1 STP Procedure 1 Decision Making Process Tactical level– marketing-mix Product Place Price Promotion Strategic level- STP Market segmenting Targeting Positioning 2 STP –What Is It? • Segmenting – Dividing market according to some set of criteria into relatively homogeneousgroupsofcustomers • Targeting – Involves determining the attractiveness and profitability of created segmentsand then choosingthe strategy • Positioning – Creating value and image of company’s offer, which should lead to obtaining a distinguished and important place in consumers’ minds throughdifferentiationand developingcompetitiveadvantage 3 PhasesinSTP Procedure Segmenting 1. Identificationof segmentation criteria 2. Dividingthe market 3. Defininga profile of each segment Targeting 1.Segment attractiveness assessment 2. Segment profitabilityassessment 3. Choosingmarket strategy Positioning 1. Differentiationtools 2. Positioningprocess 4 Advantages of Customer Segmentation • You know your customer better -adjusting product to consumer’s needs • Make fact-based decisions rather than assumptions • Better allocation of financial resources = effectiveness • Keeps us aware of market changes • Helps us discover new opportunities 5 Weaknesses and Limitations • If you don’t identify all the areas to investigate, you might omit an important one; then your results will be inaccurate. • Due to increasing complexity of today’s markets and the proliferation of customer segments, segmentation becomesmore difficult. • Itisratherexpensive. 6
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1
STP Procedure
1
Decision Making Process
Tactical level– marketing-mix
Product Place Price Promotion
Strategic level- STP
Market
segmentingTargeting Positioning
2
STP – What Is It?
• Segmenting– Dividing market according to some set of criteria into relatively
homogeneous groups of customers
• Targeting– Involves determining the attractiveness and profitability of created
segments and then choosing the strategy
• Positioning– Creating value and image of company’s offer, which should lead to
obtaining a distinguished and important place in consumers’ mindsthrough differentiation and developing competitive advantage
3
Phases in STP Procedure
Segmenting 1. Identification of segmentation criteria
2. Dividing the market
3. Defining a profile of each segment
Targeting 1. Segment attractiveness assessment
2. Segment profitability assessment
3. Choosing market strategy
Positioning 1. Differentiation tools
2. Positioning process
4
Advantages of Customer Segmentation
• You know your customer better - adjusting product to
consumer’s needs
• Make fact-based decisions rather than assumptions
• Better allocation of financial resources = effectiveness
• Keeps us aware of market changes
• Helps us discover new opportunities
5
Weaknesses and Limitations
• If you don’t identify all the areas to investigate, you
might omit an important one; then your results will be
inaccurate.
• Due to increasing complexity of today’s markets and
the proliferation of customer segments, segmentation
becomes more difficult.
• It is rather expensive.
6
2
Segmentation Procedure
1. Identification of segmentation criteria
2. Dividing the market
3. Defining a profile of each segment
7 8
Segmentation: Conditions
Do customers have similar Do customers have similar
needs and wants?needs and wants?
Can we collect information Can we collect information
about the segment?about the segment?
Are the segments profitable?Are the segments profitable?
Can the segments Can the segments
be reached?be reached?
distinct
measurable
accesible/real
sizeable/profitable
Internally homogeneous, externally heterogeneous
Criteria and Descriptors
• Segmentation criteria (basis)
– Characteristics used for describing customers,
which allow distinguishing different market
segments
• Descriptors
– Additional consumer characteristics used for
profiling
9
Segmentation Criteria 4 B2C
• Gender, age, family size, family life cycleDemographicsDemographics
• Size of town, administative, climateGeographicGeographic
• Education, job, social class, religion, race, nationality, incomeSocioSocio--economicaleconomical