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Market Segmentation, Positioning, and the Value Proposition

Chapter 6. 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.

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Market Segmentation, Positioning, and the Value Proposition

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  1. Chapter 6 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. • 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. Ch 6: Segmenting Markets 2

  3. The STP Marketing Process(Segmenting, Targeting, Positioning) • Break the market into smaller, more homogenous segments • Specifically target the discrete market segments • Position the product or service to appeal to the targeted segments Ch 6: Segmenting Markets 3

  4. How would you describe the demographic segment targeted by this advertising campaign?

  5. How about this ad? What is the target demographic for this ad campaign?

  6. Identifying Target Segments: Market Segmentation Demographics Geography Psychographics Lifestyles Commitment Levels Ch 6: Segmenting Markets 6 Benefits Usage Patterns

  7. Segmenting by Usage and Commitment • Advertising targeted to: • Heavy users • Nonusers • Brand-loyal users • Switchers/Variety seekers • Emergent Consumers Ch 6: Segmenting Markets 7

  8. Demographic Segmentation • Age • Gender • Race • Marital Status • Income • Education • Occupation Ch 6: Segmenting Markets 8

  9. Geographic Segmentation Ch 6: Segmenting Markets 9

  10. Activities Interests Psychographics and Lifestyle Segmentation Lifestyle Opinions Lifestyle segmentation provides insight into consumer’s motivations Ch 6: Segmenting Markets 10

  11. Benefit Segmentation Passenger Safety? Prestige? Ch 6: Segmenting Markets 11 Fuel Economy?

  12. 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 Ch 6: Segmenting Markets 12

  13. STP Marketing is used in the business-to-business market as well as the consumer market

  14. Prioritizing Target Segments Examine your ability to deliver value to the segments and costs of new capabilities Research segment size, growth potential and usage frequency Assay the competitive environment Find a niche you can scratch Ch 6: Segmenting Markets 14

  15. Effective Positioning • Is based on substance of the brand’s values • Reflects internal values and structure of the firm’s market orientation • Is consistent over time • Is both memorable AND distinctive Ch 6: Segmenting Markets 15

  16. Fundamental Positioning Themes • Benefit Positioning • User Positioning • Competitive Positioning Ch 6: Segmenting Markets 16

  17. Do you think this ad for Ryka shoes is emphasizing benefit, user or competitive positioning?

  18. Repositioning • Used to revive an ailing brand or fix a lackluster new market entry • The challenge: Changing perceptions of a brand forged over years of advertising. Ch 6: Segmenting Markets 18

  19. V A L U E Relative Price Benefits Capturing the Value Proposition Functional Emotional Self-expressive Ch 6: Segmenting Markets 19

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