Date post: | 30-Mar-2015 |
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Market Segmentation, Positioning, & the Value Proposition
6
Objectives
• Explain STP Process• Segmentation Bases• Target Segment Criteria• Elements of Effective Positioning• Creating Brand Value/Equity
STP Marketing & the Evolution of Marketing Strategy
1. Target Market: A sub-group of a larger market chosen as the focal point for a marketing or advertising campaign.
2. Positioning: Designing & representing a brand in a way that is distinct in the consumer’s mind.
3. Positioning Strategy: Selecting key themes to communicate to a target market.
4. Marketing Strategy: Evolves as a result of 1-3
Beyond STP—Regular Assessment
1. Reassess segmentation strategy: A detailed examination of the current target segment to develop new & better ways of meeting its needs, or a need to change the target & reposition the brand to a new segment.
2. Pursue product differentiation strategy: Product differentiation is a firm’s effort to emphasize or even create differences in brands to distinguish them from competitors. Advertising plays a critical role as part of the product differentiation strategy because the consumer will have to be convinced that the difference is meaningful.
The STP Marketing Process(Segmenting, Targeting, Positioning)
1. Break the market into smaller, more homogenous segments
2. Specifically target discrete market segments
3. Position the brand to appeal to the targeted segments
Identifying Target Segments: Market Segmentation
Demographics
Geography
Psychographics
Lifestyles
Benefits
Commitment Levels
Usage Patterns
Segmenting by Usage & Commitment
• Advertising & promotion targeted to:– Heavy users– Nonusers– Brand-loyal users– Switchers/Variety seekers– Emergent Consumers
Demographic Segmentation
1. Age2. Gender3. Race4. Marital Status5. Income6. Education7. Occupation
How would you describe the demographic
segment targeted by this advertising campaign?
How would you describe the demographic
segment targeted by this advertising campaign?
How about this ad? What is the target
demographic for this ad campaign?
How about this ad? What is the target
demographic for this ad campaign?
Geographic Segmentation
Psychographics & Lifestyle Segmentation
Activities
Interests
OpinionsLifestyle
Lifestyle segmentation provides insight into consumer’s motivations
Benefit Segmentation
Passenger Safety vs speed?
Prestige?
Fuel Economy?
Design?
Business to Business Markets
Markets segmented by:
• Usage rates• Geographic location• SIC (Standard Industrial
Classification) Code• Stage in the purchase process: first
time vs. experienced buyers• Benefits desired
SIC Codes• Standard Industrial Classification (SIC)= 2,3,4-digit SIC.
• Enter a SIC CODE:Enter keyword(s):BEER• 2082 Malt Beverages • 2086 Bottled and Canned Soft Drinks and Carbonated Waters • 3411 Metal Cans • 3585 Air-Conditioning and Warm Air Heating Equipment and
Commercial and Industrial Refrigeration Equipment • 5149 Groceries and Related Products, Not Elsewhere Classified • 5181 Beer and Ale • 5813 Drinking Places (alcoholic Beverages) • 5921 Liquor Stores • 5963 Direct Selling Establishments
Prioritizing Target Segments
Examine your ability to deliver value to the segments & costs of new capabilities—distinct competencies of the firm
Research segment size, growth potential & usage frequency
Assay the competitive environment
Find a niche you can scratch
Effective Positioning….
• …is based on substance of the brand’s values
• …is consistent over time
• …is both simple & distinctive
Fundamental Positioning Themes
• Benefit Positioning
• User Positioning
• Competitive Positioning
Do you think this ad for Pepsi is emphasizing
benefit, user or competitive positioning?
Do you think this ad for Pepsi is emphasizing
benefit, user or competitive positioning?
Repositioning
• Used to revive an ailing brand or fix a lackluster new market entry
• The challenge: Changing perceptions of a brand forged over years of advertising.
Capturing the Value Proposition
VALUE
Benefits
Relative Price
FunctionalEmotional
Self-expressive
Review/?s
1.Explain STP Process
2.Segmentation Bases
3.Target Segment Criteria
4.Elements of Effective Positioning
5.Creating Brand Value/Equity