Segmentation, Targeting, and Positioning (STP) Process

These flashcards cover key definitions, steps, criteria, and strategies in the Segmentation, Targeting, and Positioning (STP) process described in the lecture notes.

What is the first step in the STP process?

Establish the overall strategy or objectives.

In Step 1 of STP, with what must the marketing strategy’s vision be consistent?

The firm’s mission, objectives, and SWOT analysis.

What is the second step in the STP process?

Use segmentation methods.

Name the five basic segmentation methods marketers commonly use.

Geographic, Demographic, Psychographic, Benefit, and Behavioral segmentation.

How does geographic segmentation group customers?

By where they live (e.g., country, region, city, zip code).

For which type of company is geographic segmentation most useful?

Companies whose products meet needs that vary by region.

Which segmentation method uses age, gender, income, and education?

Demographic segmentation.

Why can demographic segmentation be less useful for defining target segments?

Because similar demographics do not always share the same needs or behaviors.

How does psychographic segmentation classify customers?

By lifestyles, self-concept, and self-values that drive how they spend time and money.

What are self-values in psychographic analysis?

Overriding life goals that guide how a person lives.

Define ‘self-concept’ in psychographic segmentation.

The image people have of themselves.

What does ‘lifestyle’ refer to in psychographic segmentation?

How a person lives to achieve personal goals.

What is benefit segmentation?

Grouping consumers based on the benefits they seek from products or services (e.g., convenience, economy, prestige).

Behavioral segmentation divides customers according to what?

How they use the product or service, such as occasion or loyalty.

What characterizes a ‘loyalty’ segment in behavioral segmentation?

Customers whose strong preference virtually excludes competitors.

What is geodemographic segmentation?

Grouping consumers by a combination of geographic, demographic, and lifestyle traits.

Which commercial system exemplifies geodemographic segmentation?

The Tapestry Segmentation System.

List the five criteria for evaluating segment attractiveness.

Identifiable, Substantial, Reachable, Responsive, and Profitable.

Why must segments be identifiable?

So firms know who is in the segment and can design offerings to meet their needs.

What does ‘substantial’ mean in segment evaluation?

The segment is large enough to be profitable and support marketing efforts.

When is a segment considered reachable?

When consumers know the product exists, understand its benefits, and know how to purchase it.

What does responsiveness require from a segment?

Segment members react similarly and positively to the firm’s offering.

Provide the formula for segment profitability.

(Segment size × Segment adoption percentage × Purchase behavior × Profit margin %) – Fixed costs.

Which targeting strategy treats the entire market as one and offers a single product to all?

Undifferentiated targeting strategy (mass marketing).

What is a differentiated targeting strategy?

Targeting several segments with a different offering for each.

Define a concentrated targeting strategy.

Focusing all efforts on a single, primary target market.

What is micromarketing (one-to-one marketing)?

Tailoring a product or service to suit an individual customer’s needs.

What is positioning in marketing?

Defining the marketing mix so customers have a clear, distinct, desirable understanding of the product versus competitors.

Name the four core components of a value proposition.

Target market, offering name/brand, product or service category, and unique point of difference/benefits.

List four common positioning methods.

Value proposition, salient attributes, symbols, and competition.

What analytical tool displays brands’ positions in consumers’ minds on two or more dimensions?

A perceptual map.

Give two key uses of perceptual mapping for marketers.

Determining consumer perceptions of brands and identifying ideal points in the market.