MARKETING MANAGEMENT

WELCOME
TO
THE CLASS
OF
SEGMENTATION,TARGETING AND POSITIONING
BY
DARA RAJENDRABABU
 TOPICS TO DISCUSS

MEANING
AND ESSENTAIL
SEGMENTATIO TARGETING
DEFINATION N BASIS STRATEGIES
ELEMENTS OF
POSITINING
OF
STP
LEARNING• OUTCOMES
Understanding about STP Model

• Studying and Understanding the

Segmentation basis Targeting
Strategies.

• Understanding the Positioning Tools

and Essential Elements of positioning
 WHAT IS STP MODEL
STP marketing stands for segmentation, targeting, and positioning.
It is a three-step process that allows for the development of a
specific and actionable marketing strategy.
The main principle behind the process is to segment your audience,
target each segmented group according to their preferences and
habits, and make positioning adjustments in your branding and
marketing strategies to accommodate their needs and expectations.
 STP
STP marketing is one of the most popular strategic
marketing modules used by businesses today, and for
good reason.
The STP model is an excellent embodiment of the
gradual change in focus from a product-centric approach
to a customer-centric approach, which enables
companies to better understand who they are trying to
reach and how to position themselves for success.
 MARKET SEGMENTATION
According to Philip Kotler: Market Segmentation is the sub-
dividing of customers into homogenous sub-set of customers where
any sub-set may conceivably selected as market target to be reached
with distinct Marketing Mix.
Market Segmentation is dividing the market into distinct group of
buyers with different needs, characteristics, behaviours who might
require separate product or marketing mix.
 LEVELS OF SEGMENTATION
There are four levels of market segmentation:
1. Mass Marketing: Same Products to all Consumers (No
segmentation)
2. Segment Marketing: Different Products to one or more
Segments(Some Segmentation)
3. Niche Marketing: Different products to Sub-groups with in
segmentation( More Segmentation)
4. Micro Marketing: Products to Suit the tastes of individuals or
locations (Complete Segmentation)
Mass Marketing (same product to all consumers) in mass marketing
we assume that target market is made of similar kind of consumers and
we use the same product, promotion, and distribution to all consumers.
e.g. coca cola at a time. Mass production, distribution in the bulk-and
global advertisement are the advantage of mass marketing.
Segment Marketing (different products to one & more segments) in
segment marketing we make an offering so they more closely match the
needs of one or more segments. We also refer it to selective marketing or
differentiated marketing, Executive class and economy class of ticketing
in the airlines’ industry, Room segmentation in hotel business are the
example of segment marketing. These products are carefully designed to
meet the needs of each segment served.
Niche Marketing (different products to subgroups within segments) in
Niche marketing a company makes its offering to match the needs of one
or more micro-segments more closely where there is no, or petition or
little competition. We can name it as concentrated marketing, firms
concentrate their selling to a small market segment or niche. Fortuner
SUV is a classic example of niche marketing.
 Micro Marketing (products to suit the tastes of individuals or
locations) is marketing programs tailored to narrowly defined geographic,
demographics psychographics behavioural segments. Micro Marketing is
further classified into THREE categories
1. Local Marketing
2. Individual Marketing
3. Mass Customization
Local Marketing: Products and promotions to meet the needs and wants of
the local customer group.
Individual Marketing: Products and marketing programs to meet the needs
of the individual customer.
Mass Customization: Preparing individually designed product and
communication on large scale.
 CHARACTERISTICS
For a segment to be viable, it must have the following characteristics:
1. Identifiable : You should be able to identify customers in each segment and
measure their characteristics, like demographics or usage behavior.
2. Differentiable. The people (or organizations, in B2B marketing) in a segment
should have similar needs that are clearly different from the needs of other
people in other segments.
3. Accessibility: It sounds obvious, but your company should be able to reach its
segments via communication and distribution channels.
4. Actionable. You have to be able to provide products or services to your
segments.
5. Stable: In order for a marketing effort to be successful, a segment should be
stable enough for a long enough period of time to be marketed to strategically.
 IMPORTANCE OF MARKET SEGMENTATION
1 Co-Ordination of Product and Marketing Appeals – As market
segmentation presents an opportunity to understand the nature of the
market, the seller can adjust his thrust to attract the maximum number of
customers by various publicity media and appeals.
2 Better Position to Spot Marketing Opportunities – As the producer can
make a fair estimate of the volume of his sale and the possibilities of
furthering his sales in the regions where response of the customers is poor.
3 Allocation of Marketing Budget – It is on the basis of market
segmentation that marketing budget is adjusted for a particular region or
locality. Specific budget can be allocated according to different market
segments.

4 Meeting the Competition Effectively – It helps the producer to face the

competition of his rivals effectively. The producer can adopt different
strategies for different markets taking into account the rival’s strategies.
5 Effective Marketing Programme – It helps the producer to adopt an
effective marketing programme and serve the consumer better at
comparatively lower cost. Diverse marketing programmes can be attached
for various segments.
6 Evaluation of Marketing Activities – Market segmentation helps the
manufacturer to find out and compare the marketing potentialities of the
products. It helps to adjust production and using his resources in the most
profitable manner. As soon as the product becomes obsolete, the product
line could be diversified or discontinued.
 BASIS OF MARKET SEGMENTATAION

GEOGRAPHICAL DEMOGRAPHICAL PSHCYOGRAPHICAL BEHAVIORAL

a) Density - urban, semi urban, rural. a) Gender a. Life Style a. User Status
b) Region-NEWS (North, East, West, b) Age b. Personality b. Occasions
South) c) Nationality c. Social Class c. Benefits sought
c) Climate - Hot, moderate, cold d) Income
d) City (population) e) Family Size
f) Religion
g) Education
h) Family Life Cycle
i) Occupation
j) Race
 BASIS OF CONSUMER MARKET
SEGMENTATAION

BEHAVIORAL PSHCYOGRAPHICAL PROFILE

a) Benefit Sought a) Life Style a. Socio-economic

b) Purchase Occasion b) Personality Status
c) Purchase Behavior c) Values b. Geographical
d) Usage d) Interest c. Demographical
e) Perception & Beliefs
 TARGETING
Target Marketing is done after market segmentation, i.e. once the
marketer has identified different segments within the market. After the
segmentation, the marketer then devises various marketing strategies and
promotional schemes which will suit the demand of the market. This is
done keeping in mind the tastes of the individuals of particular segment.
This process is called targeting. Organisation targets them, once market
segments are created, Targeting is the second stage. There are three steps,
and this includes segmentation, targeting and market positioning.
What Is a Target Market?
A target market refers to a group of potential customers to whom a
company wants to sell its products and services. This group also includes
specific customers to whom a company directs its marketing efforts. A
target market is one part of the total market for a good or service.
Consumers who make up a target market share similar characteristics
including buying geography, buying power, demographics, and incomes.
Identifying the target market is an essential step for any company in the
development of a marketing plan. Not knowing who the target market is
could cost a lot of money and time for a company.
Target markets are groups of which have a specific segmentation as given :
Geographic (their location or climate region)
Product-related segmentation (relationship to a product)
Psycho-graphic segmentation (similar attitudes, values, and lifestyles)
Demographic segmentation (gender, age, income, occupation, education,
household size, and stage in the family life cycle)
Behavioural segmentation (occasions, degree of loyalty)
There are 4 basic strategies for reaching the target market:
STRATEGIES FOR REACHING TARGET MARKETS

1. Undifferentiated marketing( Mass Marketing)

2. Differentiated marketing(Segment Marketing)
3. Concentrated marketing(Niche Marketing )
4. Direct marketing
Target market strategy consists of three general phases
5. Analyzing consumer demand
6. Targeting the market
7. Developing the marketing strategy
 POSITIONING
In the final step, positioning, you map out the different variables
considered in the previous two steps and position your product
differently to your competitors in the minds of your customers.
You want your product or service to take a unique position in the
market. In marketing terms, this is called your value proposition.

Positioning defines where your product (item or service) stands in

relation to others offering similar products and services in the
marketplace as well as the mind of the consumer.
A good positioning makes a product unique and makes the users consider
using it as a distinct benefit to them. A good position gives the product a
USP (Unique selling proposition). In a market place cluttered with lots of
products and brands offering similar benefits, a good positioning makes a
brand or product stand out from the rest, confers it the ability to charge a
higher price and stave off competition from the others. A good position in
the market also allows a product and its company to ride out bad times
more easily. A good position is also one which allows flexibility to the
brand or product in extensions, changes, distribution and advertising
WHAT IS PRODUCT POSITIONING
The name implies it’s the way a product is physically displayed.
While product placement can be one aspect of product positioning,
it’s much more involved than that. It’s the way your products or
services are perceived by target audiences and competitors.
The key to ensuring successful product positioning is to present
your products in the most honest, impactful way possible. The
whole point is to stand out and be unique. You need to capture your
audience’s attention and hold it.
POSITIONING CONSISTS OF 3 STEPS
1. First identify the possible difference in product, service
or personal that might be established in relation to its
competitor
2. Secondly select most important difference relevant to
target market
3. Thirdly effectively signal to the target market how it
differs from its competitors
 POSITIONING TOOLS
A. Product differentiation
 Features

 Performance

 Durability

 Reliability

 Reparability

 Style

 Design
B. Services differentiation
 DELIVERY:

 INSTALLATION

 CUSTOMER TRAININ

 CUSTOMER CONSULTING

 MAINTENANCE AND REPAIR

 MISCELLANEOUS SERVICES
C. Personnel differentiation

1. Skill Knowledge : They possess the required skill and knowledge;

2. Respectful Manner: They are friendly, respectful, and considerate;
3. Credibility: They are trustworthy;
4. Reliability: They perform the service consistently and accurately;
5. Responsiveness: They respond quickly to customers' requests and
prob­lems;
6.Communication: They make an effort to understand the customer
and communicate clearly.
D. Image differentiation
Image is the way the public perceives the company or its
products. Image is affected by many factors beyond the
company's control,
It should be diffused in annual reports, brochures,
catalogs, packaging, company stationery, and business
cards.
An effective identity does three things.
1.First, it establishes the product's character and value proposition.
2.Second, it conveys this character in a distinctive way.
3.Third, it delivers emotional power beyond a mental image.
Identity can be built by strong
1. SYMBOLS
2. SLOGANS,
3. SPECIAL EVENTS
4. ATMOSPHERE
TEN ELEMENTS YOU CAN’T IGNORE IF YOU WANT
TO ACHIEVE GREAT PRODUCT POSITIONING.
1) Know Your Target Audience: Never give your target audience
what they need. Give them what they want. People don’t buy
what they need. They buy what they want. It’s the marketer’s job to
discover everything they possibly can about the target audience.
2) Tell Them Who You Are: Establish brand credibility and you can
establish a long-term relationship with target audiences. People that
trust a brand are much more inclined to purchase from that
brand. Don’t make promises or claims that can’t be verified or
aren’t true. Honesty and transparency are the best policies and will
promote healthier product positioning.
3 Provide Evidence: You can’t build brand credibility until you
prove that your brand is reliable and trustworthy. The best way
to establish credibility is by presenting evidence. Customer
reviews, testimonials, case studies, sales numbers, and statistics
are just a few methods that can be used to great effect. Reviews
are especially powerful. When was the last time you made a
significant purchase without reading reviews on Amazon.com,
eBay, or Quora? 61% of customers read reviews online before
making a purchasing
4 Value Proposition:Your value proposition needs to answer a
crucial question; How can your product improve the lives
of your customer? Your target audience will dismiss your
product in a heartbeat if they don’t perceive any value. This
is the most important aspect of product positioning and
one of the hardest to execute effectively. Discover the most
valuable aspects of your product and then look for ways to
promise and deliver on that value.
5 Unique Selling Proposition
How is your product unique? What distinct problem does it solve? In order
to make this work for your product positioning, you need to pinpoint
exactly what makes your products and brand unique. Then, convey
those elements to your target audience. People love to have ownership of
brands and products that are different and can stand out.
6 Segment Your Market : You can’t appeal to everyone in your target
market without customization. Separate your audience into groups with
shared traits, habits, and needs. Once this is accomplished you’ll be able to
speak to the individual wants of each group with more authority and
influence.
7 Carefully Craft Your Message:Each market segment has different
communication requirements. The medium, channel, voice, and tone of
each segment should feel custom and personal. Start by creating a
positioning statement for each of your segments:
 Define your ideal target customer
 Decide how your product will impact the target customer
 Determine how you will fulfil product claims
 Once you’ve determined these qualifiers you can begin crafting custom
messages that speak to the values and interests of each segment.
8 Know Your Competition: Knowing the details of your competition is the
key to differentiation in product positioning. There are a few ways to
differentiate your products and brand.
Innovation. If your products are unique and memorable then you have an
edge over the competition.
Improvement. Make a better mousetrap and market it better than the
competition.
Core values. Stand out from the crowd with admirable core values and
policies that can’t be replicated.
9 Showcase Your Expertise: Demonstrate why your target
audience should do business with you. What makes you the
best? Why is your product a better choice than any other
product in its category? Demonstrations, testing, and trials
can be very effective product positioning tools. If you’ve won
awards, been highly ranked, or professionally reviewed that’s
the perfect opportunity to showcase the efficacy of your
product.
10 Focus on Competitive Advantages
At the end of the day, it boils down to building a competitive
advantage. If you think about great pianos, Steinway comes
to mind. Quality cars that hold their value usually invoke
thoughts of Toyota or Honda. What you’re selling doesn’t
matter as much as the way it’s being sold. Of course, you
can’t expect to sell a product that doesn’t work and doesn’t
deliver on claims without eventually going out of business.
Ultimately it’s the way you build a competitive advantage that
will set your product positioning apart.