The STP Marketing Model: Segmentation, Targeting, and Positioning

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Chapter 6: Market Segmentation, Targeting, and Positioning
1/ What is segmentation, targeting, and positioning?
Market segmentation involves dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes
Market targeting consists of evaluating each market segment’s attractiveness and selecting one or more segments to enter
Positioning consists of arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
2/ What are the steps in the target marketing process? (Order important – segmentation, 
targeting, positioning)
Target marketing: identifying market segments (segmentation), selecting one or more of them (Targeting), and developing product and marketing programs tailored to each (positioning)
3/ What are variables that can be used to segment a market? * Geographic, demographic, psychographic, and behavioral variables are used in segmentation * There is no single way to segment a market

* Often best to combine more than one variable in order to identify smaller, better-defined target groups * Geographic segmentation calls for dividing the market into different geographical units, such as nations, regions, states, counties, cities, or even neighborhoods. Many companies today are localizing their products, advertising, promoting, sales efforts to fit the needs of individual regions, cities and neighborhood. * Demographic segmentation divides the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation. * Demographic factors are the most popular based for segmenting customer groups. One reason is that consumer needs, wants and usage rates oftern vary closely with demographic. Another is that demographic variables are easier to measure than most other types of variables * Age and life-cycle segmentation: offering different products or using different marketing approaches for different age and life cycle groups * Gender segmentation has long been used in clothing, cosmetics, toiletries, and magazines. * Income segmentation: the marketers of products and services such as automobiles, clothing cosmetics, and financial services, travel. Many companies target affluent consumers with luxury goods and convenience service. Other use high-touch marketing programs to court the well to do * Psychographic segmentation divides buyers into different segments based on social class, lifestyle, or personality characteristics. Marketers often segment their markets by consumer lifestyle and based their marketing strategies on lifestyle appeals. * Behavioral segmentation divides buyers into segments based on their knowledge, attitudes, uses, or responses to a product. Many marketers belive that behavior variable are the best starting point * Occasions segmentation: dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item. (ex: mother’s day, father’s day) * Benefit segmentation: dividing the market into segments according to the different benefits that consumers seek from the product. It requires finding the major benefits people loof for in a product class, the kinds of people who loof for each benefit and the major brands that deliver each benefit. * User status:

* Usage rate
* Loyalty status
* Requirements for effective
* Measurable: the size, purchasing power, and profiles of the segments can be measured * Accessible: can be effectively reached and served
* Substantial
* Differentiable
* Actionable

4/ How can market segments be...
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