Study Guides (248,539)
Canada (121,616)
Marketing (517)
MKT 100 (260)

Module 5

7 Pages
Unlock Document

MKT 100
Paul Finlayson

Module 5: Segmentation, Targeting, and Positioning (STP) Section 1: Customer Focus and Positioning • Customer focus: How you focus your efforts to attract, serve, and retain customers, and which customers you focus these efforts • Targeting/ Product or Service Positioning: How you focus to serve customers • Focus on profitable customers, also analyze these customer’s needs • Changing customer preferences changes demand, which changes supply, which changes customer demand and preference • Simplifying thinking, make clusters, where consumer preference varies little, but between clusters, varies a lot • Best way to segment markets is using: o Sustainability (segment size) o Accessibility (segment can be reach efficiently) o Fit (with company capabilities) Segmentation Variables for Consumer Markets • Geographic o World region, climate, country, city, province • Demographic o Body type, weight, age, wealth, income, language, family size, education, nationality, ethnicity, occupation • Psychographic o Lifestyle, hobbies, interests, social class, values • Behavioral o Product consumption, channel loyalty, benefits sought, brand loyalty, early adaptor Focusing on Customer Profitability • Common conclusion: a small group of customers that want free benefits such as credit terms, and service and order small volumes or low margin products are unprofitable • ‘hidden loss’ customers subsidize ‘hidden profit’ customers • To find customer focus, identify direct determinants (drivers) o Customer purchases of high margin products and services o Quantity made by year o Low selling costs to customer, low delivery costs, low after sales service costs • Less direct way, but important driver is when the satisfied customers, refers others • Second step of positioning • Segmenting market and customers necessary to separate good customers from bad • Customer management metric, used to see how good the company manages their customers, 10 being the highest Section 2: Benefit-Feature Segmentation • Simple goal directed theory of consumer behavior, benefits from the features in a product or a service • Behavior is motivated by a desire (sometimes called a need or a want) to move from our current perceived situation to a new physical/ intellectual/emotional/spiritual state • Some motivation is conscious, some is not. • Product and service with their benefits help us move from a current state to a desired state • How we choose values, goals, priorities, instruments (products and services we use to achieve them) complicated • First, seek to have our survival needs met • Second, seek emotional and sexual goals (some put spiritual goals before all) • Others put the pursuit of learning and knowledge before their spiritual and emotional goals • Maslow: Priority of needs theory: o Physical needs o Love and affection o State of self-actualization • Must find what different customers want, and how to cater to those needs • Consumer preferences always changing Section 3: Positioning: Fitting Features to Benefits Desired • Buyers will choose a product based on quality when they perceive a product’s quality to be higher than a competitors quality in product benefits provided and on quality dimensions important to them • Customer focus means a product positioning and design focus on product quality/benefits desired by the target segment • Juran’s Quality Planning Road Map, identify customer needs, what qualities the product or service must have to meet and exceed customer needs, then deliver such quality • Quality Function Deployment(QFD): deployment of quality, technology, and the resources of the firm to ensure a product or service is competitively positioned to target and deliver the desired customer function, benefits and satisfaction Section 4: Channel/ Contact Segmentation • Customer focus and segmentation around the customer’s distribution/communication channel usage is very common • Segments are almost always further sub segmented into different product benefit/feature usage segments to which various products or models in the product line are targeted • Sub-segments tracked for profitability • Channel segmentation very important today because a lot of innovation in communication and distribution to customers is occurring around the global marketplace • Internet offers consumers channel access to a vast selection of supply that a single brick and mortar channel could never stock or offer • New global supply chains that deliver niche products to every corner of the world • Modern channel management: catering to a much greater range of customer preferences and demand • Search engine example of creative destruction Section 5: 3D Customer Focus • Makes common sense to design products and services that fit their features and price to the usage situation • Achieved by designing and ever updating a product line of models or brands whose features are matched with the benefits sought in different usage situations by different users and the major drivers of consumer choice • Second common sense goal of customer segmentation should be to identify how the customer prefers to interact with the company (eg via Internet or telephone etc) • Cont
More Less

Related notes for MKT 100

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.