/services.
- Need to find the major benefits, the kind of people who look for them and the brands that deliver them.
- Provide customers with what they want based on the benefits they drive from use.
- Real benefits - rational and irrational.
