MARKET SEGMENTATION, TARGETING AND POSITIONING (STP)

Steps in Segmentation, Targeting, and Positioning

6. Develop Marketing Mix for Each Target Segment 5. Develop Positioning for Each Target Segment 4. Select Target Segment(s) 3. Develop Measures of Segment Attractiveness

Market Positioning

Market Targeting
Market Segmentation

2. Develop Profiles of Resulting Segments

1. Identify Bases for Segmenting the Market

Market Segmentation

What is Market Segmentation?

Market segmentation is the process of dividing the total market for good or service into several smaller groups. Dividing a market into distinct groups of buyers on the basis of needs characteristics or behaviour who might require separate product or marketing mixes.

Levels of Market Segmentation

Mass Marketing:
# The seller engages in mass production, mass distribution, and mass promotion of one product to all buyers. # Mass marketing creates the largest potential market, which leads to the lowest costs, which in turn can lead to lower prices or higher margins. # Now a days the explosion of advertising media and distribution channels has made it difficult and increasingly expensive to reach a mass audience.

Levels of Market Segmentation

Micromarketing: Many companies are turning to micromarketing these days by choosing one of the four levels;
Segment marketing Individual marketing Niche marketing Local marketing

Levels of Market Segmentation

Segment marketing
Dividing the market into different segments on the basis of homogenous need. Segmented on basis of broad similarity with regard to some attributes Segmentation is also sometimes identifying, capturing & retaining potential new markets

Levels of Market Segmentation

Individual marketing
Extreme marketing in which marketers focus on individual customers.

Keep track of individual tastes & preferences of individual customers

Many companies are approaching individuals through e-mails to promote their products.

Levels of Market Segmentation

Niche marketing
Marketers effort to position their product or service in smaller markets that have similar attributes and have been neglected by other marketer Segment further divided into sub segments to cater unsatisfied needs of small group is called as niche

Levels of Market Segmentation

Local marketing
marketers offer customized products to suit the local markets. KFC introduced Muslimized or Pakistani products such as Spicy Chicken, Hilal Chicken, Zinger Extreme and more

Bases for Consumer Market Segmentation

Market Segementation

Geographical
Regions, cities, states, countries

Demographic Age, gender, income, occupation, religion, social class, family size

Psychographic Life style, personality, values, beliefs

Behavioral Occasions, Benefits, Usage rate, Loyalty status

Bases for Segmenting Business Markets

Personal Characteristics

Demographics

Situational Factors

Bases for Segmenting Business Markets Purchasing Approaches

Operating Characteristics

Bases for Segmenting International Markets

Industrial Markets
Political/ Legal

Geographic

Economic

Cultural

Requirements for Effective Segmentation

Measurable Accessible Substantial Differential
Size, purchasing power, profiles of segments can be measured. Segments must be effectively reached and served. Segments must be large or profitable enough to serve.

Segments must respond differently to different marketing mix elements & actions.

Actionable

Must be able to attract and serve the segments.

MARKET TARGETING

MARKET TARGETING
Once the firm has identified its marketsegment opportunities, it has to decide how many and which one to target. Target market is a group of customers for whom a seller designs a particular marketing mix.

Target Market Selection Process

Evaluating the Market Segments

Selecting the Market Segments

Evaluating Market Segments

Before selecting the respective market segment, the company should evaluate the possible market segments in the current markets.

It should identify and select its target consumers, give them their product according to their needs and establish that group of consumer in to permanent market segments.

Selecting the Market Segments

Here the co., can consider five patterns of target market selection;
Single-Segment Concentration

Selective Specialization
Product Specialization

Market specialization
Full market coverage

Selecting the Market Segments

Single Segment Concentration: Focusing on a single segment gives the marketer the advantage of high sales as all the efforts are concentrated on that one segment
Example: Mercedes concentrates on upper income group

Selecting the Market Segments

Selective Specialization: Process in which the company focuses its resources on a few segments and develops its expertise in fulfilling the needs of those segments

Selecting the Market Segments

Product Specialization :
The firm makes a certain product that it sells to several segments Example: Microscope manufacturer who sells to university, government, and commercial laboratories.

Selecting the Market Segments

Market specialization: The firm concentrates on serving many needs of a particular customer group. Example: A firm sells assortment of products only to university laboratories.

Selecting the Market Segments

Full market coverage: Company targets the full market rather than any specific segment. Example: Hewlett-Packard targets the full market for its printers.

In Full market coverage,

Large firms can cover a whole market into two broad ways;
Undifferentiated marketing Differentiated marketing

GUIDELINES FOR SELECTING TARGET MARKET it should be consistent. It should meet organizational goals. It should be consistent with organizational resources. It should generate sufficient profit volume. It should have competitors small in size and number.

MARKET POSITIONING

Positioning
In marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. Kotler defined: designing an offer so that it occupies a distinct and valued place in the minds of the target customer.

Positioning

Positioning Image that customers have about a product in relation to the products competitors

Positioning Strategy
Key to developing the appropriate marketing mix is the positioning strategy of the product.

Select Positioning Strategy

Effective positioning What consumers currently think about the product, especially in relation to competing products. What the marketer wants consumers to think about the product. Which positioning strategy will elevate the consumers current product image to the desired product image.

Select Positioning Strategy

Position Mapping- creating a visual description about consumer perceptions of a product on two or more dimensions in relation to competitors.

Select Positioning Strategy

The positioning strategy must determine where a company wants to go And how to get there by positioning the product according to any of the following ways:

Price/Quality Product Attributes Product User Product Usage Product Class Competition Symbol