STP Marketing

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1 Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights rese McGraw-Hill/Irwin STP Marketing 1) Segment - identify variables, develop profiles 2) Target - evaluate attractiveness of each segment, select targets 3) Position - select how want consumers to perceive product

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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

STP Marketing

1) Segment - identify variables, develop profiles 2) Target - evaluate attractiveness of each segment, select

targets 3) Position - select how want consumers to perceive

product

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Reasons forSegmenting and Targeting

Segmenting is grouping customers or prospects according to common characteristics, needs, wants, and/or desires.

Targeting is analyzing, evaluating, and prioritizing those market segments deemed most profitable to pursue.

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Effective Segmentation:

1) Measurability - can you measure segment? 2) Accessibility - can segment be reached? 3) Profitability - what’s the segment’s potential?

See Table 7-8, page 263!

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Types of Market Segmentation

Behavioral segments Demographic segments Ethnic segments Geodemographic segments Psychographic segments Lifestyle segments Life stage segments Relationship Segments Adopter Segments

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Types of Segmentation

Geographic Regions Population size Climate Retail trading area

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Types of Segmentation

Demographic Age – Boomers vs. Gen X vs. Gen Y Gender – males vs. females vs. ????? Family size/life cycle Income Occupation Education Race

http://advertising.utexas.edu/world/index.asp

Geodemographics -- PRIZMhttp://www.claritasexpress.com

http://cluster2.claritas.com/Express/Default.wjsp?ID=60

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Demographic Trends

1) Changing families later marriage fewer kids higher divorce working spouses aging parents – “SANDWICH GENERATION”

2) Nonfamily households 3) Geographic shifts 4) Higher education 5) Ethnic population

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Emerging Markets

People of Color Buying power has doubled in last decade Nearly 1 in 3 claims ethnic identity Companies struggling to understand and develop multiethnic

awareness and advertising know-how Toyota fiasco with RAV4!

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African Americans – demos

13% of total population Growth rate slowing Spending power: $572 billion Geo location: TX, D.C., NY, MI, IL, PA, CA, GA, CT,

IN Preferred media: TV, Mag, radio Lifestyle/values: distrust corporations, value self image,

family/home, religion is cornerstone of lifestyle

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Latinos – demos

12.5% of total population Fastest growth rate – just passed African Americans Spending power: $452 billion Geo location: TX, FL, NY, NJ, IL, CA, Preferred media: Spanish radio, billboards, print ads Lifestyle/values: family and religion, value personal

interactions, work hard for financial security, sports and family activities, many speak Spanish at home

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Asian Americans

3% of total population Highest median hh income Spending power: $253 billion Geo location: CA, TX, NY, HI Preferred media: Print, TV (English or native) Lifestyle/values: value family, tradition, authority, save

money, loyal to companies who value them, price sensitive.

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Women

52% of total population Purchase 80% of retail goods Buy 65% cars Own more than half of all stocks Represent half of those online Preferred media: Magazine, radio, time permitting!

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Gay and Lesbian Markets

16 million estimated (accuracy issues) Spending power: $445 billion Geo location: Major urban areas with growth in smaller

towns GM: San francisco, Atlanta, Austin, Seattle LF: Albuquerque, Iowa City, Santa Fe

Lifestyle/values: Trendsetters, more discretionary income, travel.

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Types of Segmentation

Psychographic:VALS

Personality

“GeoVALS” http://www.sric-bi.com/VALS/geovals.shtml

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VALS 2 Typology Exhibit 5-4 See Page 155

Slide 26

Abundant resources

Minimal resources

Actualizers

Fulfilled Achievers Experiencers

Believers Strivers Makers

Strugglers

Principleoriented

Statusoriented

Actionoriented

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Types of Segmentation

Behavioristic How segments use product: Purchase Occasion Usage rate Benefits sought

Relationship segmentation Degree of Loyalty: None Brand Advocate See Table 7-4!

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Descriptive Model ofSegmenting and Targeting

Figure 7-6,

p.258

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How Targeting Works

Targeting is done by using profile characteristics of segments to draw boundaries around a particular group of customer or prospects that are projected to respond well to a brand and its marketing communication.

Then, marketers estimate the group’s size. The next step is to prioritize the segments. A company then develops message strategies and media

plans for select segments.

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Finally, Positioning!

It’s not what you do to the product, but what you do to the mind!

How do you want consumer to perceive your product? i.e. It’s not delivery, its Dijorno…. Get the feeling…..

Remember….its all PERCEPTIONS!

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Positioning Strategy

1. Who’s the target market? Research! 2. Choice criteria – what product attributes are important

to target? 3. Identify competitors – strengths vs. weaknesses 4. Determine competitors’ position – based on attributes

Perceptual map 5. Determine unique offering

How is our brand different from competition? 6. Select a position -- Must consider laws of positioning

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Positioning Laws

1. Law of leadership It’s better to be first than it is to be better

2. Law of category If you can’t be first, set up a new category. People are interested in what’s new, not what’s better.

3. Law of the mind It’s better to be first in mind than first in marketplace. Modified law of leadership – have an easy name!

4. Law of perception Marketing is not a battle of products, it’s a battle of

perceptions.

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Positioning laws

5. Law of focus The most powerful concept in marketing is owning a word in

the prospects mind. Must be simple and benefit oriented.

6. Law of exclusivity Two companies cannot own the same word in a prospect’s

mind. Burger king cannot own “fastfood”

7. Law of the ladder The strategy to use depends on which rung you occupy on the

ladder. Avis, we try harder.

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Laws cont’d

8. Law of Duality – In the long run, it’s a 2 horse race. Coke vs. pepsi Listerine vs. scope

9. Law of the opposite Determine second place based directly on leader Burger King – broiled, not fried.

10. Law of division – a category will ultimately divide Vans vs. minivans vs. SUV vs. stationwagons