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Market Segmentation, Targeting and Positioning PN Moodle Slides

This document discusses market segmentation, targeting, and positioning (STP). It defines each concept and explains why STP is important for understanding customers and developing effective marketing strategies. Specifically, it describes how segmentation involves dividing a market into subgroups with similar characteristics. Targeting involves selecting specific segments to focus on. Positioning is about managing customer perceptions of a product relative to competitors. The document outlines the STP process and provides examples to illustrate key points.

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martina
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74 views

Market Segmentation, Targeting and Positioning PN Moodle Slides

This document discusses market segmentation, targeting, and positioning (STP). It defines each concept and explains why STP is important for understanding customers and developing effective marketing strategies. Specifically, it describes how segmentation involves dividing a market into subgroups with similar characteristics. Targeting involves selecting specific segments to focus on. Positioning is about managing customer perceptions of a product relative to competitors. The document outlines the STP process and provides examples to illustrate key points.

Uploaded by

martina
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Market Segmentation, Targeting and

Positioning (STP)

Dr Paul Naughton
[email protected]
WHAT IS MARKET STP
AND WHY IT IMPORTANT?
What is marketing about…
• Marketers like to think of marketing as understanding and satisfying
customer needs
– Understanding that all customers/people are individuals with a unique set of
characteristics
• Market segmentation is the process of partitioning markets into
groups of potential consumers with similar characteristics who are
likely to exhibit similar behaviour
• The purpose of market segmentation is to ensure that elements of the
marketing mix (Product, Price, Place, Promotion) meet the needs of
different customer groups
What is Market Segmentation about…
• Markets are assumed to be heterogeneous
• Market segmentation is means of viewing a heterogeneous
market as a number of smaller homogenous markets

nt ation
e gme
S
Segmentation

Segmentation

Segmentation
Cereal Bar Consumer Motivation

Taste

Price

Health & Nutrition


What is Market Segmentation about…
Apple Newton (1993-1998)
Who are our potential customers?
Where are they?
and
How do we get their attention?
Advantages
• Can address the diversity that exists in a population
• Cost-efficient marketing strategies
• Customer retention
• Enables a business to identify key competitors
• Provides a systematic approach to market coverage
– Market opportunities will not be missed
PROCESS OF
SEGMENTATION, TARGETING
& POSITIONING
Tasks

Analyse consumer-product
relationships

Investigate segmentation
basis

Select segment(s) to target

Develop product
positioning
Process of Target Segmentation
1. Understand the individual customers (quantitative or qualitative
research – find out their categories, and understand their
experiences)
2. Group the customers on the basis of similar characteristics – music,
sport
3. Choose the segment group
4. Design a (or multiple) marketing mix(es) – product, price, distribution
& promotion mix to differentiate
Investigate segmentation Basis
• Demographic (Profile) – SES (socio-economic status) [Geo-
demographic – ACORN]
• Psychographic – Lifestyle, personality
• Behavioural – Benefits sought, purchase occasion, usage,
motivations, attitudes & perceptions (strongly linked to behaviour)

Benefit segmentation
Extra energy Robinson’s barley water
Vitamins Ribena
Natural Pure orange juice
Low calories Diet squash
Low cost Supermarket own label
Investigate segmentation Basis
• Successful Segmentation Criteria (Kotler, P. 1991)
– Measurability
– Accessibility
– Substantiality
– Differentiability
– Actionability
• Kotler, P. Marketing Management, 7th Edn, Prentice Hall, 1991.
Investigate segmentation Basis
Difficult

ease & cost Behavioural


of
measurement Psychographic

Demographic

Easy
Low High
predictability of consumer
choice behaviour
Select Segments to Target
• Rating approach for different segment attractiveness
factors:
• Market growth
• Segment profitability
• Segment size
• Competitive intensity within the segment
• PEST trends
– Each of these attractiveness factors is rated on a scale of 0-10 and
loosely categorized as high, medium or low in attractiveness.
VS
• Capability of the company
Select Segments to Target
Concentrated/focused marketing (single
segment): be the very best in a single small
segment. Also referred to as niche
marketing

Differentiated marketing (multi-segmented)


Targeting 2 or more segments by offering a
differentiated marketing mix for each

Undifferentiated marketing: Develop a


single marketing mix for all segments. A
scattergun approach. Firm is offering a
basic product that would be used by almost
all age groups and lifestyles .
Positioning
• Marketers plan positions that help give their products the
greatest advantage in selected markets
– Find out what are the most pertinent features of all
products in a product category as perceived by
consumers in a target market
– Then adjust the features and benefits of your brand to
give it the most effective position relative to the other
brands in the market
Positioning
• Two fundamental elements:
– Physical attributes - the functionality and capability
that a brand offers.
– Communication - the way in which a brand is
communicated and how consumers perceive the brand
relative to other competing brands in the market place.
High price

Performance Fashion

Low price
Repositioning Strategies
1. Image Re-positioning: keep the product and target market but
change the image
2. Product re-positioning: Change the tangible attributes and then
communicate the new proposition to the same target market
3. Intangible re-positioning: Same product but different target market
4. Tangible re-positioning Change both the product (attributes) and
the target market

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