Session 2 STP

7/27/2019 Session 2 STP

1/52

A key marketing strategy decision making : How to

divide up markets into meaningful customer

groups (Market Segmentation), choose which

customer groups to serve (Target Marketing), andcreate marketing offers that best serve targeted

customers (Positioning)


2/52

Segmentation

Identifyingmeaningfullydifferent groups of

customers

Targeting

Selecting whichsegment(s) to serve

Positioning

Implementing

chosen imageand appeal to

the chosensegment


3/52

Dividing a Market into distinct groups ofbuyers, according to similar needs,characteristics or behaviors, who mightrequire separate products or marketing

mixes. The objective of Market Segmentation is to

determine the differences between buyersor buyer groups.

A heterogeneous Market may be sub-divided into a number of more or lesshomogeneous Market segments.


4/52

Not all buyers are alikethe days of

one size fits all are over !

Sub-groups are smaller and more

homogeneous in natureIt is easier to

satisfy the needs and demands of smaller

groups


5/52

1. Undifferentiated or Mass Marketing -> One

Product , One Marketing Mix


6/52

2. Differentiated (Segment) Marketing ->

Different segments, Different Marketing Mixes


7/52

3. Niche or Concentrated Marketing

A niche is a subset of the Market Segment on which aspecific product is focusing. The marketers focus is on one

segment, although the product could appeal to others aswell.

In an attractive niche, the customers have a distinct set ofneeds; they will pay a premium to the firm that best satisfies

them. The niche is fairly small, but has size, profit and growthpotential and is unlikely to attract many other competitors inthe short run.


8/52

3. Niche or Concentrated Marketing


9/52

4. Micro Marketing -> Newest, narrowest

approach of segmentation

Local Marketing


10/52

4. Micro Marketing -> Newest, narrowest approach of segmentation

Individual Marketing


11/52

1. Geographic Segmentation : Region-wise


12/52

1. Geographic Segmentation : City-wise

Class I Population: 1,00,000 and above

Class II Population : 50,000 to 99,999Class III Population : 20,000 to 49,999

Class IV Population : 10,000 to 19,999

Class V Population : 5,000 to 9,999

Class VI Population : Less than 5,000

50,00,000 : Megacity 6 Cities classified as X

10.00,000 to 4,999,999 : Metropolis 53 cities classified as Y

5,00,000 to 9,99,999 : Sub-Metropolis Other cities classified as Z

53 urban agglomerations in India with population of 1 million or more

Source:

Census Data 2011

City Classification

as recommended by

Sixth Central Pay

Commission in 2008

(X, Y and Z)


13/52

1. Geographic Segmentation : Rural, Urban and Semi-urban


14/52

2. Demographic Segmentation :

Family Size

Age

GenderOccupation

Income

Education

Generation


15/52

3. Psychographic Segmentation : SEC Classification

Occupation Education

Illiterate School upto 4

years or

Literate but no

formal

schooling

School

(5-9

years)

HSC/SSC Some

college, but

not graduate

Graduate

or Post-

Graduate

(Gen)

Graduate or

Post-

Graduate

(Prof)

Unskilled

Workers

E2 E2 E1 D D D D

Skilled Workers E2 E1 D C C B2 B2

Petty Traders E2 D D C C B2 B2

Shop Owners D D C B2 B1 A2 A2

Businessmen/

Industrialist

No. of

Employees

None

1-9

10 plus

D C B2 B1 A2 A2 A1

C B2 B2 B1 A2 A1 A1

B1 B1 A2 A2 A1 A1 A1


16/52

3. Psychographic Segmentation : SEC Classification (Contd)

Occupation Education

Illiterate School upto 4

years or

Literate but no

formalschooling

School

(5-9

years)

HSC/SSC Some

college, but

not graduate

Graduate

or Post-

Graduate

(Gen)

Graduate or

Post-

Graduate

(Prof)

Self-employed

Professionals

D D D B2 B1 A2 A1

Clerical/Sales

men

D D D C B2 B1 B1

Supervisorylevel

D D C C B2 B1 A2

Officers/Execut

ives (Junior)

C C C B2 B1 A2 A2

Officers/Execut

ives (Senior)

B1 B1 B1 B1 A2 A1 A1


17/52

3. Psychographic Segmentation : SEC Classification (Contd.)

Education Type of House

Pucca Semi-

pucca

Kuccha

Illiterate R4A R4A R4B

Below SSC R3A R3B R4A

SSC/HSC R2 R3A R3B

Some College Education, Not

Graduate

R1 R2 R3B

Graduate/Post-graduate (General) R1 R2 R3A

Graduate/Post-graduate

(Professional)

R1 R2 R3A


18/52

3. Psychographic Segmentation : SEC Classification (Contd.)

Urban % of

Households

A1 1%

A2 1.8%

B1 2.5%

B2 2.4%

C 6.1%

D 6.6%

E1 3%

E2 5%

Rural % of

Households

R1 2.6%R2 1.8%

R3 26.7%

R4 34.%

Urban : 28.4 %

Rural : 71.6%

Source : Marketing Whitebook,

2005, based on IRS 2003-2004


19/52

3. Psychographic Segmentation : VALS Framework


20/52

3. Psychographic Segmentation : VALS Framework

Value and Lifestyle Survey (VALS) is one of the most popularly

used systems for psychographic measurements.

Adults are classified into different groups based on theirresponses to a questionnaire containing questions based on

demographics and attitude.

In the USA, adults are classified into eight primary groups and the

main dimensions of the segmentation framework are consumermotivation (X-axis) and consumer resources (Y-axis).

Similarly, in Japan, society is divided into 10 consumer segments

based on two key concepts : life orientation and attitudes to social

change.


21/52

3. Psychographic Segmentation : VALS Framework (USA)

The four groups with higher resources:

Innovators AchieversThinkers Experiencers

Successful,

sophisticated,

active, people

with high self-esteem -> Buy

upscale, niche-

oriented

products and

services

Mature, satisfied,

motivated by

ideals, value

knowledge andresponsibility ->

Look for durability,

functionality and

value in their

products

Successful, Goal-

oriented people

who focus on

careers and family-> Buy premium

products that

demonstrate

success to their

peers

Young,

enthusiastic,

impulsive people

who seek varietyand excitement -

> Spend on

fashion,

entertainment

and socializing


22/52

3. Psychographic Segmentation : VALS Framework (USA)

The four groups with lower resources:

Believers MakersStrivers Survivors

Conservative,

conventional and

traditional

people -> Preferfamiliar products

and are loyal to

established

brands

Trendy, fun-loving

people who are

resource

constrained -> Buystylish products

and try to emulate

the purchases

made by people

with greater wealth

Practical, down-to-

earth, self-

sufficient people ->

Seek products witha practical or

functional purpose

Elderly, passive

people who are

concerned about

change ->Extremely loyal

to their favourite

brands !


23/52

3. Psychographic Segmentation : Gert HoffstedesCultural Model

Individualism Vs. Collectivism : The relationship between

the individual and the group in society

Power Distance: Expectations regarding equality amongpeople

Masculinity: Gender Roles

Uncertainty Avoidance : Expectation and reaction to whatis different and dangerous

Long- term orientation : Viewing of time


24/52

4. Behavioral Segmentation : Occasions


25/52

4. Behavioral Segmentation : Benefits


26/52

4. Behavioral Segmentation : User status

Ex-users

Non-usersRegular Users

Potential Users First-time Users


27/52

4. Behavioral Segmentation : Usage Rate

Light

Medium

Heavy


28/52

4. Behavioral Segmentation : Loyalty Status

Hard-core loyals

Shifting loyals

Split loyals

Switchers


29/52

4. Behavioral Segmentation : Attitude towards product

Enthusiastic

HostileNegative

Indifferent

Positive


30/52

4. Behavioral Segmentation :Buyer Readiness

Aware

ActionDesire

Interest


31/52

Step 1: Needs-based Segmentation -> Group

customers into segments based on similar needs and

benefits for solving a particular customer problem.

Step 2: Segment Identification -> For each needs-

based segment, determine what makes the segment

distinct and identifiable.

Step 3: Segment Attractiveness-> Determine the

overall attractiveness of the segment.

Step 4 : Segment Profitability


32/52

Step 5 : Segment Positioning -> Create a value

proposition for each segment and product-price

positioning strategy based on the segment.

Step 6: Segment Acid test-> Create a storyboard

to test the segmentation positioning strategy.

Step 7: Marketing- Mix Strategy: The 4 Ps !!!!


33/52

SegmentAttractiveness

Identifiable

Reachable

ResponsiveProfitable

Substantial


34/52

M1 M2 M3

P1

P2

P3

Single-segment Concentration


35/52

M1 M2 M3

P1

P2

P3

Selective Specialization


36/52

M1 M2 M3

P1

P2

P3

Product Specialization


37/52

M1 M2 M3

P1

P2

P3

Market Specialization


38/52

M1 M2 M3

P1

P2

P3

Full Market Coverage


39/52

Positioning is the act of designing the

companys offering and image to occupy adistinctive place in the mind of the targetmarket.

Key terms : Target Customers,

Benefits, Value Proposition and

the law of the Word !


40/52

Attribute Positioning -> Specific

Product feature


41/52

Benefit Positioning :


42/52

Use/Application Positioning :


43/52

User Positioning :


44/52

Competitor Positioning :


45/52

Product Category Positioning :


46/52

Quality/Price Positioning :


47/52

Most People think I must drink at least 10 cups ofcoffee to be so perky in the morning. But the truthis, I like skim milk first thing. It has all the samenutrients as whole milk without all the fat. Andbesides, my husband got the coffee maker.

MILK: What a Surprise


48/52

Most People think I must drink at least 10 cups ofcoffee Competitor Positioningto be so perky Benefit Positioninginthe morning. But the truth is, I drink Use/applicationsPositioningskim milk first thing. It has all the samenutrientsAttribute Positioning of whole milk without all thefat Product category Positioning. And besides, my husband gotthe coffee maker.

MILK: What a Surprise

User Positioning


49/52

Points-of-Difference -> Attributes/Benefits associated with a brand

which is unique to it, not found in the competitors (Recall the examples of

Dominos, Apple and BMW)

Points-of-Parity-> Attributes that are not necessarily unique to the

brand, may be shared by others

(i) Category POP : Necessary, but not sufficient condition for brand choice

(ii) Competitive POP : Designed to negate the competitors POD


50/52

Sometimes, it is important to inform the customer

about the brands category membership. This

becomes important, especially in case of new

product launches.

Sometimes, it becomes important because the brand

image is too strongly associated with a particular

category ! Example :


51/52

Brand Values

Brand Benefits

BrandAttributes

More

Attractive

Softer Skin

One Quarter

cleansing

milk


52/52

Remember : A positioning statement is nota tagline !!!

The tagline is a "translation" of the position statement into words that

will have maximum effect on the customer.

Structure : To (target group and need), our (brand) is (the concept/category

membership) that (what the point-of-difference is or does) because (reason).

Example :

To 16-25 year old males, who embrace excitement,adventure and fun, Mountain Dew is the great tasting

carbonated soft drink that exhilarates like no other

because it is energizing, thirst quenching, and has a one of

a kind citrus flavor.

Documents

Session 2 STP