INTRODUCTION TO STP MODEL

SEGMENTATION
Market segmentation is the process of dividing a market of potential
customers into groups, or segments, based on different characteristics. The
segments created are composed of consumers who will respond similarly to
marketing strategies and who share traits such as similar interests, needs, or
locations. The four main types of market segmentation are:
1. Demographic segmentation: age, gender, education, marital status, race,
religion, etc.
2. segmentation: values, beliefs, interests, personality, lifestyle, etc.
3. Behavioral segmentation: purchasing or spending habits, user status,
brand interactions, etc.
4. Geographic Areas: neighborhood, area code, city, region, country, etc.

TARGETING
Targeting in marketing is a strategy that breaks a large market into smaller
segments to concentrate on a specific group of customers within that
audience. It defines a segment of customers based on their unique
characteristics and focuses solely on serving them. Instead of trying to reach an
entire market, a brand uses target marketing to put their energy into
connecting with a specific, defined group within that market.
A brand might also leverage business segmentation, taking into consideration
things like industry, company size, or annual revenue. Through market
segmentation, brands get more specific about their target market. They can
focus on a small group of customers who will be most likely to benefit from
and enjoy their products.

POSITIONING
Philip Kotler defines brand positioning as “the act of designing the company’s
offering and image to occupy a distinctive place in the mind of the target
market”. In simpler words, brand positioning describes how a brand is different
from its competitors and where or how it should be placed in customers’
minds.

DIFFERENTIATION
Differentiation is the process of distinguishing a product or service from
others, to make it more attractive to a particular target market. This involves
differentiating it from competitors' products as well as a firm's own products.
It involves defining the offering’s unique position in the market by explaining
the unique benefit it provides to the target group. This may also be referred to
pinpointing a unique selling proposition of the product to make it stand out
from the crowd.

AMWAY

INTRODUCTION
Amway is an abbreviation for "American Way" and was coined in 1959 by
company founders, Jay Van Andel and Richard DeVos. Short, unique and easy
to remember, Amway has been registered as a corporate name and trademark
ever since.
In the following decades, Amway Corporation successfully established itself as
a leading multilevel marketing business, built on strong values and founding
principles that continue to sustain our company today. The business is built on
the simple integrity of helping people lead better lives.
Today, Amway is a multibillion-dollar international business representing
freedom and opportunity to millions of people in more than 88 countries and
territories around the world. Amway generates US $ 9.2 billion (January -
December '09) in sales at estimated retail through this global product
distribution network. We offer over 3 million Business Owners the inspiration
to grow those businesses, and we work hard to provide new and better ways
for them to achieve their life goals.

Q1. What is the product or service of the company?

Amway's product line grew from LOC, with the laundry detergent SA8 added in 1960, and later
the hair care product Satinique (1965) and the cosmetics line Artistry (1968). Today Amway
manufactures over 450 products, with manufacturing facilities in China, India and the US, as well
as Nutrilite organic farms in Brazil, Mexico and the US (California and Washington State).[citation
needed] Amway brands include Artistry, Atmosphere, Body Blends, Bodykey, Body Works, Clear
Now, eSpring, Glister, iCook, Legacy of Clean, Nutrilite, Peter Island, Perfect Empowered
Drinking Water, Personal Accents, Ribbon, Satinique, Artistry Men and XS.
In 2018, nutrition and wellness products were 52% of total sales, and beauty and personal care
products, 26%

The Amway provide up to 450 unique and high quality products. Among the
products, it separate into few categories which are nutrition, beauty, bath and body ,
home care, home tech , home appliances, tiffany costume jewellery, fashion
accessories, home and decor , food and beverages and equipment. There are many
products that Amway provide inside each product categories.

In the product mix dimension, Amway main product width is Nutrition, Beauty, Bath
and Body and Home product. For the nutrition products, length is food supplement,
antioxidants , fortified beverages, weight management, children’s supplement, bee
treasures, tropical herbs, wellness pack and wellness sales aids. The depth of the
nutrition products are different packing of size per bottle like 450g per bottle, 30
stick packs per box. (amway2u, 2012)

For beauty products, the length is skin care product skin care creamer, intensive skin
care, essentials, skin care time defiance, pure white, cosmetics for eye, lip, face and
beauty accessories. The depth of the beauty products are different packaging in the
smallest size bottle of 30ml to the largest 150ml and packs from smallest 15grams
and to largest 125grams. (amway2u, 2012)

For bath and body products, the length is hair care, body care, oral care, men skin
care, Allano and aloe care, Sudzy and color creation. The depth of bath and body
products is packed in smallest 150ml largest packing of 400ml and packs of 9grams
to largest packing of 200grams. (amway2u, 2012)

For home care products, the length is laundry care, household product, kitchen care,
car care and homecare sales aids. Same with other, depth of home care products are
also in smallest size of 500ml to 1litre, packing in smallest 1KG to largest 3KG and
250grams to 500grams. (amway2u, 2012)

The products of various lines are not consistency, because the entire product is for
different purpose: nutrition, skin care, body care and for home care.

For bath and body category and nutrition category products, it is convenience which
customer will buy it frequently with a minimum comparison effort. Besides that,
Beauty category and home care products are shopping products, customer are less
frequently purchase this type of product, it depends on suitability, quality, price and
style.

product line, lenght, width, depth & consistency

category consumer product – convenience/shopping/specialty/unsought

Q2. How they have segmented their market?

Market segmentation involves dividing a market into smaller groups of buyers with
different needs, characteristics, or behaviours that might require separate different
marketing strategies. There are four segmentation categories which is geographic
segmentation, demographic segmentation, psychographic segmentation, and
behavioural segmentation. But Amway only uses three combinations of consumer
market segmentations which are demographic, psychographic and behavioural
segmentation.

The very first segmentation is Demographic segmentation, which includes three

factors of Age and Life-Cycle Stage which Amway products are meant for all age of
groups. For example the nutritive food supplement that Amway provide is suitable
for all neither age group nor matter for the children, adult or the old people also can
have the product. Other than that, Gender Segmentation is also applicable because
Amway product also can use by both gender, there are many type of product that
Amway provide like fashion accessories, equipment, stationary personal item all that
can be use by female or male, but some products like cosmetics products only target
specific for female customers. Next is Income Segmentation which Amway is
targeting for the high income customer, because the thing that Amway sell are
slightly expensive.

The second segmentation is Psychographic segmentation, which includes factor of

Social Class, which Amway products are more affordable for the middle or upper
social class people. The product that Amway provide like beauty product, nutrition
product or home product are slightly expensive if compare with other competitor
because of the quality of product, so lower social class may not affordable for the
Amway product. The customers enjoy for the benefit of using a high quality product
which is available to them at their door steps.

The last segmentation is Behavioural Segmentation which include of Loyalty Status

that Amway differentiate its customer with loyal status, for those who always support
Amway product, Amway might give some discount or giving bonus point to the
customer when they purchasing product from Amway every year. The point that
given can use to exchange for the Amway product with term and condition applied
citation. Besides, another factor of behavioural segmentation is User Status and
Usage Rate, which Amway differentiate its customer user status and usage rate by
giving them point base on items they brought, the more point the customer hold,
the heavier usage rate of the customer

Q3. What is the segmentation and what is the basis of

segmentation of that company for the
product/service?

Q4. What is target market? What is the profile of the

target market of the company in question?
Amway evaluating each market segment’s attractiveness and selecting one or more market
segments to enter. Amway uses the differentiated marketing or segmented marketing
strategy. Amway products target demographic segmentation which consists of both gender
female and male customer, but Amway is more slightly focused on the female market. Most
of the products that Amway sells are more attractive to female, for example the beauty
product is all about the skin care, cosmetic and beauty accessories and it also target the
housewife, the products that are targeting more for the housewife is the laundry care
product and kitchen product. Other than that, Amway products also target psychographic
segmentation’s social class those who have higher income customer, this is because the
products is more expensive especially for customer who wants to make their life better and
healthy Amway target them because they are more afford to buy their product for example
like the eSpring Water Treatment System, Air Purifier Machine, Home Alarm System and
much more
Q5. How they position their product/service in the
minds of the customers?
Amway’s positioning strategy is “More for more”. Amway provides product that are better
than other competitors, higher quality of products and better services. Hence, Amway’s
products result in higher price compared to other competitors to cover back its higher costs.
Customers who buy Amway’s products are willing to pay more for better products and
services

Q6. How the company do differentiates their

product/service from the offerings of their
competitors?
Amway uses product, service and image to differentiate their company to gain competitive
advantages. Firstly, Amway’s provide products which are better in quality and performance
compared to other competitor in market. Secondly, Amway provide warranty to every
product for a period of time, and Amway also provides maintenance services to their
customer to maintain their home product like water treatment system and air purifier
machine. Lastly, Amway uses image differentiation; Amway’s logo consists of three linked
circles which are Home, Beauty and Nutrition, this three factors are important to our life.