STPD

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[MARKETING STRATEGY] 1

STPD- (Segmentation, Targeting, Positioning, Differentiation)

Segmentation Where to compete Divide market into distinct groups with distinct needs, characteristics, or

behaviors Basis- competence, resources, potential (Features, service, convenience,

quality)

Evaluate segment attractiveness Segment size and growth, own objectives and resources Structural Attractiveness- Level of competition, substitutes, buyers/

supplier power

Requirements for effective segmentation Measurable- Size, purchasing power, and profile of segment Accessible- Can be reached and served Substantial- Large and profitable enough to serve Differentiable- Respond differently Actionable- Effective programs can be developed

Principles of market segmentation (Palmer & Miller 2004, Industrial Mktg Mgt, 33(8), pp 779-85)

Concept Short definition

Example Moov

Segmentation

Identify different needs & groups in the market

Where to compete

Pain segment

Targeting Target markets it can satisfy in a superior way

Which product for which market

Back pain segment within the pain segment

Positioning Occupy distinct place in customers mind

Locating brand in customers mind

Relief from back aches Aah se aha tak

Differentiation

Communicate valuable & meaningful differences

How to compete

Lamitube, non staining, effective in back pain

Market segments (Size, access, differentiated)

Who buys- Customer characteristics

What is bought, why- Customer behaviour

Hard Soft Objective Subjective

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[SEGMENTATION, TARGETING, POSITIONING, DIFFERENTIATION)

Segmentation matrix- Taj Hotels

Types of segmentation 4 types- geographic, demographic, psychographic, behavioural- ideal is to integrate, mix

Demo/geographic

Psychographic

Behavioural

AEGIS VALS Usage Benefits

Price sensitivity, promo response, loyalty, repeats

Perceptions, preference trade-offs

Segments Features

Full service Hotels

Palaces

Spas

Resorts

Wildlife lodges

Self service

Luxury Premium

Taj Hotels & Palaces

Taj Exotica

Luxury Vivanta by Taj Taj Safaris

Premium Gateway

Mid-market

Budget Ginger


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Factors (examples) Example

Geographic

Country, area, region, climate Coke-Chota-Rural, Bada Urban Sweaters in HP, Kashmir McDonalds menu adaptation in

India Honda City- different models

globally ITC Ashirwad atta diferrent

blends NEWS India food habits- North wheat,

South rice

Demographic

Age (Hospitals, cycles, , toys)

Education Income (Garments, car,

soaps) Sex (Perfumes, hospital) Religion, nationality Marital status, family size,

family life cycle, generation, ocupation

Social class- middle/lower/ upper

LIC, Hinduja hospital Schools Toyota- Lexus, Camry, Corolla Gillette Beef/Pork, Halal, Kosher foods Mature 1945+, Baby boomers

1965+, Generation X 1976+, Generation Y 1994+

DINK, ORCHID, YUP, WHOP

Psychographic

Benefits sought (costs, service, quality)

Lifestyle, VALS (Values, attitudes, lifestyle)

Personality, culture, social, religion

AIO- what interests them, view

Activities- Work, Hobby, Shopping

Interests- Family, fashion, food

Opinions- Self, PEST

Nano, Taj, Titan, Nokia

Clubs, Art, Wine Harley Davidson owners

Woodlands-rugged/extrovert Niche magazines - food, fashion,

car, electronics, CRM

Behavioural

Occasions Personality based Benefit segmentation Attitude (+ve/-ve, hostile) Convenience (EMI, Home

Delivery) Readiness (Informed,

interested, aware)

Greeting cards, tour operators, weddings

Blackberry addicts Maggi convenience, Maruti

service, value User (1st time, regular) Usage (light, heavy consumption) Loyalty (HML, switchers) Titan-

edge for formal, fastrack for casual, Raga for ethnic; Bisleri pack sizes

By occasions, product usage, benefits sought, brand loyalty

Occasions- www.dramitrangnekar.com

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Exercise 1. Outline a segmentation matrix for mobiles (users v features)

2. Sports Shoes Market (Exercise) Which segments should Nike, Adidas & Reebok target

Targeting Which product for which market

Measure segment attractiveness, select target segments

Set of buyers sharing common needs or characteristics that a company decides to serve

Targeting factors- resources, competence, degree of product variability, PLC stage, competitors strategies

Targeting choices (Derek F Abell, 1980)

Targeting strategy

Strategy What it means

Example Illustration

Mass marketing

Target marketing mix towards the entire market, not specific to any segment

Amul Butter, Parle G, Coke


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Positioning Locate brand in the customers mind Design firms offering & image to occupy distinct place in target

customers mind Represent a distinctive big idea in the mind of the target market

Positioning strategies

Differentiated marketing (segmented)

Target different marketing mixes towards different segments

UB group whisky, Cadbury chocolates, HUL

Market concentration

Concentrating mix on any one segment of the market

Ferrari- luxury sports cars, Nirma economy detergents, Big Bazaar

Niche Marketing

Target small market segment with specific, specialized marketing mix

Travel agents focused only on Shirdi, HP, Nepal Sports shops, Florists

Positioning types Positioning anomalies

Attribute-Longevity-Since 1904

Benefit- Sea view, service, speed

Use-ICICI- Fast A/c opening

User-Louis Philipe-Upper crust

Category- Big small car-Indica

Quality-Benz-Future of the automobile

Under-Fridge-PUF Over- Casio start @ Rs 500, perceived

expensive earlier Confused- Top Ramen

Noodles-Smooth Doubtful- Tall promises-Teak

plantations, Ponzi schemes Value-Budget Hotels, Maruti

Single Camry-Touch Perfection


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Perceptual mapping Brands 'mapped' together on 'positioning map', compared across

parameters Identify weak/strong/absent competitive positions Price v range for Mumbai super stores, distinguish by competitive

offerings Gaps regarded as opportunities for positioning/repositioning/launch

Exercise: Walmarts India entry strategy based on above perceptual map

Crafting the brand positioning Positioning requires determining a competitive frame of reference, which defines associations that consumers use to evaluate directly/ broadly competing brands, as under:

Double Tavera-Comfortable family car

Triple Liquidity, safety, returns-MFs

Multiple- same product to various segments with intact central positioning

A chocolate-based health drink- Central positioning- nutrition, Active people- Energy, Elderly- Dietary supplement, Pregnant ladies- essential supplement, Kids- Growth & nutrition, Executives- revitalize

Frame of reference What it means Example iPad


Range

Price

Low

High

High Low

ShoppersStopLifeStyleRunwalCrossroad

Globus

Giants

Akbarallys

ApnaBazar

BigBazaar

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Identify target market

Which brand for which market Enthusiasts, innovators

Understand consumer behavior

Considerations in choosing brands- attitudes, preferences

Price insensitive, must-have, advocacy,

Nature of competition

Intensity, dominance, PLC, differentiation

CE/ technology firms

Points-of-parity (POP)

Associations consumers view essential to be credible, common category traits, conditions necessary but not sufficient for brand choice

Midway Laptop/mobile, touch screen, phone, net, 1GB ram, handy

Points-of-difference (POD)

Associations, attributes, benefits consumers associate, positively evaluate & believe they cannot find to the same extent with others

Apple, apps, design, gaming

Position The position to be located in the customers mind

Resolutionary

Test the position on customers for RUB or 2D test

Relevant- customers want high resolution Unique- no one else is claiming it Believable- Apple had delivered in the past OR Desirable- customers want high resolution Deliverable- Apple has credibility

iPad positioning should include POD+ RTB


32GB SafariDesignFace TimeApple

5MP CamApps

Weight iOS HD VideoGaming iPod

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Exercise- POPs & PODs for Apple i-Phone 4s Exercise- How Should Maruti position itself with respect to the Tata Nano?

Positions that firms have successfully claimed in India

HUL- Axe and Rexona, (both HUL), operate in the same segment- deos. Rexona targets working population, positioned against body odour, Axe targets youth, positioned on seduction. Both contain a similar formula, target the same segment, but use completely different communication strategies, do not cannibalise.

P&G Positioning: distinct positions, even in same segments (Aaker & Joakimsthaler)

Differentiation

Beauty Lux Range C r o m a , Titan

Reach I T C , H U L , GSK

Premium

Bose, Benz Youth Pepsi, Nike Kids McDonalds

Thanda Coke Fever Crocin Economy

Big Bazaar

Generic C a d b u r y /Xerox

Innovation Apple, Intel Value M a r u t i , Flipkart

Delivery

Dabbawallas Macho Enfield Tourism Goa, Kerala,

Service Maruti Performance

N o k i a , Titan

Search Google

F a s t food

V a d a P a v , Udipi

Salesmen EurekaForbes

Headache

S a r i d o n /Anacin

Brand Segment Position

Head & Shoulders Shampoos Anti-Dandruff

Pert Plus Shampoos Conditioner + shampoo

Pantene Shampoos Healthy + shiny hair

Ariel Detergent High Tech Detergent

Tide Detergent Tough cleaning

Cheer Detergent All-temperature cleaning

Bold Detergent Fabric softener


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How to compete (STP undertaken to help differentiate)

Add meaningful & valuable differences to distinguish offering from competitors

Differentiation Criteria- important, distinct, superior, preemptive, affordable

By form / features- Coke bottle shape, Heinz thick ketchup, iPhone 4s- Siri

Differentiated on why customers buy- perception of PQRSTUV, usage and experience

Brands differentiate on irrelevant features/benefits- many mobile phones features hardly used, newer management book editions- bigger & costlier, not always better

Identify tangible differences -conscious, rational benefits like PQRSTUV-, Performance (Titan), Quality (Apple), Rate (Big Bazaar), Range (Cadbury), Service (Maruti), Technology (Intel), Utility (Swiss knife), Value (Titan), Convenience (Maggi)

Intangible Benefits - emotional, sub-conscious benefits a brand owns- Status (Benz, BMW), Prestige (Mont Blanc, Rolex)- most important leverage for brand dominance, unique (Sony, Apple), sustainable benefits (Amul, Toyota low cost)

Differential variables

Exercise- i-phone 4s Key success factor? STPD? Where is iphone vulnerable? Economical competitors, imitators,

technology What should it watch out for? Changing preferences, value, new trends Key improvement areas? Price, promotion, features, customer service

Brand Performance, features, form, conformance, reliability, style, design, quality

Service Delivery, ease of ordering & installation, customer training

People Competence, credibility, reliability, responsiveness, communication

Channel Coverage, expertise, cost effectiveness, performance

Image Symbol, colour, slogan, ambience, atmosphere


Documents

STPD