What is segmentation?
dividing the market into distinct groups using segmentation methods
what is targeting
choosing which segment to serve
What is positioning?
creating a distinctive image for the product in the target segment’s mind
steps in STP process
- Establish strategy or objectives (segmentation)
- Use segmentation methods (segmentation)
- evaluate segment attractiveness (targeting)
- select target market (targeting)
- identify and develop positioning strategy (positioning)
how to establish strategy or objectives
- conduct swot analysis
- align segmentation with mission and objectives
- set smart objectives
segmentation methods
- geographic: location
- demographic: age, gender, income, and education
- psychographics: lifestyles, value, and self-perception
- benefit: based on desired benefits from a product
- behavioural: consumer behaviour, purchasing habit, and customer loyalty.
how to evaluate segment attractiveness
- identifiable
- reachable
- responsive
- subsantial
- profitable
strategies to select target market
- undifferenciated
- differentiated
- concentrated
- micromarketing
What is undifferentiated marketing strategy?
same strategy for all consumers, example water
What is differentiated marketing strategy?
different strategy for multiple segments. example, colgate toothpaste for different ages/needs
What is a concentrated marketing strategy?
focus on one specific segment example, niche products tesla and rolex
what is micromarketing strategy?
tailored marketing for individual customers example, customized sneakers
purpose of positioning statement
communicates the brand’s value proposition and how it meets the needs of the target segment. it also follows a specific format
