Chapter 5: Market Segmentation, target, positioning (STP)

market segmentation

process of dividing a target market into smaller more precisely defined groups of consumers/orgs who have common needs and are expected to respond similarly

advantages of market segmentation

increased efforts/resources on those customers who will likely result in rev for the corp, better able to understand what customers want/meet their needs

WHERE Geographic segmentation

location, climate/season, language, cultural preferences, population type/density

WHO demographic segmentation

gender, income, age, education, race/ethnicity/religion, occupation/job type, family structure/marital status

HOW behavioral segmentation

behavior pattern when interacting w product/service. occasion, usher based, different values on which benefit is best

WHY psychographic segmentation

ALO model: lifestyle, personality, values

VALS model: innovators, thinkers, achievers, strivers, experiencers, makers, survivors

Challenges of segmenting B2B market

highly complex/don’t know who is target buyer, they are more rational buyers, have more complex criteria

segmenting B2B markets

fimographics, technographic, need based, value based, behavioral

firmographics

industry, location, size, legal structure (LLC, sole proprietorship), performance

technographic

based on various hardware/software tech used by B2B customers

value/usage based

tiering/profitability groups customers according to the potential value it might bring to a business

segmenting international markets

geographical, political, economic, cultural

STP

1. Segment market into individual sections

2. target: choose which markets are the most valuable to market toward

3. position: product/service to place it in the minds of chosen target w marketing message

ADAMS

Accessible, differentiable, actionable, measurable, substantial

Accessible

can you reach customers?

Differentiable

is the segment internally homogenous yet externally heterogeneous?

Actionable

do you have the money. is it possible/profitable to deliver it to the target?

measurable

can you accurately estimate size of the market? surveys/market research

substantial

is the segment large enough to be profitable?

targeting

have to convince consumers to buy from us compared to others in the market

1. Head to Head (me too)

2. Differentiation (Im unique)

target audience

group of consumers you expect to actually purchase the product (children’s toy is actually being bought by parent not the kid)

buyer persona

semi-fictional representation of an ideal customer that helps marketers understand/relate to the target market (name, age, interests/hobbies, which media)

target market strategies

undifferentiated, differentiated, concentrated, micro marketing

undifferentiated

(mass marketing) you want to reach as many people as possible. usually when has high market appeal things most people want/use. low cost, ads can be deployed to variety of media channels

differentiated

(segmented marketing) identifies several target markets, most common, different products for different segments

concentrated

(niche marketing)identifies target market but chooses not to serve all of them. channel all marketing efforts toward specific segment w aim of owning it over competitors + creating strong brand loyalty

micromarketing

(customized marketing) targets a specific group of individuals with a niche market based on specific info that has been collected about them

positioning statement

briefly described your brand, product/service and target market, how it meets customer needs and why its better than competition

product positioning

process of deciding/communicating how an org wants its market to think/feel about a product/service

determinant attributes

criteria on perceptual map conditions