STP

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 Target Marketing

• Target marketing requires marketers to take

three major steps:
– Market segmentation: Identifying and profiling
distinct groups of buyers who differ in their
needs and preferences.
– Market targeting: Selecting one or more market
segments to enter.
– Market positioning: Establishing and
communicating the key distinctive benefit(s) of
the company’s market offering to each target.
–

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 Using Market Segmentation
• Mass marketing is losing popularity
• Micromarketing can be undertaken at four
levels:
– Segment marketing
– Niche marketing
– Local marketing
– Individual marketing

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 Segmenting Consumer
Markets
• Nation or country
Bases for • State or region
Segmentation • City or metro size


• Density
• Geographic
• Climate
• Demographic
• Psychographic
• Behavioral

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 Segmenting Consumer
Markets
• Age, race, gender
Bases for • Income, education
Segmentation • Family size

• Family life cycle
• Geographic • Occupation
• Demographic • Religion, nationality
• Psychographic • Generation
• Behavioral • Social class

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 Segmenting Consumer
Markets
Bases for • Lifestyle
Segmentation – Activities

– Interests
• Geographic – Opinions
• Demographic • Personality
• Psychographic • Core values
• Behavioral

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 Segmenting Consumer
Markets
Bases for • Occasions
Segmentation • Benefits
 • User status
• Geographic • Usage rate
• Demographic • Loyalty status
• Psychographic • Buyer-readiness
• Behavioral • Attitude

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 Using Market Segmentation
• Useful market segments share
certain characteristics:
– Measurable
– Substantial
– Accessible
– Differentiable
– Actionable

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 Segmenting Business
Markets
• Rackman and Vincentis proposed a
segmentation scheme that classifies
business buyers into three groups:
– Price-oriented customers: best served via
transactional selling
– Solution-oriented customers: best served by
means of consultative selling
– Strategic-value customers: best served by
means of enterprise selling

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 Market Targeting Strategies

• Evaluating and selecting market

segments requires assessing the
segment’s overall attractiveness in
light of company’s objectives and
resources.
• Five patterns of target market selection
can then be considered.

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 Market Targeting Strategies

Patterns of Target Market Selection

• Single-segment • Product
concentration specialization
• Selective • Market
specialization specialization

§Full market coverage

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 Market Targeting Strategies

• Targeting multiple segments may result

in cost economies
• Supersegment targeting may be
appropriate

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 PLC

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Sales & profits

Introduction Growth Maturity Decline

Time

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 Stages of the Product Life
Cycle
• Low sales
 PLC Stages • High costs per

customer
• Introduction • Negative profits
• Growth • Innovator
• Maturity customers
• Few competitors
• Decline
•

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 Stages of the Product Life
Cycle
• Rising sales
 PLC Stages • Average costs
• Rising profits


• Introduction • Early adopters

• Growth customers
• Maturity • Growing
competition
• Decline
•

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 Stages of the Product Life
Cycle
• Peak sales
 PLC Stages • Low costs
• High profits


• Introduction • Middle majority

• Growth customers
• Maturity • Stable/declining
competition
• Decline
•

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 Stages of the Product Life
Cycle
• Declining sales
 PLC Stages • Low costs
• Declining profits


• Introduction • Laggard customers

• Growth • Declining
• Maturity competition
• Decline
•

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 Objectives and Strategies for the
Product Life Cycle
• Objective: to create
awareness and trial
 PLC Stages • Offer a basic product

• Price at cost-plus
• Introduction • Selective distribution
• Awareness – dealers and
• Growth early adopters
• Maturity • Induce trial via heavy sales
promotion
• Decline
•

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 Objectives and Strategies for the
Product Life Cycle

• Objective: maximize
 PLC Stages market share
• Offer service, product


extensions, warranty
• Introduction
• Price to penetrate
• Growth • Intensive distribution
• Awareness and interest –
• Maturity mass market
• Decline • Reduce promotions due to
heavy demand
•

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 Objectives and Strategies for the
Product Life Cycle
• Objective: maximize profit
 PLC Stages while defending market

share
• Diversify brands/items
• Introduction • Price to match or beat
competition
• Growth • Intensive distribution
• Maturity • Stress brand differences and
benefits
• Decline • Increase promotions to
encourage switching
•

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 Objectives and Strategies for the
Product Life Cycle

• Objective: reduce costs and

 PLC Stages milk the brand
• Phase out weak models


• Introduction • Cut price

• Selective distribution
• Growth • Reduce advertising to levels
needed to retain hard-
• Maturity core loyalists
• Decline • Reduce promotions to
minimal levels
•

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