Segmentation, Targeting and Positioning (STP) 9

what are components of psychographic segmentation?

self-value self-concept lifestyle

What is positioning using perceptual mapping?

using maps to position product/brand using consumer's mind + consumer's perspective, distill to few key dimensions, highlight similarity/difference

what is occasion segmentation?

when a product or service is consumed, for different occassions ie suits for every day work, suits for interviews, proms, wedding

what are ideal points in perceptual mapping?

where a particular market segment's ideal product would lie on the map -> the larger the circle, the larger the market size! this is where you want to position!

what are the steps in STP strategy?

*Segmentation* -> establish Strategy/objectives -> Segmentation methods *Targeting* -> evaluate segment attractiveness -> select target market *Positioning* -> identify/develop positioning strategy

what is involved in establishing strategy/objective (segmentation)?

- articulate mission/vision -> segmentation strategy must be consistent with these values -> use SWOT to assess current situation

what goes into selecting a target market?

- assess attractiveness of target market (opportunity+threat) - and own competency (strength and weakness)

what are the main components of a value proposition?

- target market - offering name or brand - product/service category or concept - unique point of difference/benefits that competitors don't have

potential profitability depends on what?

-fixed costs - segment size - segment adoption percentage - profit margin percentage

what are the strategies in positioning?

-value proposition -salient attributes -symbols -competition

what are steps to perceptual mapping?

1. determine consumer perceptions and evaluation of product relative to competitor 2. identify market's ideal points and size 3. identify competitor positions 4. determine consumer preferences 5. select position 6. monitor positioning strategy -> can enter another position

what is involved in segmentation methods?

segment market and develop descriptions of each segment

what are the 5 types of segmentation methods?

Geographic Demographic Psychographic Benefits Behavioural

what is a reachable segment?

segment must be aware of your product/service/brand so they can be reached CAN YOU COMMUNICATE WITH SEGMENT

what is benefit segmentation?

Rui considers a subset of behavioural segmentation - grouping on the basis of the benefits they will derive from product/service ie watching action movie because we like action! even though all moves = entertainment

what are the factors evaluated when looking at segment attractiveness?

SPIRR Substantial Profitable Identifiable Reachable Responsive

what is a profitable segment?

Segment profitability = (Segment size X Segment adoption percentage X Purchase behavior X Profit margin percentage) - Fixed costs - account for cost to entry, taxation, infrastructure, etc IS IT PROFITABLE?

what are the five aspects to evaluating segment attractiveness?

Substantial Identifiable Profitable Reachable Responsive SPIRR

what are the four targeting strategies?

Undifferentiated targeting/mass marketing Differentiated targeting strategy Concentrated targeting strategy Micromarketing

What is VALS?

Value and Lifestyle Survey -> widely used tool to support psychographic segmentation -> allows firms to identify segments and their motivations - Vertical shows level of resources (income, education, etc) - Horizontal shows 1o motivation (ideals, achievement and self-expression)

why are STP strategies important?

allow marketers to determine the value their product/service can deliver to customers -> market is subdivided into subsets of customers that have similar needs and/or habits

what is an identifiable segment?

segments can be identified and are distinct from other segments IS SEGMENT UNIQUE

multiple segmentation methods!

can be used together to lend further specificity for segments ie geodemographic -> birds of same feather flock together

what is re-positioning

changing position BUT it can be difficult Old Spice accomplished this with viral ad that successfully communicated value of their deodorant and targeted a different segment

what is a value proposition?

communicates customer benefits to be received from product or service and provides reasons for wanting to purchase - overlap customer needs/wants with offering other overlaps indicate services customer doesn't need or is unaware of etc also competitor's value proposition should be monitored and matched (but be wary of lawsuits etc)

what is positioning?

communicating value to targeted segments and how consumers think of product/brand

what is psychographic segmentation?

consumers self-select based on their behaviour and psychological reason for these choices - understand *self-values, self-concept and lifestyle* -> great for highly competitive environ

what is a responsive segment?

customers must react similarly and positively to the firm's offering WILL CONSUMER RESPOND AS INTENDED?

what does positioning involve?

defining marketing mix so target customers have a clear understanding of what product/service is, esp in comparison to competition

what is behavioural segmentation?

divide customer on basis of how they use product/service - occasion segmentation VS loyalty segmentation

what is targeting?

evaluating attractive segments identifying the methods to reach selected segments

what is an undifferentiated targeting strategy?

everyone is a customer! one product for multiple markets ie Brandy Melville's One size fits all + efficiency & lower costs - some segments excluded & little product variation/differentiation

What segmentation methods would you suggest for a small entrepreneur starting her own business selling gourmet chocolates? Justify why you would recommend those methods.

geodemographic and psychographic -> target affluent areas with people who care about source of ingredients and how things are made, as well as local-businesses also target people who want to be perceived as caring about these things (self-concept)

what is self-value?

goals for life, overriding desires that drive a person to live life what we want

What is segmentation?

grouping and identifying specific types of people into categories

what is demographic segmentation?

grouping consumers based on easily measured characteristics but very superficial view

what is lifestyle?

how we live our life to achieve our end-goal (self-value)

what is self-concept?

image people ideally have of themselves -> purchase things that allow them to fulfill that ex. show product being used by laughing people to cater to people who perceive themselves as happy how we can show who we are

Put yourself in the position of an entrepreneur who is developing a new product to introduce into the market. Briefly describe the product. Then, develop the segmentation, targeting, and positioning strategy for marketing the new product. Be sure to discuss (a) the overall strategy, (b) characteristics of the target market, (c) why that target market is attractive, and (d) the positioning strategy. Provide justifications for your decisions.

inexpensive tablet with dedicated note-taking capabilities - segments: young students, college students, educational institutions, business professionals, artists -> target based on SPIRR. college students and educational institutions with accessible funds -> concentrated targeting, one product, one market to reduce costs involved in trying to access numerous different targets with different iterations of the product -> target market is attractive becuase it is always there and growing, people would like to handwrite notes because studies show it leads to better information retention -> position it as less costly than apple, with dedicated software to optimize drawing experience so it is more accurate and user-friendly

what is a substantial segment?

it has reached a market size that is targetable, profitable, etc IS IT BIG ENOUGH

what is loyalty segmentation?

loyal customers buy exclusively from firm -> develop loyalty programs like air miles or cash-back or perks so customers are super impressed and stay loyal

what is micromarketing?

mass customization, one-on-one ie Lenovo and customizable laptops (MTO) + customer satisfaction and experience (possible) - increased cost, overheads, wait times and cost

what is a differentiated targeting strategy?

multiple product for multiple markets ie Gap (Gap, Old Navy, BR, Athleta, etc) + diff marketing mix for diff customers & more customers and coverage - higher costs, complex, *market cannibalism*

what are cookies?

no. not edibles. website trackers with unique ID of each customer so marketers can view visitors and their habits to better market

what is a concentrated targeting strategy?

one product, one market segment + focused product and market development - many segments are untapped ie Tesla

what is geographic segmentation?

organization of customers based on where they live: country, region, or neighbourhood -> birds of the same feather flock together

You have been asked to identify various segments in the market and then a potential targeting strategy. Describe the segments for a pet supply store, and then justify the best targeting strategy to use.

segment based on types of pet: cat, dog, fish, etc target segments that are substantial, profitable, idenfifiable, reachable, responsive ie dog owners -> differentiated marketing for owners of different sizes and breeds of dogs -> able to achieve large market share