Chapter 4:

UNDERSTANDING
the
MARKET ENVIRONMENT:
SEGMENTING, TARGETING
and
POSITIONING
4.1
2.1
STP Marketing & Evolution
of Marketing Strategy

 Segmentation
 Target Segment
 Brand Positioning

STP Marketing

4.2
The Value of STP Marketing
 Precise Specification of Marketing Objectives
 Better Understanding of Needs and Motives of Target
Market
 Better Understanding of Customers and Noncustomers
 More Efficient Allocation of Resources
 Ability to Assess Strengths and Weaknesses
 Ability to Identify Messages to be Used Across All
Promotional Tools
 Better IMC Management of Promotional Effort
 Ability to Respond More Quickly to Changes in the
Environment
4.3
Beyond STP Marketing
 STP Decisions are Continuously Evolving Due to
the Dynamic Nature of Markets
 To Maintain the Profitability of Brands,
Segmentation Decisions Must be Reassessed
Regularly
 Product Differentiation Infuses STP Decisions
with Vitality

4.4
Demographic Segmentation
 Segmentation Based on Physical Descriptors of
Individuals
 Age

 Gender

 Ethnic Background

 Education

 Marital Status

 Occupation

4.5
Brands in Common
Product Categories Can Be
Targeted to Audiences
Based on Ethnic Background

4.6
What is the Basis for
Segmentation in this
Message?

4.7
Identifying Target Segments

 Geographic Segmentation
 Climate & Topographical Features

 Food Preferences & Preparation Habits

 Entertainment Preferences

 Recreational Activities

 Geodemographic Segmentation
 PRIZM

4.8
Identifying Target Segments (con’t)
 Usage Patterns & Commitment Levels
 Heavy Users

 Nonusers

 Brand Loyal Users

 Switchers or Variety Seekers

 Emergent Customers

 Psychographic & Lifestyle Segmentation

 AIO’s

 Benefit Segmentation

4.9
A Classic Example of
Benefit Segmentation

4.10
Segmenting Business-to-Business Markets
TYPES OF ORGANIZATION SEGMENTATION

STANDARD INDUSTRIAL CLASSIFICATION (SIC) SEGMENTATION

SIZE OF ORGANIZATION SEGMENTATION

GEOGRAPHIC LOCATION SEGMENTATION

END USE OF SEGMENTATION

HORIZONTAL & VERTICAL MARKET SEGMENTATION

4.11
Prioritizing Target Segments

CAPABILITIES OF THE ORGANIZATION

SIZE AND GROWTH POTENTIAL OF THE SEGMENT

COMPETITIVE FIELD

4.12
Formulating a Positioning Strategy
for a Brand
ESSENTIALS OF EFFECTIVE BRAND POSITIONING STRATEGIES
 Substantive Value
 Consistency
 Simplicity & Distinctiveness
FUNDAMENTAL BRAND POSITIONING THEMES
 Benefit Positioning
 User Positioning
 Competitive Positioning
REPOSITIONING BRANDS
4.13
Would You Say That Being
“Cool” Offers Substantive
Value as a Basis Positioning
Strategy?

4.14