STP Marketing and the Evolution of Marketing Strategy
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1 Chapter 6 Market Segmentation, Positioning, and the Value Proposition STP Marketing and the Evolution of Marketing Strategy 1. Target Market: A sub-group of a larger market chosen as the focal point for a marketing or advertising campaign. 2. Positioning: Designing and representing a brand in a way that is distinct in the consumer s mind. 3. Positioning Strategy: Selecting key themes to communicate to a target market. 4. Marketing Strategy: Evolves as a result of 1-3 Ch 6: Segmenting Markets 2 Beyond STP Regular Assessment 1. Reassess segmentation strategy: A detailed examination of the current target segment to develop new and better ways of meeting its needs, or a need to change the target and reposition the brand to a new segment. 2. Pursue product differentiation strategy: Product differentiation is a firm s effort to emphasize or even create differences in brands to distinguish them from competitors. Advertising plays a critical role as part of the product differentiation strategy because the consumer will have to be convinced that the difference is meaningful. Ch 6: Segmenting Markets 3 1
2 The STP Marketing Process (Segmenting, Targeting, Positioning) 1. Break the market into smaller, more homogenous segments 2. Specifically target discrete market segments 3. Position the brand to appeal to the targeted segments Ch 6: Segmenting Markets 4 Identifying Target Segments: Market Segmentation Geography Demographics Psychographics Lifestyles Benefits Usage Patterns Commitment Levels Ch 6: Segmenting Markets 5 Segmenting by Usage and Commitment Advertising and promotion targeted to: Heavy users Nonusers Brand-loyal users Switchers/Variety seekers Emergent Consumers Ch 6: Segmenting Markets 6 2
3 Demographic Segmentation 1. Age 2. Gender 3. Race 4. Marital Status 5. Income 6. Education 7. Occupation Ch 6: Segmenting Markets 7 How would you describe the demographic segment targeted by this advertising campaign? How about this ad? What is the target demographic for this ad campaign? 3
4 Geographic Segmentation Ch 6: Segmenting Markets 10 Psychographics and Lifestyle Segmentation Opinions Lifestyle Activities Interests Lifestyle segmentation provides insight into consumer s motivations Ch 6: Segmenting Markets 11 Benefit Segmentation Prestige? Passenger Safety? Fuel Economy? Ch 6: Segmenting Markets 12 4
5 Business to Business Markets Markets segmented by: Usage rates Geographic location SIC (Standard Industrial Classification) Code Stage in the purchase process: first time vs. experienced buyers Benefits desired Ch 6: Segmenting Markets 13 Prioritizing Target Segments Examine your ability to deliver value to the segments and costs of new capabilities distinct competencies of the firm Research segment size, growth potential and usage frequency Assay the competitive environment Find a niche you can scratch Ch 6: Segmenting Markets 14 Effective Positioning. is based on substance of the brand s values is consistent over time is both simple AND distinctive Ch 6: Segmenting Markets 15 5
6 Fundamental Positioning Themes Benefit Positioning User Positioning Competitive Positioning Ch 6: Segmenting Markets 16 Do you think this ad for Pepsi is emphasizing benefit, user or competitive positioning? Repositioning Used to revive an ailing brand or fix a lackluster new market entry The challenge: Changing perceptions of a brand forged over years of advertising. Ch 6: Segmenting Markets 18 6
7 Capturing the Value Proposition Functional Emotional Self-expressive Benefits VAL UE Relative Price Ch 6: Segmenting Markets 19 7
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