STP - Market Segmentation,Targeting & Positioning

MARKET MARKET SEGMENTATION,SEGMENTATION,TARGETING AND TARGETING AND

POSITIONING (STP)POSITIONING (STP)

Steps in Segmentation, Steps in Segmentation, Targeting, and PositioningTargeting, and PositioningSteps in Segmentation, Steps in Segmentation,

Targeting, and PositioningTargeting, and Positioning

1. Identify Basesfor Segmenting the Market

2. Develop Profilesof Resulting Segments

3. Develop Measuresof Segment Attractiveness

4. Select TargetSegment(s)

5. Develop Positioningfor Each Target Segment

6. Develop MarketingMix for Each Target Segment Market

Positioning

MarketTargeting

Market Segmentation

Market Market SegmentationSegmentation

What is Market Segmentation?What is Market Segmentation?

Market segmentation is the process of Market segmentation is the process of dividing the total market for good or dividing the total market for good or service into several smaller groups.service into several smaller groups.

Dividing a market into distinct groups of Dividing a market into distinct groups of buyers on the basis of needs buyers on the basis of needs characteristics or behaviour who might characteristics or behaviour who might require separate product or marketing require separate product or marketing mixes.mixes.

Levels of Market Levels of Market SegmentationSegmentation

Mass Marketing:Mass Marketing: ## The seller engages in mass production, mass The seller engages in mass production, mass

distribution, and mass promotion of one product to distribution, and mass promotion of one product to all buyers.all buyers.

## Mass marketing creates the largest potential Mass marketing creates the largest potential market, which leads to the lowest costs, which in market, which leads to the lowest costs, which in turn can lead to lower prices or higher margins.turn can lead to lower prices or higher margins.

## Now a days the explosion of advertising media Now a days the explosion of advertising media and distribution channels has made it difficult and and distribution channels has made it difficult and increasingly expensive to reach a mass audienceincreasingly expensive to reach a mass audience..


Micromarketing:Micromarketing: Many companies are turning to Many companies are turning to

micromarketing these days by choosing micromarketing these days by choosing one of the four levels; one of the four levels;

Segment marketingSegment marketing

Individual marketingIndividual marketing Niche marketingNiche marketing Local marketingLocal marketing


Segment marketingSegment marketingDividing the market into different Dividing the market into different

segments on the basis of homogenous segments on the basis of homogenous

need.need.

Segmented on basis of broad similarity Segmented on basis of broad similarity

with regard to some attributeswith regard to some attributes

Segmentation is also sometimes Segmentation is also sometimes

identifying, capturing & retaining identifying, capturing & retaining

potential new markets potential new markets


Individual marketingIndividual marketing

Extreme marketing in which Extreme marketing in which

marketers focus on individual marketers focus on individual

customers.customers.

Keep track of individual tastes & Keep track of individual tastes &

preferences of individual customers preferences of individual customers

Many companies are approaching Many companies are approaching

individuals through e-mails to individuals through e-mails to

promote their products.promote their products.


Niche marketingNiche marketingMarketers effort to position their Marketers effort to position their

product or service in smaller markets product or service in smaller markets

that have similar attributes and have that have similar attributes and have

been neglected by other marketerbeen neglected by other marketer

Segment further divided into sub Segment further divided into sub

segments to cater unsatisfied needs segments to cater unsatisfied needs

of small group is called as nicheof small group is called as niche


Local marketingLocal marketingmarketers offer customized products marketers offer customized products to suit the local markets.to suit the local markets.

KFC introduced “Muslimized” or KFC introduced “Muslimized” or “Pakistani” products such as Spicy “Pakistani” products such as Spicy Chicken, Hilal Chicken, Zinger Chicken, Hilal Chicken, Zinger Extreme and more…Extreme and more…

Bases for Consumer Market Bases for Consumer Market SegmentationSegmentation

Market Segementation

GeographicalRegions, cities,

states, countries

DemographicAge,

gender,income,

occupation,religion,

social class,family size

PsychographicLife style,

personality,values,beliefs

BehavioralOccasions,Benefits,

Usage rate,Loyalty status

Bases for Segmenting Business MarketsBases for Segmenting Business MarketsBases for Segmenting Business MarketsBases for Segmenting Business Markets

Basesfor Segmenting

BusinessMarkets

Basesfor Segmenting

BusinessMarkets

DemographicsPersonalCharacteristics

SituationalFactors

OperatingCharacteristics

PurchasingApproaches

Bases for Segmenting International Bases for Segmenting International MarketsMarkets

Bases for Segmenting International Bases for Segmenting International MarketsMarkets

Political/Legal

Political/Legal

Cultural Cultural

Economic EconomicGeographicGeographic

Industrial MarketsIndustrial Markets

Requirements for Effective SegmentationRequirements for Effective SegmentationRequirements for Effective SegmentationRequirements for Effective Segmentation

• 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.

Measurable Measurable

AccessibleAccessible

SubstantialSubstantial

DifferentialDifferential

ActionableActionable

• Segments must respond differently to different marketing

mix elements & actions.

• Must be able to attract and serve the segments.

MARKET TARGETINGMARKET TARGETING

MARKET TARGETINGMARKET TARGETING

Once the firm has identified its market-Once the firm has identified its market-segment opportunities, it has to decide segment opportunities, it has to decide how many and which one to target.how many and which one to target.

Target market is a group of customers for Target market is a group of customers for whom a seller designs a particular whom a seller designs a particular marketing mix.marketing mix.

Target Market Selection ProcessTarget Market Selection Process

Evaluating the Market SegmentsEvaluating the Market Segments

Selecting the Market SegmentsSelecting the Market Segments

Evaluating Market SegmentsEvaluating Market Segments

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

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


Here the co., can consider five patterns of target Here the co., can consider five patterns of target market selection;market selection;

Single-Segment ConcentrationSingle-Segment Concentration

Selective SpecializationSelective Specialization

Product SpecializationProduct Specialization

Market specializationMarket specialization

Full market coverageFull market coverage


Single Segment ConcentrationSingle Segment Concentration: : Focusing on a single segmentFocusing on a single segment gives the gives the marketer the advantage of high sales marketer the advantage of high sales as all the efforts are concentrated on as all the efforts are concentrated on that one segmentthat one segment

Example: Mercedes concentrates on upper Example: Mercedes concentrates on upper income groupincome group


Selective Specialization:Selective Specialization:

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


Product Specialization :Product Specialization :The firm makes a certain product that it The firm makes a certain product that it

sells to several segmentssells to several segments

Example: Microscope manufacturer who Example: Microscope manufacturer who sells to university, government, and sells to university, government, and commercial laboratories. commercial laboratories.


Market specialization:Market specialization:

The firm concentrates on serving many The firm concentrates on serving many needs of a particular customer group.needs of a particular customer group.

Example: A firm sells assortment of Example: A firm sells assortment of products only to university products only to university laboratories.laboratories.


Full market coverage:Full market coverage:

Company targets the full market rather Company targets the full market rather than any specific segment.than any specific segment.

Example: Hewlett-Packard targets the full Example: Hewlett-Packard targets the full market for its printers.market for its printers.

In Full market coverage,In Full market coverage,

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

Undifferentiated marketingUndifferentiated marketing

Differentiated marketingDifferentiated marketing

GUIDELINES FOR SELECTING TARGET GUIDELINES FOR SELECTING TARGET MARKETMARKET

it should be consistent.it should be consistent. It should meet organizational goals.It should meet organizational goals. It should be consistent with organizational It should be consistent with organizational

resources.resources. It should generate sufficient profit volume.It should generate sufficient profit volume. It should have competitors small in size It should have competitors small in size

and number.and number.

MARKET POSITIONINGMARKET POSITIONING

PositioningPositioning

In In marketingmarketing, , positioningpositioning has come to has come to mean the process by which marketers try mean the process by which marketers try to create an image or identity in the minds to create an image or identity in the minds of their target market for its of their target market for its productproduct, , brandbrand, , or or organizationorganization..Kotler defined: “designing an offer so Kotler defined: “designing an offer so that it occupies a that it occupies a distinct and valueddistinct and valued place in the minds of the target place in the minds of the target customer.”customer.”

PositioningPositioning

Positioning

“Image that customers have about a product in relation to the product’s competitors”

Positioning StrategyPositioning Strategy

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

Select Positioning StrategySelect Positioning Strategy

Effective positioningEffective positioning What consumers currently think about the What consumers currently think about the

product, especially in relation to product, especially in relation to competing products.competing products.

What the marketer wants consumers to What the marketer wants consumers to think about the product.think about the product.

Which positioning strategy will elevate the Which positioning strategy will elevate the consumers’ current product image to the consumers’ current product image to the desired product image.desired product image.


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


The positioning strategy must determine where The positioning strategy must determine where a company wants to go a company wants to go And how to get there by positioning the And how to get there by positioning the product according to any of the following ways:product according to any of the following ways: Price/QualityPrice/Quality Product AttributesProduct Attributes Product UserProduct User Product UsageProduct Usage Product ClassProduct Class CompetitionCompetition SymbolSymbol

STP - Market Segmentation,Targeting & Positioning

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