Segmentation, Targeting & Positioning (STP)

market segmentation

the process of dividing a broad market into smaller groups of consumers with shared characteristics needs or behaviors

why segmentation important 

helps understand customer needs. aids in designing effective marketing strategies. focuses on resource of maximum profit 

example of segmentation within a company Toyota

corolla- buget conscious dirvers

prius- eco conscious consumers

highlander- families

example of segmentation between companies

Toyota- mass market fuel efficient 

Tesla- tech savvy premium buyers 

Ferrari- luxury enthusiasts 

what are the 5 criteria for effective segmentation

Substantial: large enough to profit, Measurable: identifiable and quantifiable, Differentiable: responds differently to marketing, Accessible: can be reached and served, Actionable: strategies can be developed for it 

what are 4 bases of market segmentation 

demographics, geographic, psychographic, behavioral

demographic segmentation

dividing customer by personal traits like age gender income education occupation. ex: airline seats class by income 

geographic segmentation 

dividing customer based on location. ex: region country climate 

what is psychographic segmentation

dividing customer by lifestyle, values, attitudes and interest. ex: nike markets to runners and athletes

behavioral segmentation

grouping based on usage behavior loyalty and purchase habits. follows the 80/20 rule (20% of customers= 80% sales) ex: airline loyalty programs 

psychographic segmentation for a smartwatch 

fitness enthusiasts- active health focused. tech savvy professionals- innovation driven. wellness seekers- value balance and mental well being 

what are emerging trends in segmentation

behavior based segmentation growing more important. demographic less predictive due to divers lifestyles. data driven segmentation via online behavior and purchase history

how dose social media aid segmentation

provides access to to diverse audience. enables social listening and interest based segmentation. helps brands identify behavior and demographics directly

targeting

choosing specific market segments to focus marketing efforts on- criteria include:

segment size and growth 

competition level 

profitability potential 

reachability and strategic fit 

what are the 3 markets strategies

undifferentiated: one strategy for all. differentiated: multiple segments with tailored strategies. niche marketing: focused on a small, specific market 

what is positioning

creating a perception of a product in customers minds relative to competitors. steps are understand customers, analyze competitors, dense competitors, define competitive advantage, evaluate feedback. 

what are the type of competitive advantage

functional: security, economic: Walmart, convenience: Amazon, psychological: Hermes 

what is a positioning statement

a statement that defines the target market brand perception and competitive advantage.

format:For [target market], [brand] is [category] that [unique benefit]. ex:For upscale families, Volvo is the automobile offering maximum safety.

what is repositioning

changing how a brand or precuts is perceived due to market shits. ex: dominos improved quality and transparency 

what are the STP steps 

Define the market, Create segmentation, Evaluate segments( size, profit, reach), Select target market, Develop positioning strategy 

example of STP 

market- coffee shops. 

segmentation- geographic demographics, psychographic, behavioral 

target- professionals, students, middle income adults 

positioning- experience driven and customer focused