Understanding Strategic Issues in business Plan Development
STP :
Segmentation Targeting and Positioning
Building the Right Relationships
with the Right Customers
Learning Goals
1. Learn the three steps of target marketing,
market segmentation, target marketing, and
market positioning
2. Understand the major bases for segmenting
consumer and business marketing strategy
3. Know how companies identify attractive
market segments and choose target
marketing strategy
4. Realize how companies position their
products for maximum competitive
advantage in the marketplace 7-2
Steps in market
segmentation, targeting
and positioning
Market
Identify bases for segmenting the market
Segmentation
●
●
Develop segment profiles
Target
Marketing
●
Develop measure of segment
attractiveness
●
Select target segments
Market
Develop positioning for target segments
Positioning
●
●
Develop a marketing mix for each segment
7-4
Goal 1: Learn the three steps of target marketing
Segmentation, Targeting and
Positioning (STP) Model
Sofia has just started a Business Plan
Venture. She conducts a careful analysis
of sales data within the first few weeks,
and quickly identifies a profitable
opportunity with a particular group of
high-value customers.
STP Model
So, she brainstorms several ideas with her team,
and they come up with an exciting new product
which has the potential to be a real success for the
company.
7-5
Goal 3: Know how companies identify and target attractive segments
STP Model
Sofia has identified a profitable segment of the
market, but how has she done it? How can her
team members develop a perfect product for
these people? And how should they communicate
its benefits?
7-6
Goal 3: Know how companies identify and target attractive segments
STP Model
In this Chapter, we'll look at the Segmentation,
Targeting and Positioning (STP) Model*, an
approach that you can use to identify your most
valuable market segments, and then sell to
them successfully with carefully targeted products
and marketing
7-7
Goal 3: Know how companies identify and target attractive segments
Examples of Targeting in Marketing
The STP Model consists of three steps that help
you analyze your offering and the way you
communicate its benefits and value to specific
groups.
STP stands for:
Step 1: Segment your market.
Step 2: Target your best customers.
Step 3: Position your offering.
7-8
Goal 3: Know how companies identify and target attractive segments
STP Model
This model is useful because it helps you identify
your most valuable types of customer, and then
develop products and marketing messages that
ideally suit them.
This allows you to engage with each group better,
personalize your messages, and sell much more of
your product.
7-9
Goal 3: Know how companies identify and target attractive segments
Definition
Market Segmentation:
● Dividing a market into distinct
groups with distinct needs,
characteristics, or behavior who
might require separate products or
marketing mixes.
7-
Goal 2: Understand the major bases for segmentation 10
Segmenting Consumer
Markets
Geographical
segmentation
Demographic
segmentation
●
●Lifestyle, social
Most popular class, and
segmentation
personality-based
Psychographic
segmentation
segmentation
Behavioral segmentation
7-
Goal 2: Understand the major bases for segmentation 11
Geographic Segmentation
Variables
• World • Neighborhoo
region or d
country • City or
• U.S. region metro
• State size
• City • Density
• Climate
7-
Goal 2: Understand the major bases for segmentation 12
Demographic
Segmentation
Variables
• Age • Occupatio
• Gender n
• Family size • Education
• Family life • Religion
cycle • Race
• Income • Generation
• Nationality
7-
Goal 2: Understand the major bases for segmentation 13
Behavioral Segmentation
Variables
• Occasions • User Rates
• Benefits • Loyalty Status
• User Status • Readiness
• Attitude Stage
Toward the
Product
7-
Goal 2: Understand the major bases for segmentation 14
Segmenting Business
Markets
Demographic segmentation
●
Industry, company size,
location
Operating variables
●
Technology, usage status, customer
capabilities
Purchasing approaches
Situational factors
●
Urgency, specific application, size of
ordercharacteristics
Personal
●
Buyer-seller similarity, attitudes toward risk,
loyalty
7 - 15
Goal 2: Understand the major bases for segmentation
Segmenting International
Markets
Geographic segmentation
●
Location or
regionfactors
Economic
●
Population income or level of economic
development
Political and legal factors
●
Type / stability of government,
monetary regulations, amount of
Cultural factors etc.
bureaucracy,
●
Language, religion, values, attitudes,
customs, behavioral patterns
7 - 16
Goal 2: Understand the major bases for segmentation
Requirements for Effective
Segmentation
Measurable
●
Size, purchasing power, and profile of
segment
Accessible
●
Can be reached and
served
Substantial
●
Large and profitable enough to
serve
Differentiable
●
Respond
differently
Actionable
●
Effective programs can be
developed
7 - 17
Goal 2: Understand the major bases for segmentation
Target Marketing
Target Market
● Consists of a set of buyers who
share common needs or
characteristics that the company
decides to serve
7 - 18
Goal 3: Know how companies identify and target attractive segments
Target Marketing
Evaluating Market
Segment size and growth
Segments
●
● Segment structural
Level of competition
attractiveness
●
● Substitute products
● Power of buyers
● Powerful suppliers
●
Company objectives and
resources
7 - 19
Goal 3: Know how companies identify and target attractive segments
Target Marketing
Selecting Target Market
Segments
●Undifferentiated (mass)
● marketing Differentiated
(segmented) marketing
● Concentrated (niche) marketing
●
Micromarketing (local or
individual)
7 - 20
Goal 3: Know how companies identify and target attractive segments
Choosing a Target
Marketing Strategy
Considerations
include:
Company resources
●
● The degree of product
● variability Product’s life-cycle
● stage Market variability
●
Competitors’ marketing
strategies
7 - 21
Goal 3: Know how companies identify and target attractive segments
Target Marketing
Socially Responsible
Targeting
Some segments, especially
●
children, are at special risk
●
Many potential abuses on the
Internet, including fraud
Internet shoppers
●
Controversy occurs when the
methods used are
questionable
7 - 22
Goal 3: Know how companies identify and target attractive segments
Positioning
Positioning
: ●
The place the product occupies in
consumers’ minds relative to competing
●
products.
Typically defined by consumers on the
● basis of important attributes.
Involves implanting the brand’s unique
benefits and differentiation in the
●
customer’s mind.
Positioning maps that plot perceptions of
brands are commonly used. 7 - 23
Goal 4: Realize how companies position their products