Segmentation:

The STP Process:

•Market segmentation: Creating clusters in the
market of buyers with similar needs and preferences.
•Market targeting: Selecting one or more market
segments to enter.
•Market positioning: Establishing and
communicating the key distinctive benefit(s) of the
company’s market offering to each target.
 Preferences:
 Three patterns of preference
segments are typically
identified:
 Homogeneous preferences
 Diffused preferences
 Clustered preferences
 Segmentation and its
levels:
 Segment marketing
 Niche marketing
 Local marketing
 Individual marketing-
Mass customization
 Segmenting Consumer
Markets:
 Geographical segmentation:
 Region, Country, City, Density, Climate,
etc.
 Demographic segmentation:
 Age, Gender, Income, Family size,
Occupation, Education etc.
 Psychographic segmentation:
 Lifestyle, Personality, Values etc.
 Behavioral segmentation
 Behavioral
Segmentation
Variables
 Occasions
 Benefits
 User Status
 Usage Rates
 Loyalty Status –
 Hardcore Loyals, Split loyals, Shifting Loyals,
Switchers.
 Readiness Stage
 Attitude Toward the Product-
enthusiastic, positive, indifferent, negative & hostile.
 Segmenting Business Markets

Demographic segmentation
Industry, company size,
location variables
Operating
Technology, user status,
customer capabilities
Purchasing approaches
Structure, Negotiation, Relationship,
Policies.
Segmenting Business Markets

Situational factors
Urgency, specific application,
size of order
Personal characteristics
Buyer-seller similarity, attitudes
toward risk, loyalty
 Requirements for
Effective Segmentation

Measurable
 Size, purchasing power, and
profile of segment

Accessible
Can be reached and served
 Requirements for
Effective Segmentation
Substantial
Large and profitable enough to
serve
Differentiable
Respond


differently
Actionable
Effective programs can be developed
Single-Segment Concentration:

Product
Category

Market Segment
Selective Specialization:

Product
Category

Market Segment
Product Specialization:

Product
Category

Market Segment
Market Specialization:

Product
Category

Market Segment
Full Market Coverage:

Product
Category

Market Segment