STP

Question 1

what is segmentation?

Answer 1

take market and divide into groups

Question 2

what is targeting?

Answer 2

focus on one group

evaluate segments and identify target segment

Question 3

what is positioning?

Answer 3

market to make company attractive to the segment

target market + differentiation

Positioning: the mental picture or perception - the thoughts, feelings, and impressions = that people have about a company and its products and brand relative to competing products, brand, or companies

Question 4

what are the 5 steps of the STP process?

Answer 4

1: strategy or objectives - s
2: segmentation bases - s
3: evaluate segment attractiveness - t
4: select target market - t
5: identify and develop positioning strategy - p

Question 5

describe step one in the STP process

Answer 5

Establish Overall Strategy or Objectives

The segmentation strategy must be consistent with and derived from the firm’s mission and objectives, as well as its current situation - SWOT

Question 6

describe step two in the STP process

Answer 6

segmentation bases

segment the market

develops descriptions of the different target market segments - and their needs, wants, and characteristics - using a variety of segmentation bases

Question 7

what are the 4 most common segmentation bases?

Answer 7

geographic, demographic, psychographic, and behavioural

Question 8

describe the geographic segmentation base

Answer 8

where do they live?

Organizes customers into groups on the basis of where they live

Continent, province, city, urban, suburban, rural, climate

Easy, ineffective, cheap

not a good way to segment

would never ONLY do geographic

Question 9

describe the demographic segmentation base

Answer 9

who are they?

Groups consumers according to who they are using easily measured, objective characteristics

easy to identify and reach

Because it is easy to gather information, demographic variables are often used for segmenting markets

Age, gender, income, occupation, race, marital status, family size, family life cycle, religion, ethnic background, generational cohort, home ownership

problem is that just because you’re in the same demographic doesn’t mean that you act the same

more effective than geographic but still basic

Question 10

describe the psychographic segmentation base

Answer 10

how do they live? What is their lifestyle?

includes:

self-values: what is imp to me?
self-concept: how you view yourself
lifestyles
needs and motives
perceptions
attitudes

once you have values they rarely change

communicate messages in diff ways based on values

more expensive

often used with other methods

Question 11

describe the behavioural segmentation base

Answer 11

why do they buy? How often? How do they plan to use the products?

benefits, usage rate, loyalty, occasion

Question 12

what is geodemographic segmentation?

Answer 12

combo of geographic, demographic, and lifestyle characteristics

Question 13

describe step three in the STP process

Answer 13

Evaluate Segment Attractiveness

the segment must be:

identifiable: coherent within segment, distinct from other segments
substantial: of sufficient size, growth, and buying power
reachable: willing and able to receive communications and distribution
responsive: wiling and able to buy product
profitable: financially worth pursuing

Question 14

what are the 4 main types of targeting strategies?

Answer 14

1) undifferentiated (mass) : market the same product in the same wya to everyone; no customization

2) differentiated (multi-segment): different types of communication for the same product

3) concentrated (single segment): focus in on one segment which is who we target; this is risky because there is no diversification

4) micromarketing (one-to-one): customized and specific; can’t engage in mass production; satisfy customers who want customization

Question 15

describe what the overlap is between the 3 circles in positioning

Answer 15

the most important is 1 which is an overlap between customer needs and wants and the company product; it demonstrates what we offer and what the customer wants

Question 16

describe step 4 in the STP process

Answer 16

The key factor likely to affect this decision is the marketer’s ability to pursue such an opportunity or target segment

A firm is likely to assess both the attractiveness of the opportunity (opportunities & threats - ie. profitability of the segment) and its own competencies (strengths & weaknesses)

The degree to which firms should target their markets depends on the balance the firm wants to achieve between the added perceived customer value that segmentation can offer and its cost

Question 17

describe step 5 in the STP process

Answer 17

identify and develop positioning strategy

The positioning strategy can help communicate the firm’s or the product’s value proposition, which communicates the customer benefits to be received from a product or service and thereby provides reasons for wanting to purchase it

A firm’s positioning strategies must focus on the value a product or service offers the target consumer, or how it is better than competitors’ products and services
When positioning against competitors, the objective is to play up how the brand being marketed provides the desired benefits better than those of competitors

create a positioning statement

Question 18

what is the general formula for a positioning statement

Answer 18

for [target segment], [company/ product] is a [frame of reference] that [point of parity] and/ but [point of difference]

[frame of reference] = industry
[point of parity] = what everyone does
[point of difference] = what you do that is different

Question 19

what are the positioning methods?

Answer 19

1) value: Popular positioning method because the relationship of price to quality is among the most important considerations for consumers when they make a purchase decision; not necessarily price

2) product attributes: Attributes that are most important to the target market; Tend to focus on product leadership, emphasizing dimensions such as innovation, quality, performance, design, and reliability

3) Benefits and symbolism: Emphasizes the benefits of the brand as well as the psychological meaning of the brand to consumers; Established companies can use a well-known symbol as a position tool, especially to appeal to loyal customers

4) competition: Firms can choose to position their products or services head-to-head against a specific competitor or an entire product/ service classification on similar attributes within the target market; Can’t be too close to their competitor because they can risk confusing consumers or facing legal challenges

5) market leadership: well established companies use this only; become the standard of the industry

Question 20

what are the six steps in determining a positioning strategy?

Answer 20

1) Determine consumers’ perceptions and evaluations of the firm’s product or service in relation to competitors
2) Identify the market’s ideal points and size
3) Identify competitors’ positions
4) Determine consumer preferences
5) Select the position
6) Monitor the positioning strategy

Question 21

what is repositioning?

Answer 21

when firms try to change their positioning (broaden target market)

Brand repositioning refers to a strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences

has costs and risks : money

Question 22

what is a perceptual map?

Answer 22

displays, in two or more dimensions, the position of products or brand in the consumer’s mind

Ideal point: where a particular market segment’s ideal product would lie on the map
The position of each brand is denoted by a small circle
The numbered circles denote a consumer’s ideal point
The larger the numbered circle, the larger the market size