1. Market Segmentation, Positioning, and the Value Proposition
Chapter 6
Market Segmentation, Positioning, and the Value Proposition
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2. STP Marketing and 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 and 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
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3. Beyond STP–Regular Assessment
Reassess segmentation strategy:
A detailed examination of the current target segment to develop new and better ways of meeting its needs, or a need to change the target and 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.
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4. 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
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5. Identifying Target Segments: Market Segmentation
Geography
Demographics
Psychographics
Lifestyles
Commitment Levels
Benefits
Usage Patterns
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6. Segmenting by Usage and Commitment
Advertising and promotion targeted to:
Heavy users
Nonusers
Brand-loyal users
Switchers/Variety seekers
Emergent Consumers
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7. Demographic Segmentation
Age
Gender
Race
Marital Status
Income
Education
Occupation
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8. Which demographic segment is targeted by this advertising campaign?
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9. What is the target demographic for this advertising campaign?
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10. Geographic Segmentation
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11. Psychographics and Lifestyle Segmentation
Activities
Lifestyle
Opinions
Interests
Lifestyle segmentation provides insight into consumers’ motivations
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12. Benefit Segmentation Passenger Safety? Prestige? Fuel Economy?
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13. 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
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14. Prioritizing Target Segments
Examine your ability to deliver value to the segments and costs of new capabilities—distinct competencies of the firm
Research segment size, growth potential and usage frequency
Assay the competitive environment
Find a niche you can scratch
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15. Effective Positioning….
…is based on the substance of the brand’s values.
…is consistent over time.
…is both simple AND distinctive.
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16. Fundamental Positioning Themes
Benefit Positioning
User Positioning
Competitive Positioning
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17. Do you think this ad for Panasonic is emphasizing benefit, user or competitive positioning?
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18. 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.
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19. Capturing the Value Proposition
Benefits
Relative Price
Functional
Emotional
Self-expressive
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