STP - Market Segmentation, Targeting & Positioning [PDF]

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MARKET SEGMENTATION, TARGETING AND POSITIONING (STP)



Steps Steps in in Segmentation, Segmentation, Targeting, Targeting, and and Positioning Positioning 6. Develop Marketing Mix for Each Target Segment 5. Develop Positioning for Each Target Segment 4. Select Target Segment(s) 3. Develop Measures of Segment Attractiveness 2. Develop Profiles of Resulting Segments 1. Identify Bases for Segmenting the Market



Market Positioning Market Targeting



Market Segmentation



Market Segmentation



What is Market Segmentation? Market segmentation is the process of dividing the total market for good or service into several smaller groups. Dividing a market into distinct groups of buyers on the basis of needs characteristics or behaviour who might require separate product or marketing mixes.



Levels of Market Segmentation Mass Marketing: # The seller engages in mass production, mass distribution, and mass promotion of one product to all buyers. # Mass marketing creates the largest potential market, which leads to the lowest costs, which in turn can lead to lower prices or higher margins. # Now a days the explosion of advertising media and distribution channels has made it difficult and increasingly expensive to reach a mass audience.



Levels of Market Segmentation Micromarketing: Many companies are turning to micromarketing these days by choosing one of the four levels;    



Segment marketing Individual marketing Niche marketing Local marketing



Levels of Market Segmentation Segment marketing Dividing the market into different segments on the basis of homogenous need. Segmented on basis of broad similarity with regard to some attributes Segmentation is also sometimes identifying, capturing & retaining potential new markets



Levels of Market Segmentation Individual marketing Extreme marketing in which marketers focus on individual customers. Keep track of individual tastes & preferences of individual customers Many companies are approaching individuals through e-mails to promote their products.



Levels of Market Segmentation Niche marketing Marketers effort to position their product or service in smaller markets that have similar attributes and have been neglected by other marketer Segment further divided into sub segments to cater unsatisfied needs of small group is called as niche



Levels of Market Segmentation Local marketing marketers offer customized products to suit the local markets. KFC introduced “Muslimized” or “Pakistani” products such as Spicy Chicken, Hilal Chicken, Zinger Extreme and more…



Bases for Consumer Market Segmentation



Market Segementation



Geographical Regions, cities, states, countries



Demographic Age, gender, income, occupation, religion, social class, family size



Psychographic Life style, personality, values, beliefs



Behavioral Occasions, Benefits, Usage rate, Loyalty status



Bases Bases for for Segmenting Segmenting Business Business Markets Markets Personal Characteristics



Situational Factors



Demographics



Bases Bases for for Segmenting Segmenting Business Business Markets Markets Purchasing Approaches



Operating Characteristics



Bases Bases for for Segmenting Segmenting International International Markets Markets Industrial Industrial Markets Markets



Geographic Geographic



Economic Economic



Cultural Cultural



Political/ Political/ Legal Legal



Requirements Requirements for for Effective Effective Segmentation Segmentation Measurable Measurable



• Size, purchasing power, profiles of segments can be measured.



Accessible Accessible



• Segments must be effectively reached and served.



Substantial Substantial Differential Differential Actionable Actionable



• Segments must be large or profitable enough to serve.



• Segments must respond differently to different marketing mix elements & actions. • Must be able to attract and serve the segments.



MARKET TARGETING



MARKET TARGETING Once the firm opportunities, it one to target.



has identified its has to decide how



market-segment many and which



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



Target Market Selection Process Evaluating the Market Segments



Selecting the Market Segments



Evaluating Market Segments Before selecting the respective market segment, the company should evaluate the possible market segments in the current markets. It should identify and select its target consumers, give them their product according to their needs and establish that group of consumer in to permanent market segments.



Selecting the Market Segments Here the co., can consider five patterns of target market selection; Single-Segment Concentration  Selective Specialization Product Specialization Market specialization Full market coverage



Selecting the Market Segments Single Segment Concentration: Focusing on a single segment gives the marketer the advantage of high sales as all the efforts are concentrated on that one segment Example: Mercedes concentrates on upper income group



Selecting the Market Segments Selective Specialization: Process in which the company focuses its resources on a few segments and develops its expertise in fulfilling the needs of those segments



Selecting the Market Segments Product Specialization : The firm makes a certain product that it sells to several segments Example: Microscope manufacturer who sells to university, government, and commercial laboratories.



Selecting the Market Segments Market specialization: The firm concentrates on serving many needs of a particular customer group. Example: A firm sells assortment of products only to university laboratories.



Selecting the Market Segments Full market coverage: Company targets the full market rather than any specific segment. Example: Hewlett-Packard targets the full market for its printers.



In Full market coverage, Large firms can cover a whole market into two broad ways; Undifferentiated marketing Differentiated marketing



GUIDELINES FOR SELECTING TARGET MARKET  it should be consistent.  It should meet organizational goals.  It should be consistent with organizational resources.  It should generate sufficient profit volume.  It should have competitors small in size and number.



MARKET POSITIONING



Positioning In marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. Kotler defined: “designing an offer so that it occupies a distinct and valued place in the minds of the target customer.”



Positioning



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



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



Select Positioning Strategy Effective positioning  What consumers currently think about the product, especially in relation to competing products.  What the marketer wants consumers to think about the product.  Which positioning strategy will elevate the consumers’ current product image to the desired product image.



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



Select Positioning Strategy The positioning strategy must determine where a company wants to go And how to get there by positioning the product according to any of the following ways:       



Price/Quality Product Attributes Product User Product Usage Product Class Competition Symbol