Professional Documents
Culture Documents
STP process
Identifying those particular groups of customers,
which your product/service is capable of meeting
their requirements (needs) most.
Each of these groups constitute a market segment
Selecting one or more segments to enter
Establishing and communicating the products
key distinctive benefits in that market
Issues
What are the different levels of market
segmentation?
How can the company divide a market into
segments?
How can a company choose a most
attractive segment?
What are the requirements for effective
segmentation?
Market Segment
A large identifiable group within a
market with similar wants, purchasing
power, geographical locations, buying
attitudes
Levels of segments:
Mass marketing
Micromarketing; segments, niches, local
areas, and individuals
Niche Marketing
Local Marketing
When the marketing mix is altered to suit
the local conditions
e.g.. Giving a higher/ lower discount than
whats prevailing in the rest of the markets
or implementing a different promotion
scheme
Individualized Marketing
When the firm deals with each customer
on a one to one basis
Customerization- When products are
customized for the customer
Psychographic Segmentation
Divides a population into groups that have
similar psychological characteristics,
values, and lifestyles
Lifestyle: peoples decisions about how to
live their daily lives, including family, job,
social, and consumer activities
The most common method for developing
psychographic profiles of a population is to
conduct a large-scale survey
AIO statements
VALS and VALS 2
Values and Lifestyles
Using Psychographic
Segmentation
Psychographic profiles
produce rich descriptions
of potential target markets
Greater detail aids in
matching a companys
image and its offerings
with the types of
consumers who are likely
purchasers.
Behavioral variables
Occasions birthdays, lunchtime, vacations
Benefits eg. travel business, vacation,
educational
User status non users, ex users, first time
users, regular users, potential users
Usage rate light, medium, heavy
Brand Loyalty
Segmenting consumers grouped according to the
strength of brand loyalty felt toward a product
Frequent flyer programs of airlines and many hotels
Measurable
Substantial
Accessible
Differentiable
Actionable
Undifferentiated Marketing
Single product addressing all segments
with a single marketing program.
Mass production is possible giving
scale economies
Pushes price downwards enabling to
attract price sensitive segments
Differentiated Marketing
A separate market offering for every
segment
Marketing programs for every segment
could be different
Pushes up costs at various levels,
necessitating sufficient volumes for
viability
Generates inter-segment rivalry
Attributes
Price/quality
Competitors
Application
Product user
Product class
Positioning map
Graphic illustration that shows differences
in consumers perceptions of competing
products
Reposition
Marketing strategy to change the position
of its product in consumers minds relative
to the positions of competing products
Hypothetical
Competitive
Positioning
Map for
Selected
Retailers