1. 6
Market Segmentation, Positioning, & the Value Proposition

2. Objectives Explain STP Process Segmentation Bases
Target Segment Criteria
Elements of Effective Positioning
Creating Brand Value/Equity

3. STP Marketing & the Evolution of Marketing Strategy
Target Market: A sub-group of a larger market chosen as the focal point for a marketing or advertising campaign.
Positioning: Designing & representing a brand in a way that is distinct in the consumer’s mind.
Positioning Strategy: Selecting key themes to communicate to a target market.
Marketing Strategy: Evolves as a result of 1-3

4. Beyond STP—Regular Assessment
Reassess segmentation strategy: A detailed examination of the current target segment to develop new & better ways of meeting its needs, or a need to change the target & reposition the brand to a new segment.
Pursue product differentiation strategy: Product differentiation is a firm’s effort to emphasize or even create differences in brands to distinguish them from competitors. Advertising plays a critical role as part of the product differentiation strategy because the consumer will have to be convinced that the difference is meaningful.

5. The STP Marketing Process (Segmenting, Targeting, Positioning)
Break the market into smaller, more homogenous segments
Specifically target discrete market segments
Position the brand to appeal to the targeted segments

6. Identifying Target Segments: Market Segmentation
Geography
Demographics
Psychographics
Lifestyles
Commitment Levels
Benefits
Usage Patterns

7. Segmenting by Usage & Commitment
Advertising & promotion targeted to:
Heavy users
Nonusers
Brand-loyal users
Switchers/Variety seekers
Emergent Consumers

8. Demographic Segmentation
Age
Gender
Race
Marital Status
Income
Education
Occupation

9. How would you describe the demographic segment targeted by this advertising campaign?

10. How about this ad? What is the target demographic for this ad campaign?

11. Geographic Segmentation

12. Psychographics & Lifestyle Segmentation
Activities
Lifestyle
Opinions
Lifestyle segmentation provides insight into consumer’s motivations
Interests

13. Passenger Safety vs speed?
Benefit Segmentation
Passenger Safety vs speed?
Prestige?
Fuel Economy?
Design?

14. Business to Business Markets
Markets segmented by:
Usage rates
Geographic location
SIC (Standard Industrial Classification) Code
Stage in the purchase process: first time vs. experienced buyers
Benefits desired

15. SIC Codes Standard Industrial Classification (SIC)= 2,3,4-digit SIC.
Enter a SIC CODE:Enter keyword(s):BEER
2082 Malt Beverages
2086 Bottled and Canned Soft Drinks and Carbonated Waters
3411 Metal Cans
3585 Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment
5149 Groceries and Related Products, Not Elsewhere Classified
5181 Beer and Ale
5813 Drinking Places (alcoholic Beverages)
5921 Liquor Stores
5963 Direct Selling Establishments

16. Prioritizing Target Segments
Examine your ability to deliver value to the segments & costs of new capabilities—distinct competencies of the firm
Research segment size, growth potential & usage frequency
Assay the competitive environment
Find a niche you can scratch

17. Effective Positioning….
…is based on substance of the brand’s values
…is consistent over time
…is both simple & distinctive

18. Fundamental Positioning Themes
Benefit Positioning
User Positioning
Competitive Positioning

19. Do you think this ad for Pepsi is emphasizing benefit, user or competitive positioning?

20. Repositioning
Used to revive an ailing brand or fix a lackluster new market entry
The challenge: Changing perceptions of a brand forged over years of advertising.

21. Capturing the Value Proposition
Benefits
Relative Price
Functional
Emotional
Self-expressive

22. Review/?s Explain STP Process Segmentation Bases
Target Segment Criteria
Elements of Effective Positioning
Creating Brand Value/Equity