MARK1012 Chapter Notes - Chapter 6: Swot Analysis, Marketing Mix, Fixed Cost
CHAPTER 6 Segmenting, Targeting, Positioning
Saturday, 20 May 2017
21:29
1. STP process:
Strategy or objectives--> segmentation methods --> evaluate segment's attractiveness -->
select target market --> identify and develop positioning strategy
Although the model implies that the process is linearly aligned, the actual implement doesn't
have to necessarily be so. For instance, a firm can start with objectives, but as it gathers more
info, it could modify it
2. Step 1: establish overall strategy or objectives
In this step a firm articulate the vision of the marketing strategy clearly. The segmentation
strategy must be consistent with and derived from the firm's mission and objectives, as well as
its current situation and SWOT.
3. Step 2: segmentation methods
To use a particular method or combination of methods to segment the market. This step also
develops description of different segments, which helps firms to better understand the
customer profile in each segment. With this info, they distinguish customer similarities within
a segment and dissimilarities across segments. Marketers use geographic, psychographic,
benefits and behavioral segmentation method.
A. Geographic segmentation: organizes customers into groups on the basis of where they live (by
country, region, states cities, suburbs, post codes). It is useful for companies whose products
satisfy needs by regions.
B. Demographic segmentation: groups customers according to their objectives characteristics
such as age, income, gender, education. A firm may want to keep in mind that stereotypes in
demographics may not be useful to define the target segments for companies because the
credit culture has allowed consumers who earn less to afford more resulting in less disposable
income and their behavior unpredictable.
C. Psychographic segmentation: segmentation that delves into how consumers actually describe
themselves. Determining psychographics involves knowing and understanding three
components:
• Self-values: goals for life. From a marketing point of view, self-values help determine the
benefits that the target market may be looking for from a product or a service
• Self-concept: the image that people ideally have for themselves. Marketers often use self-
concept through communications that show their products being used by groups of laughing
people who are having a good time.
• Lifestyle: people's lifestyle preferences and choices affect the segmentation, targeting and
positioning strategies of any business in those sectors
The most common used tool to support psychographic segmentation efforts is Value and
Lifestyle Survey (VALS). According to VALS, consumers can be classified into 8 segments.
Firms are finding that psychographic segmentation are often more useful for predicting
consumer behavior than are demographics, though it is more expensive as a mean of
identifying potential customers.
D. Benefit segmentation: groups customers on the basis of the benefits that they derive from the
goods or services. Dividing the market into segments whose needs and wants are best satisfied
with the product benefits can be a very powerful tool.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Strategy or objectives--> segmentation methods --> evaluate segment"s attractiveness --> select target market --> identify and develop positioning strategy. Although the model implies that the process is linearly aligned, the actual implement doesn"t have to necessarily be so. For instance, a firm can start with objectives, but as it gathers more info, it could modify it: step 1: establish overall strategy or objectives. In this step a firm articulate the vision of the marketing strategy clearly. The segmentation strategy must be consistent with and derived from the firm"s mission and objectives, as well as its current situation and swot: step 2: segmentation methods. To use a particular method or combination of methods to segment the market. This step also develops description of different segments, which helps firms to better understand the customer profile in each segment. With this info, they distinguish customer similarities within a segment and dissimilarities across segments.
