Ch. 6 Segmentation, Targeting, and Positioning

step 1 of STP

establish overall strategy or objectives

• consistent with mission statement

• derived from mission and current state

step 2 of STP

Segmentation Bases

• geographic

• demographic

• psychographic

• behavioural

geographic segmentation

• divide market in separate geographic units

• countries, regions, provinces, cities, neighborhoods, climate, etc

• develop appropriate marketing programs

demographic segmentation

• most common method

• divide market into groups based on:

  • gender

  • age

  • ethnic group

  • family lifecycle stage

  • household type

  • income

  • other, ie. occupation, religion, education

• census is excellent source of segmentation data

psychographic segmentation

how consumers describe themselves

• self-values: goals for life

• self-concept: image of themselves

• lifestyles: how people live their lives to achieve their goals

VALS categories

• innovators

• thinkers

• believers

• achievers

• strivers

• experiencers

• makers

• survivors

behavioural segmentation

• benefits

• usage rate

• loyalty

• occasion

geodemographic segmentation

• combination of geographic, demographic, and lifestyle characteristics to segment a market

• PRIZM segmentation: canadian segmentation model that has linked geodemographics to other data, such a psychographics, incorporating “social values” data from environics to explain consumer behaviour

step 3 of STP

evaluate segment attractiveness

• identifiable

• reachable

• responsive

• substantial and profitable

identifiable

• who is in their market

• are the segments unique

• does each segment require a unique marketing mix

reachable

• know the product exists

• understand what it can do

• recognize how to buy

responsive

customers must:

• react positively to firm’s offering

• move toward the firm’s products / services

• accept the firm’s value proposition

substantial and profitable

• size matters

• too small and the segment is insignificant, and will not be profitable

• growth potential equally important

step 4 of STP

select target market

• based on completing a SWOT analysis

• considers the organization’s competencies

targeting strategies

• micromarketing one to one

• differentiated

• mass or undifferentiated

• concentrated

undifferentiated targeting strategy, or mass marketing

the product or service is perceived to provide the same benefits to everyone, there simply is no need to develop separate strategies for different groups

differentiated targeting strategy

target several market segments with a different offering for each

concentrated (niche) targeting strategy

when an organization selects a single, primary target market and focuses all its energies on providing a product to fit that market’s needs

micromarketing (one to one)

form of segmentation that tailors a product or service to suit an individual customer’s wants or needs

step 5 of STP

identify and develop positioning strategy

positioning methods

• value

• product attributes

• benefits and symbolism

• competition

• market leadership

• perceptual mapping

• repositioning

value

the relationship of price to quality

different consumers = different value

product attributes

focus on the attributes that are most important and varies by target market

benefits and symbolism

emphasizes the benefits of the brand as well as the psychological meaning of the brand to consumers

competition

has two options:

• position against a specific competitor

• position against an entire product classification

market leadership

• companies emphasize their leadership position

• consumers often perceive them as setting the standard of their industry

• examples: Amazon, Google, RBC, Loblaw

positioning by using perceptual mapping

1. determine consumers’ perceptions and evaluations in relation to competitors

2. identify the market’s ideal points and size

3. identify the competitors positions

4. determine consumer preferences

5. select the position

6. monitor the positioning strategy

repositioning

refers to a strategy in which marketers change a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preference