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Market Segmentation, Positioning, and the Value Proposition

Market Segmentation, Positioning, and the Value Proposition. STP Marketing and the Evolution of Marketing Strategy. Target Market : A sub-group of a larger market chosen as the focal point for a marketing or advertising campaign. ( NOT illegal or unethical!)

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Market Segmentation, Positioning, and the Value Proposition

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  1. Market Segmentation, Positioning, and the Value Proposition

  2. STP Marketing and the Evolution of Marketing Strategy • Target Market: A sub-group of a larger market chosen as the focal point for a marketing or advertising campaign. (NOT illegal or unethical!) • Positioning: Designing and representing a brand in a way that is distinct in the consumer’s mind. • Positioning Strategy: Selecting key themes to communicate to a target market. • Marketing Strategy: Evolves as a result of 1-3 PPT 6-2

  3. Beyond STP—Regular Assessment • Reassess segmentation strategy: • Exam the current target segment to develop new and better ways of meeting its needs. • Change the target and reposition the brand to a new segment. • Pursue product differentiation strategy: • Emphasize or create differences in brands to distinguish them from competitors. • Advertising plays a critical role because the consumer will have to be convinced that the difference is meaningful. PPT 6-3

  4. Identifying Target Segments: Market Segmentation Demographics Geography • Psychographics Lifestyles Commitment Levels Benefits Usage Patterns PPT 6-4

  5. The STP Marketing Process(Segmenting, Targeting, Positioning) • Break the broad market into smaller, more homogenous segments 2. Specifically target discrete market segments 3. Position the brand to appeal to the targeted segments PPT 6-5

  6. Segmenting by Usage and Commitment Advertising and promotion targeted to: • Heavy users • Nonusers • Brand-loyal users • Switchers/Variety seekers • Emergent Consumers • Point of entry marketing strategy PPT 6-6

  7. Demographic Segmentation • Age • Gender • Race • Marital Status • Income • Education • Occupation PPT 6-7

  8. Ad in Context Example How would you describe the demographic segment targeted by this advertising campaign? PPT 6-8

  9. Ad in Context Example How about this ad? What is the target demographic for this ad campaign? PPT 6-9

  10. Geographic Segmentation • Country • Region • State • City • Neighborhood • Geo-demographic PPT 6-10

  11. Activities Interests Psychographics and Lifestyle Segmentation Lifestyle Opinions Lifestyle segmentation provides insight into consumer’s motivations PPT 6-11

  12. Benefit Segmentation Prestige? Safety? PPT 6-12 Fuel Economy?

  13. Markets segmented by: Usage rates Geographic location SIC (Standard Industrial Classification) Code Stage in the purchase process: first time vs. experienced buyers Benefits desired Business to Business Markets PPT 6-13

  14. Ad in Context Example STP Marketing is used in the business-to-business market as well as the consumer market. PPT 6-14

  15. Prioritizing Target Segments • Examine your ability to deliver value to the segments and costs of new capabilities—distinct competencies of the firm • Research segment size, growth potential and usage frequency • Assay the competitive environment • Find a niche you can scratch PPT 6-15

  16. Effective Positioning • Deliver on the brand promise • There is magic in consistency • Make the positioning different and simple for consumers to understand PPT 6-16

  17. Fundamental Positioning Themes • Benefit Positioning • User Positioning • Competitive Positioning PPT 6-17

  18. Ad in Context Example Do you think this ad for Ryka shoes is emphasizing benefit, user, or competitive positioning? PPT 6-18

  19. Repositioning • Used to revive an ailing brand or fix a lackluster new market entry • Advertising themes and positioning can be trendy and become outdated • The challenge: Changing perceptions of a brand forged over years of advertising. PPT 6-19

  20. V A L U E Relative Price Benefits Capturing the Value Proposition Functional Emotional Self-expressive PPT 6-20

  21. Check Your Understanding The owner of a cemetery buys up the land surrounding its existing site to handle what he believes will be a growing demand for cemetery plots as baby boomers age. This piece of information belongs in an ad plan under • situation analysis. • objectives. • strategy. • execution.

  22. Check Your Understanding A fast-food restaurant is trying to take the position of being the best choice when you're in a hurry because it tries to serve all customers within 60 seconds. Which of the following is not internally consistent with the company position? • Adding extra drive-up windows • Switching to the highest quality beef • Hiring more order-takers • Putting a big clock with a sweeping second hand behind the counter

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