Ch. 07 - STP

STP

Segmentation, Targeting, Positioning

Segmentation

Organizes the market into smaller and similar groups based on meaningful characteristics.

Generational (groups or cohorts)

Generally 18-year-ranged cohorts, generations grew up with a common world experience (e.g., depression, WWII, economic boom, etc.). Includes groups like the "Baby Boomers" and "Millennials."

Geodemographics

Study of people based on the fact that people with similar demographics tend to live close to one another.

Behavior

Things consumers do that can be observed (e.g., purchasing behavior).

Psychographics

Quantifiable description of consumers lifestyles, usually based on activity, interest, and opinion statements (in surveys) or events (observed) or estimated.

Targeting

When marketers evaluate the attractiveness of each potential segment and decide in which of these groups they will invest resources to try to turn them into customers. Viable segments should:

1) Have similar needs that differ from other segments.

2) Be measurable in size and purchasing power.

3) Be large enough to be profitable.

4) Be reachable.

5) Have meet-able needs.

Persona

A description/profile of a typical consumer in the segment.

Targeting Strategies

1) undifferentiated-all treated the same

2) concentrated-Focuses on just one (limited resources)

3) differentiated-Focuses on several (more resources)

4) customized (segment of one)-highly focused

Positioning

How a particular product is perceived in the minds of consumers relative to competing offerings.

Positioning Statement

An expression, used internally, of how the company would like the product to be viewed in the target's mind.