McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
The Need for STP Strategy in Global Markets
Global Market Segmentation Strategies
• Country-based (Macro) Segmentation
• Consumer-based (Micro) Segmentation
• B to B segmentation
• The Long Tail: Every customer can be a segment
Targeting
Criteria for Targeting
Selecting a Global Target Strategy
Undifferentiated Approach
Differentiated Approach
Concentrated Approach
Customized Approach
Positioning
• Process
• Example
Summary
9-2
STP allows marketers to determine the
value their product or service can deliver to
customers
• Segmentation
Identification of specific types of customers
• Targeting
Identifying methods to reach customer segments
• Positioning
Communicating value in appealing ways to targeted
segments
9-3
Toidentify and engage the right customer
segments, but also to preserve the true
identity of the brand while answering the
need to position it in very customized,
segment-specific communications
9-4
Segmentation is defined by the American
Marketing Association as “the process of
subdividing a market into distinct subsets of
customers that behave in the same way or
have similar needs.”
• The process is challenging, however,
• When done well, the practice can give a firm a
substantial competitive advantage
9-5
Five
criteria must be present for a group of
customers to be a ‘segment.’ Each segment
must be:
1. Measurable
2. Different enough to warrant changes in the
marketing mix
3. Accessible through marketing and distribution
channels
4. Large enough to be profitable
5. Stable enough to allow for proper targeting and
measurable response
9-6
Country-based, or macro, segmentation
9-7
Usesgeographic, demographic and socioeconomic
variables such as location, GNP per capita,
population size or family size to group countries
intro market segments
• Enables a company to centralize its operations and save
on production, sales, logistics and support functions
• Doesn’t take into consideration consumer differences
within each country and among the country markets that
are clustered together
• Fails to acknowledge the existence of segments that go
beyond the borders of a particular geographic region
9-8
Consumers are grouped based on common
characteristics such as cultural preferences,
values and attitudes, or lifestyle choices
• Employs psychographic and behavioristic
segmentation variables
• Certain segments identified to have the same
characteristics may be present on a global scale,
while others may be particular to a specific country
or region
9-9
Insert Box 9-1
9-10
The basic tenet of VALS is that people
express their personalities through their
behaviors
VALS specifically defines consumer
segments on the basis of those personality
traits that affect behavior in the marketplace.
• A related method of psychography is Global Scan,
which measures attitudes, consumer values and
buying patterns.
9-11
Figure 9-2
9-12
Several
major differences are apparent
between the consumer and business-to-
business segmentation processes
• The B2B market rarely exceeds several hundred
company clients, while consumer markets number
literally millions of customers
• Business volume far outstrips individual consumer
purchasing
• The dynamics of the B2B purchasing process are far
more complex
9-13
Industry
Geography
Decisionmaker demographics and lifestyle
Surveyed data
Firmographics and payment behavior
9-14
More of a tool for advertising and branding
than effective segmentation that guides
marketers in finding meaningful groups of
consumers likely to buy their product
Marketers today are spending more effort
trying to understand customers—their self-
image, aspirations and tastes—when they
should be trying to understand the “jobs” that
customers need done and bring to market
products that help with those jobs
9-15
Promulgated by Chris Anderson
• Technology is turning mass markets into millions of
niches
• The trend creates a ‘long tail’ graph
Hits sales represent the bulkier, steeper trend line
A long, thinning ‘tail’ of many unknown products that had
no chance of exposure prior to the web
• In the online world of unlimited shelf space,
products can succeed by catering to these specific
niches
9-16
Insert Table 9-2
Growth rate
Competitive position
Market accessibility
Customer fit
9-18
Also called mass or Global
brands share
standardized characteristics
marketing • Same positioning
Company is basing its worldwide
marketing on the • Single product category
common needs of its • Company name is brand
customers, instead of name
on the differences • Access to global village
Even in commoditized markets, the
• Social responsibility
undifferentiated strategy is
beginning to fade away as global
competition intensifies
9-19
Aims
to adapt the product and the
marketing mix to each target market
segment
9-20
Figure 9-2
9-21
Concentrated (Niche Targeting)
• Company focuses intensely on one segment of the
market and designs its marketing efforts with that
segment in mind
Decreased competition and dominant share are ‘pros’
But, lack of ‘portfolio diversification’ means greater financial
risk
Customized (Micromarketing)
• Deeper segmentation of the target market and more
nuanced and specialized products and marketing
campaigns aimed at very specific sub-segments of
consumers
Greatly enhanced by online research and communication
Behavioral targeting involves tracking the sites visited by
internet users and displaying ads related to their interests
9-22
The consumer compares similar brands and
products and creates a mental map of each
related to his or her individual needs and
wants
The marketer’s goal is to influence the
position brands have in the minds of
consumers in relation to competitor brands
Successful positioning results in strong,
long-term emotional ties to the brand
9-23
Through global market segmentation, the similarities and differences of
potential buying customers can be identified and grouped
Marketers can use macro or micro scale segmentation
To target the appropriate consumer segments, marketers must evaluate
and compare them on the basis of market size, growth potential, market
accessibility, competitive position and compatibility
Selecting the right market targeting strategy, marketers must decide
whether to use an undifferentiated, differentiated, concentrated or
customized approach
Marketers strive to influence the position their brands have in the
minds of consumers in relation to competitor brands
9-24