Marketing Chapter 6: Customer Value-Driven Marketing Strategy (STP)

4 steps†: Segmentation, Targeting, Differentiation, Positioning (segmentation + targeting = which customers; differentiation + positioning = how to serve them).

Segmentation bases (consumer markets): geographic, psychograhpic, behavioral (occasion+benefit), international

Geographic: nations, regions, states, cities, neighborhoods, density, climate.

Demographic: age, life-cycle, gender, income, occupation, education, religion, ethnicity, generation. Most popular because needs, wants, and usage rates vary with demographics.

Psychographic: social class, lifestyle, personality (Panera "Food as it should be").

Behavioral: occasions, benefits, user status, usage rate, loyalty status.

Occasion: when buyers get the idea, purchase, or use.

Benefit: the different benefits consumers seek ("There's a Fitbit for Everyone").

International: geography, economic factors (BRIC), political/legal, cultural. Intermarket segmentation groups consumers with similar needs regardless of location.

Effective segments are MADSA: Measurable, Accessible, Substantial, Differentiable, Actionable.

Targeting: Evaluate segments on size and growth, structural attractiveness, and company objectives and resources. Target market = buyers with common needs or characteristics the company chooses to serve.

Strategies†: undifferentiated (mass), differentiated, concentrated (niche), micromarketing (local or individual).

Choose based on: company resources, product variability, product life-cycle stage, market variability, competitors' strategies.

Product position: how consumers define the product on important attributes. "Products are made in factories, but brands happen in the minds of consumers."

Perceptual map: plots brands on two axes (e.g., prestige vs. mass, scientific vs. natural for skincare).

Competitive advantage: lower prices, or more benefits that justify higher prices. Differentiate on product, services, channels, people, or image.

Unique selling proposition (USP): one per brand, stick to it; can position on more than one differentiator.

Which differences to promote: Important, Distinctive, Superior, Communicable, Preemptive, Affordable, Profitable.

Winning value propositions: More for more (most upscale), More for the same (high quality, lower price than rivals), More for less (best winning proposition), The same for less (good deal), Less for much less (lower performance at a much lower price)

Delivering the position: the entire marketing mix must support it; maintain it with consistent performance and communication; monitor and adapt over time.

Examples: Dunkin' targets "everyday Joes" vs. Starbucks' experience positioning. New Coke failed mostly because people were angry about losing the old formula, not because they disliked the new one.