STP

Mass Marketing
■ A strategy that presumes there is one undifferentiated market and that one product will
appeal to all consumers in that market.
Advantages only one standardized product is developed
■ Lower cost Disadvantage
■ One advertising campaign is needed ■ One ■ It only works if all consumers have the
same needs, wants, desires, and the same
marketing strategy is developed ■ Usually
background, education and experience

■ Today, mass marketing has largely been replaced by a three-step market

matching strategy:
❑ Segmentation
 ❑ Targeting
❑ Positioning

Steps in Market STP

STP
Segmentation
■ Act of dissecting the marketplace into submarkets that
require different marketing mixes
Targeting
■ Process of reviewing market segments and deciding which
one(s) to pursue
Positioning
■ Establishing a differentiating image for a product or service
in relation to its competition
1. Segmentation

■ The process of dividing a market into distinct subsets

(segments) of consumers with common needs or
characteristics and selecting one or more to target with a
distinct marketing mix
 1. Segmentation

Why Segmentation -
• Not all buyers alike

• Subgroups may be identified

• Subgroups smaller and more homogeneous

• Easier to satisfy smaller groups

Requirements for Effective Segmentation

 Bases of Market Psychographic This segmentation approach involves an unde
interests, and opinions.

Segmentation Benefits sought This approach segments consumers on the bas

the product, such as convenience, or status, or
SEGMENTATIO DESCRIPTION OF EACH MAIN CONSUMER SEGMENTATION BASE
N BASE

Behavioral Segmenting the market based on their relatio

Geographic Segmenting by country, region, city or other geographic basis. Examples include: heavy or light users, brand

MAIN SEGMENTATION BASE EXAMPLE/S

CATEGORY
Geographic Country/continent England, UK, Europe
Region/area of the country North India, West India, South India
City New York, Los Angeles, Dallas, Chicago

Urban/rural Measured by the area’s population density

 Climate Tropical, arid, alpine
Coastal/inland Measured by distance to the coast

Psychographic Lifestyle Family, social, sporty, travel, education Values (VALS) (Check Next
Slide) VALS = values and lifestyles
Social class Upper class, middle class, lower class
Personality/self-concept Ongoing, creative, innovator, serious
Activities, interests, opinions (AIO) Various hobbies, sports, interests
Demographic Age group Pre-teens, teens, young adults, older adults

Generation Baby boomers, Gen X, Gen Y

Gender Male, female

Marital status Married, single, widowed

Family life cycle Young married no kids, married young kids

Benefits Sought Needs/motivations Convenience, value, safety, esteem

Behavioral Occasion Birthday, anniversary, Valentine’s Day

Buying stage Ready to buy, gathering information only

User status Regular, occasional, never

Loyalty status Loyal, occasional switcher, regular switcher

Involvement level High, medium, low

VALS Framework (Psychographic Segmentation)

 Examples of Segmentations
Examples of Demographic Segmentation -
• Brown & Williamson’s Kool brand
 • used a cartoon character, the penguin Willie, that was popular with black teens •
Has sponsored an annual jazz festival that attracts large black audiences • Tobacco
companies have clearly targeted African Americans
• In 1998 cigarette advertisements represented 60% of ad space in black newspapers •
Following the success of the movie “Malcolm X”, Star Tobacco Co. introduced a new
brand called “X,” packaged in the black, red and green colors of the black nationalist
movement
• Marketed in 20 states before pressure from the community forced discontinuance of
the brand
Examples of Psychographic Segmentation -
• Kellogg’s targets health-conscious consumers with brands such as Special K and
Product 19
• Old Spice is targeting the active sports lifestyle with High Endurance deodorant

2. Targeting
 2. Targeting

Market Targeting Strategies

There are three basic types of strategies:

1. Undifferentiated
2. Multisegment (Differentiated)
3. Concentration (Niche

2. Targeting
 Market Targeting Strategies

There are three basic types of strategies:

1. Undifferentiated
2. Multisegment (Differentiated)
3. Concentration (Niche

Market Targeting Strategies

1. Undifferentiated Strategy
■ A strategy that ignores differences between groups within a market and offers a single marketing
mix to the entire market
■ It works when a product is new to the market and there is minimal or no competition

2. Multisegment/Differentiated Strategy
■ Targeting two or more segments with different marketing mixes for each
Advantages and disadvantages
■ Minimizes risks, as losses in one segment can be made up for in others
■ Unique product features allow for higher prices
 ■ Increased costs for differentiated products and marketing

3. Concentrated/Niche Marketing Strategy

■ Focus on one sub-market
■ Greater knowledge of customers’ needs
Market Targeting Strategies
 3. Positioning
■ Deciding how the firm wants the company and its brands to be perceived and
evaluated by target markets
 ■ Differentiating the product from other products of the firm or its competition ■
Positioning complements and is an integral part of the company’s segmentation
strategy and selection of target markets
■ The same product can be positioned differently to different market segments ■ The
result of successful positioning is a distinctive brand image on which consumers rely in
making product choices
Perceptual Mapping
■ A spatial picture of how consumers view products or brands within a market ■ Allows
marketers to determine how their product appears in relation to competitive brands
■ Enables them to see gaps in in positioning of all brands in the product class to identify areas
in which consumer needs are not being met
 Repositioning
■ Marketers may be forced to reposition products due to competition or a changing
environment
Repositioning in practice
■ Modifying an existing brand
■ Targeting it to a new market segment
■ Emphasizing new product uses and benefits
■ Stressing different features with the intention of boosting sales