Ch 6 Flashcards
The STP Process
Segmentation
Step 1: strategy/objectives
Step 2: Segmentation bases
Targeting
Step 3: Evaluate segment attractiveness
Step 4: Select Target market
Positioning
Step 5: Identify and Develop Positioning Strategy
Step 1: establish overall strategy or objective
Articulate the mission and the objectives of the company’s marketing strategy clearly
Segmentation strategy must be consistent with and derived from firm’s mission and objectives as well as strengths, weaknesses, opportunities and threats (SWOT)
Step 2: segmentation bases
Geographic, demographic, psychographic, behavioural
Geographic
organizes customers into groups on the basis of where they live
Demographic
groups consumers according to who they are using easily measured, objective characteristics such as age, gender, income, education, race, occupation, religion, marital status, family size, home ownership, family life cycle
Psychographic
how consumers actually describe themselves or how they live (personality, lifestyle, motives)
Innovators/Thinkers/Believers/Achievers/Strivers/Experiencers/Makers/Survivors
Behavioural
groups consumers on the basis of why they buy, how often and how they plan to use the products
occasional/benefit/loyalty
Occasion segmentation
based on when a product is purchased or consumed
Benefit segmentation
considers benefits customers are looking for from products
Loyalty segmentation
customers that feel so strongly that the firm can meet their relevant needs so well that competitors are virtually excluded from their consideration
Geodemographic segmentation
combination of geographic, demographic and lifestyle characteristics
Better to use multiple segmentation methods
Step 3: evaluate segment attractiveness
identifiable, reachable, responsive, substantial, profitable
Identifiable
Determine who is within their market to be able to design products to meet their needs
Need to ensure that segments are distinct from one another
Who is their market, are the segments unique, does each segment require a unique marketing mix
Reachable
Consumers must know the product exists, understand what it can do for them and recognize how to buy it
Responsive
For segmentation strategy to be successful, customers in the segment must react similarly and positively to the firm’s offering
Customers must:
Reach positively to firm’s offering
Move toward the firm’s products/services
Accept the firm’s value proposition