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Chapter 6
Market Segmentation, Positioning, and the Value
Proposition
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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 consumers mind.
  
• Positioning Strategy Selecting key themes to
  communicate to a target market.

Ch 6 Segmenting Markets 2
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The STP Marketing Process(Segmenting, Targeting,
Positioning)

• Break the market into smaller, more homogenous
  segments
• Specifically target the discrete market segments
• Position the product or service to appeal to the
  targeted segments

Ch 6 Segmenting Markets 3
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How would you describe the demographic segment
targeted by this advertising campaign?
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How about this ad? What is the target
demographic for this ad campaign?
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Identifying Target Segments Market Segmentation
Geography

• Psychographics

• Demographics

Lifestyles
Commitment Levels
Ch 6 Segmenting Markets 6
Benefits
Usage Patterns
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Segmenting by Usage and Commitment

• Advertising targeted to
• Heavy users
• Nonusers
• Brand-loyal users
• Switchers/Variety seekers
• Emergent Consumers

Ch 6 Segmenting Markets 7
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Demographic Segmentation

• Age
• Gender
• Race
• Marital Status
• Income
• Education
• Occupation

Ch 6 Segmenting Markets 8
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Geographic Segmentation
Ch 6 Segmenting Markets 9
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Psychographics and Lifestyle Segmentation
Lifestyle
Opinions
Lifestyle segmentation provides insight into
consumers motivations
Ch 6 Segmenting Markets 10
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Benefit Segmentation
Passenger Safety?
Prestige?
Ch 6 Segmenting Markets 11
Fuel Economy?
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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

Ch 6 Segmenting Markets 12
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STP Marketing is used in the business-to-business
market as well as the consumer market
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Prioritizing Target Segments

• Examine your ability to deliver value to the
  segments and costs of new capabilities
• Research segment size, growth potential and usage
  frequency
• Assay the competitive environment
• Find a niche you can scratch

Ch 6 Segmenting Markets 14
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Effective Positioning

• Is based on substance of the brands values
• Reflects internal values and structure of the
  firms market orientation
• Is consistent over time
• Is both memorable AND distinctive

Ch 6 Segmenting Markets 15
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Fundamental Positioning Themes

• Benefit Positioning
• User Positioning
• Competitive Positioning

Ch 6 Segmenting Markets 16
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Do you think this ad for Ryka shoes is
emphasizing benefit, user or competitive
positioning?
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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.

Ch 6 Segmenting Markets 18
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Capturing the Value Proposition
Functional
Emotional
Self-expressive
Ch 6 Segmenting Markets 19