POM: STP

SEGMENTATION

• Group customers based on similar needs

• Profile each segment

TARGETING

• Evaluate segment attractiveness

• Select target segments

POSITIONING

•Define value proposition for target segments •Develop an action plan

Segmenting & Targeting

• identify & develop profiles of segments

• evaluate the attractiveness of each segment

• select which segments to target

Differentiation & Positioning

• identify competitive advantages w.r.t meeting customer needs and wants

• develop possible positioning concepts for each targeted segment

• select, signal, and maintain chosen positions

market segmentation

the process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs

Segmentation creates value (customers)

better meet the diverse needs of customers by aligning marketing mix with consumer needs

Segmentation creates value (company)

• efficiently allocate resources

• increase the potential for profit by avoiding head-on competition

geographic segmentation

dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods.

demographic segmentation

• age • life-cycle stage • income • marital status • education • family size • gender • occupation

psychographic segmentation

divides a market into different segments based on social class, lifestyle, or personality characteristics

behavioral segmentation

consumer knowledge, attitudes, uses, or responses to a product

occasions (behavioral segmentation)

1) when they get the idea to buy

2) when they make their purchases

3) when they use the purchased items

benefits sought (behavioral segmentation)

dividing the market into segments according to the different benefits that consumers seek from the product

user status

markets can also be segmented into light, medium, and heavy users

(non-users, potential users, first-time users, regular users)

measurable (market usefulness)

can we figure out how many people are in it

accessible (market usefulness)

could we access them with our marketing tools?

substantial (market usefulness)

large and/or profitable enough to be worth serving?

differentiable (market usefulness)

do they respond differently to different marketing mix (4P)?

actionable (market usefulness)

does our company have the resources and ability necessary to target them?

undifferentiated (mass) marketing

it ignores any segment differences and go after whole market with one offer.

• Focuses on common needs rather than what’s different

differentiated marketing

a firm targets multiple segments with diverse, separate market offerings

e.g., P&G offers multiple detergent brands (Ivory, Cheer, Tide, etc.)

concentrated (niche) marketing

a firm dominates one or a few niche (= smaller) segments

e.g., big & tall shops

micromarketing

tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments

• individual (one-to-one) marketing / mass customization

Local marketing

involves tailoring brands and promotion to the needs and wants of local customer segments. • Cities • Neighborhoods • Stores

Choosing a targeting strategy depends on:

• Company resources • Product variability • Product life-cycle stage • Market variability • Competitor’s marketing strategies

differentiation

creating superior customer value by changing some aspect of the market offerings.

a difference that is worth establishing satisfies the following criteria

• important

• distinctive & superior

• communicable

• pre-emptive

• affordable

• profitable

Value proposition

the full mix of benefits upon which a brand is positioned.

Positioning - Action

The act of framing the brand in the minds of target customers so it occupies a distinct and valued place in relation to competitors.

Position - outcome

The actual perception of the brand in the minds of target customers, relative to competitors

positioning statement

a statement that summarizes company, brand, or product positioning

• to (target segment and need) our (brand) is (concept) that (point of difference)

• our(brand) is the brand of (category) for (target) that (point of difference) because (reason to believe)

Don’t of Positioning Statements

• A tag line

• An advertising slogan

• A business plan

Do’s of Positioning Statements

• An exercise and tool designed to clarify the positioning strategy and align all marketing, sales, and product development teams

• Non-emotional, factual statement intended to guide the creation of a go-to market plan

• Foundation for all customer messaging

• Internal tool not shared with customers or prospects

• Battle cry that all marketing and sales reps can rally behind