11-07-2015

STP Process
Market Segmentation

Segmentation
Market Targeting

1. Identify segmentation
variables & segment the
market
2. Develop Profiles of
resulting segments

3. Evaluate the attractiveness

of each segment
4. Select the target segments

Market Positioning

5. Identify possible positioning

concepts for each target
segment
6. Select, develop, and
communicate the chosen
positioning concept

Market Segmentation
Market
Segmentation

Dividing a market into distinct groups with

distinct needs, characteristics, or behavior
who might require separate products or
marketing mixes.

More precise
definition of customer
needs & wants

More Accurate
marketing
objectives

Improved
resource
allocation

Better Marketing
results

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Market Segments & Niches

Market Segments are large identifiable
groups within a market, within the car
market buyers seeking basic
transportation, high performance
A niche is a more narrowly defined group
which seeks a special combination of
benefits,

Bases For Segmenting Consumer

Markets
GEOGRAPHIC

DEMOGRAPHIC

PSYCHOGRAPHIC

BEHAVIORAL

Geographic Segmentation
Dividing the market into different
geographic units such as nations, states,
regions.

Demographic Segmentation
Ex- State-wise, City-wise
Rural Vs Urban markets
South Vs North

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Basis is demographic variables such as

age, gender, family size, family type,
family life cycle, income..
Age and life cycle stage, Wants and
capacities change with age
Ex- Life Insurance Schemes, For young vs
old, Reverse Mortgage .
Family Type, Joint Vs Nuclear.
Ex- DM is different , needs are different

Gender, Men Vs Women,

Ex- Working Women range from all major
cloth brands, Special products, within
financial services, Bank Accounts,
Income, is a long standing practice, TOP
of the pyramid Vs BOP markets..
Multiattribute Demographic
Segmentation, looking at combining two or
more demographic variables
Ex- Bank doing it by both age and income

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Psychographic Segmentation

Buyers are divided into different groups on

the basis of social class, lifestyle, and/or
personality
Social Class, A B C has a strong
influence on the persons preferences in
cars, clothing, home furnishing, leisure..
Lifestyle, product interests are influenced
by lifestyles. Infact goods they consumer
express their lifestyles.
Personality, brand personality &
consumer personality, sincerity,
ruggedness..

Buyers are divided into groups on the

basis of their knowledge, attitude, use or
response to a product

Behavioral Segmentation

Occasion, when they develop a need to

purchase or use a product
Ex- breakfast cereals, Horlicks, Festival,
marriage
Benefits, A powerful form, based on the
benefits they seek from the product

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User Status, User, non-user, ex-user,

potential user, first-time user, and regular
user
Usage rate, light , medium and heavy
users groups of products, many time the
heavy users of a product have similar
demographic, psychographic & media
habits
Loyalty Status, Hard-core loyal, split
loyal, shifting loyal, switchers
Buyer-Readiness Stage, Unaware,
aware, interested , intend to buy
Attitude, enthusiastic, positive, indifferent,
negative and hostile.

Measurable The size, purchasing

power, and profile of the segments can be
measured
Substantial Should be large & profitable
enough to serve.
Accessible- can be effectively reached &
served
Differentiable- conceptually
distinguishable and respond differently to
different marketing mix elements and
programs
Actionable Effective programs can be
formulated for attracting and serving the
segment

Requirements for effective

Segmentation
MEASURABLE

SUBSTANTIAL

ACCESSIBLE

DIFFERENTIABLE

ACTIONABLE

Market Targeting
Segmentation reveals the market-segment
opportunity that exist, now the company
has to decide how many and which ones
to target.

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Evaluating Market Segments

Segment Size & Growth, has it got the
right size & growth characteristics. Right
size is relative and growth is needed
Segment Structural Attractiveness,
Porters 5 Force model, industry
competition, supplier & buyer power, entry
barriers & substitutes
Company Obj & Resources, company
long term goals, competence to enter the
segment, only enter when you can offer
superior value

Selecting Target Markets

Single-segment concentration, can work in
favor owing to greater knowledge of segments
needs, can also be risky
Selective Specialization, a no of segments are
selected, each objectively attractive &
appropriate given co resources & objs
Product Specialization, focus on a product
which sells across segments
Market Specialization, serving many needs of a
particular customer group
Full Market Coverage

Differentiation & Positioning

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Differentiation is the act of designing a set

of meaningful differences to distinguish the
companys offer from competition

Differentiation Variables

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Product

Services

Personnel

Features
Performance
Conformance
Durability
Reliability
Reparability
Style
Design

Delivery
Installation
Customer
Training
Consulting
Services
Repair
Misc.

Competence Symbols

Image

Courtesy
Media
Credibility Atmosphere
Reliability
Events
Responsive
ness
Communica
tion

Positioning is the act of designing the

companys offering and image to
occupy a distinctive place in the mind
of the target market.