STP Flashcards
what is segmentation?
take market and divide into groups
what is targeting?
focus on one group
evaluate segments and identify target segment
what is positioning?
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
what are the 5 steps of the STP process?
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
describe step one in the STP process
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
describe step two in the STP process
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
what are the 4 most common segmentation bases?
geographic, demographic, psychographic, and behavioural
describe the geographic segmentation base
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
describe the demographic segmentation base
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
describe the psychographic segmentation base
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
describe the behavioural segmentation base
why do they buy? How often? How do they plan to use the products?
benefits, usage rate, loyalty, occasion
what is geodemographic segmentation?
combo of geographic, demographic, and lifestyle characteristics
describe step three in the STP process
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
what are the 4 main types of targeting strategies?
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
describe what the overlap is between the 3 circles in positioning
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
describe step 4 in the STP process
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
describe step 5 in the STP process
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
what is the general formula for a positioning statement
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
what are the positioning methods?
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
what are the six steps in determining a positioning strategy?
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
what is repositioning?
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
what is a perceptual map?
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
