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© 2009 South-Western, a part of Cengage Learning
Chapter 6
Market Segmentation,
Positioning, and the
Value Proposition
PPT 6-1
2
STP Marketing and 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. (NOT illegal or unethical!)
2. Positioning: Designing and 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
PPT 6-2
3
Beyond STP—Regular Assessment
1. Reassess segmentation strategy: Exam the current target segment to develop new and
better ways of meeting its needs. Change the target and reposition the brand to a new
segment.
2. Pursue product differentiation strategy: Emphasize or create differences in brands to
distinguish them from competitors. Advertising plays a critical role because the consumer
will have to be convinced that the difference is meaningful.
PPT 6-3
4
Identifying Target Segments: Market Segmentation
Demographics
Geography
Psychographics
Lifestyles
Benefits
Commitment Levels
Usage Patterns
PPT 6-4
5
The STP Marketing Process(Segmenting, Targeting, Positioning)
1. Break the broad market into smaller, more homogenous segments
2. Specifically target discrete market segments
3. Position the brand to appeal to the targeted segments
PPT 6-5
6
Segmenting by Usage and Commitment
Advertising and promotion targeted to: Heavy users Nonusers Brand-loyal users Switchers/Variety seekers Emergent Consumers
– Point of entry marketing strategy
PPT 6-6
7
Demographic Segmentation
Age Gender Race Marital Status Income Education Occupation
PPT 6-7
8
How would you describe the
demographic segment targeted by this
advertising campaign?
How would you describe the
demographic segment targeted by this
advertising campaign?
PPT 6-8
Ad in Context Example
9
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?
PPT 6-9
Ad in Context Example
10
Geographic Segmentation
Country Region State City Neighborhood Geo-demographic
PPT 6-10
11
Psychographics and Lifestyle Segmentation
Activities
Interests
OpinionsLifestyle
Lifestyle segmentation provides insight into consumer’s motivations
PPT 6-11
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Benefit Segmentation
Safety?Prestige?
Fuel Economy?PPT 6-12
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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
PPT 6-13
14
STP Marketing is used in the business-to-business market
as well as the consumer market.
STP Marketing is used in the business-to-business market
as well as the consumer market.
PPT 6-14
Ad in Context Example
15
Prioritizing Target Segments
1. Examine your ability to deliver value to the segments and costs of new capabilities—distinct competencies of the firm
2. Research segment size, growth potential and usage frequency
3. Assay the competitive environment
4. Find a niche you can scratch
PPT 6-15
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Effective Positioning
Deliver on the brand promise
There is magic in consistency
Make the positioning different and simple for consumers to understand
PPT 6-16
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Fundamental Positioning Themes
Benefit Positioning
User Positioning
Competitive Positioning
PPT 6-17
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Do you think this ad for Ryka shoes is
emphasizing benefit, user, or competitive
positioning?
Do you think this ad for Ryka shoes is
emphasizing benefit, user, or competitive
positioning?
PPT 6-18
Ad in Context Example
19
Repositioning
Used to revive an ailing brand or fix a lackluster new market entry
Advertising themes and positioning can be trendy and become outdated
The challenge: Changing perceptions of a brand forged over years of advertising.
PPT 6-19
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Capturing the Value Proposition
VVAALLUUEE
BenefitsBenefits
Relative PriceRelative Price
FunctionalEmotional
Self-expressive
PPT 6-20