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8/13/2019 Week 2 STP 2013 Final
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Lecture 212.00 Padarn
Segmentation,Targeting and
Positioning
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Describe the principles of market segmentation and thebenefits of the STP process.
Explain how market segmentation can be undertaken in
both consumer and business-to-business markets.
Describe different targeting strategies.
Explain the concept of positioning.
Illustrate how the use of perceptual maps can assist thepositioning process.
READING CHAPTER 6 BAINES
Learning Outcomes
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The biggest challenge for any marketer is tounderstand the customer.
Allows marketers to see similarities and differences
between groups of customers.
e.g. 2012 US Presidential Election Campaign.
100% awareness 48% each. 4% undecided.
Obama campaign focused on getting 18-24 to vote. 15% of electorate, 75% democrats.
3 3
STP Process- The Trinity of Marketing
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Direction and focus for marketing strategies:-
more targeted advertising.
better product development.
brand differentiation.
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Benefits of STP
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Identify growth opportunities
new customers
growth segments
product uses
Greater return on marketing investment.
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Benefits of STP
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Collect 460billion of taxes a year
Did not have a customer approach
Segmentation exercise to:-
Reduce Costs
Improve Customer Experience
Increase Yield
Initial segment was the whole tax paying population.9
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Outcome of exercise were 5 segments
Unaware
Willing but need help
Willing and able
Rule breakers
Potential rule breakers
Stakeholder engagement to embed internally.10
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Impact
internal: culturally, thinking about citizens ascustomers.
specifically targeted external communication.
big financial efficiencies: changed targets.
10
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Market segmentationis the division of a market into different
groups of customers with distinctly similar needs and
product/service requirements.
Market segmentation means dividing a market into distinct groups
of buyers with different needs, characteristics or behaviours, who
might require separate products or marketing mixes.
(Kotler et al, 4thed, p.391; 5thed p.410)
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Market Segmentation and Product Differentiation
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Segmenting a market involves 3 stages:
1. Selecting a segmentation basis:
The segmentation basis is the set of variables that are used toassign buyers to different groups.
(e.g. benefits-sought from a product: decay prevention, whitening,
taste from a toothpaste)
2. Grouping together buyers who are similar in terms of the base
variables. (e.g. a segment of people who all seek similar benefits
from a product: a decay-preventionsegment)
3. Profiling each segmentin terms of other (i.e. non-base) variables
(e.g. buyers user status, brand preferences, age, income,
media-usage, shopping preferences, etc.)
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Source: Integrated Marketing Communications in Advertising and Promotion (AISE, 7thedn. by Shimp(2007). Reprinted with permission of South-Western, a division of Thomson Learning
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Business to Business (B2B)market segmentation is the
identification of:
a group of present or potential customers with some common
characteristic which is relevant in explaining (and predicting) their
response to a suppliers marketing stimuli(Wind and Cardozo,
1974).
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Business to Business Segmentation
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Decision Making Unit
Policy factors
Purchasing strategies
Attitudes towards vendors and toward risk
Choice Criteria What specifications of product/service they choose
Purchase Situation
Structure of the purchasing procedures
Type of buying situation
Stage in the purchase decision process
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Evaluation of Market Segments - DAMP
Distinctis each segment clearly different from othersegments?
Accessiblecan buyers be reached through appropriatepromotional programmes and distribution channels?
Measurableis the segment easy to identify and measure?
Profitableis the segment sufficiently large to provide astream of constant future revenues and profits.
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Even if a segment has the right size and growth, the company
must consider its own objectives and resources. Some attractive
segments can be dismissed..The company should enter only
segments in which it can offer superior value and gain
advantages over competitors.(Kotler et al 5th ed, p.424)
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A$ap RockyAerosmithAlicia KeysBeyonce
Bullet for my Valentine
Britney SpearsCalvin Harris
etc
http://www.marketingweek.co.uk/the-uses-of-research-segmentation-sony-music/4001016.article8/13/2019 Week 2 STP 2013 Final
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Once target segment (s) are identified organisation must select itspreferred approach:-1. Undifferentiated: Mass market, one big segment.
2. Differentiated targeting approach: Marketing Strategy is developed foreach segment.
3.Concentrated marketing strategy: just a few market segments or limitedresources and go for the most profitable.
4. Customised targeting strategy.Different product for each customer. e.g.some B2B assembly lines.
Targeting
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Targeting
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Positioning is the means by which goods and services can bedifferentiated from one another and so give consumers a reason to
buy.
How a brand positions itself against another brand helps to clarifyin the customers mind how that brand is different and, critically,better than the competition.
Two fundamental elements:
Physical attributes - the functionality and capability that a brand
offers.
Communication - the way in which a brand is communicated and
how consumers perceive the brand relative to other competing
brands in the market place.
Positioning
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A visual representation of each market.
Used to determine how various brands are perceived according
to attributes valued by customers.
Closer products are clustered together, the greater thecompetition.
Further apart they are, the more opportunity there is for new
brands to enter.
e.g. UK Car Market
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Perceptual Maps to aid positioning
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The following four ways outline how to approach repositioning a product,
depending on the individual situation facing a brand. In some cases, a brandmight need to be adapted before re-launch.
1. Change the tangible attributes and then communicate the new proposition to the
same market.
2. Change the way a product is communicated to the original market e.g. engine
performance.
3. Change the target market and deliver the same product. e.g. S Class Endless
Winter.
4. Change both the product (attributes) and the target market. e.g. use Lincoln brand
Repositioning
e.g. Ford: Family car.
Female bias/low income.
Switch to male bias/middle to higher
income.
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Described the principles of market segmentation
and the STP process.
Explained the characteristics and differencesbetween market segmentation and productdifferentiation.
Explained how market segmentation can beundertaken in both consumer and business tobusiness markets.
Described different targeting strategies.
Explained the concept of positioning.
Summary