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STP Analysis
or
Strategic Marketing
Amali Wijekoon
Dept. of MOT

Learning outcomes
At the end of the session you should be able to:
describe and apply the STP approach.


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STP stands for
market Segmentation
Target marketing
market Positioning

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Market segmentation
Dividing the market into distinct groups of
buyers on basis of needs, characteristics, or
behaviors who might require separate
products or marketing mixes
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Principles of segmentation
The field
Segmentation bases
Intergroup heterogeneity
Intragroup homogeneity
Degree of complexity

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Segmentation bases
Geographic segmentation
Demographic segmentation
Psychographic segmentation
Behavioral segmentation

A marketer can try different segmentation
variables alone or in combination


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Geographic segmentation
Dividing the market into different geographical
units
World region or country
Country region
City
Density (urban, suburban, rural)
Climate
Localizing 4Ps to suit needs of geographic
segments
Ex: KFC Buriyani

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Demographic segmentation
Dividing the market based on demographic
variables
Age
Gender
Family size
Income
Occupation
Education
Religion

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Demographic segmentation contd
Popular base for segmentation
Customer needs often vary closely with
demographic variables
Demographic variables are easy to measure
Irrespective of the method of segmentation,
marketer must understand the demographic
characteristics of the target market
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Demographic segmentation contd
Age & life cycle stage
Kids products, old age products/services
E.g. Procter & Gamble P&G (Head & shoulders, Oral
B toothbrush, Gillette, Tide, Pampers, Pringles)
Gender
Clothing, cosmetics, magazines
E.g. Nikewomen.com
Income
Automobiles, clothing, cosmetics, financial services,
travel
E.g. credit cards

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Psychographic segmentation
Dividing based on psychographic make-ups
Social class lower class, upper class, middle
class, working class
Life style
Personality

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Behavioral segmentation
Divide based on behaviours
Occasions regular occasion, special occasion
Benefits quality, services, economy,
convenience, speed
User status non user, ex-user, potential user,
first-time user, regular user
User rates light user, medium user, heavy user
Loyalty status non, medium, strong, absolute

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Example - Toyota
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Activity 1
Using at least three different bases for each
how might you segment the
mobile phone,
energy drinks and
fashion clothing markets?
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Market targeting
The process of evaluating each market
segments attractiveness and selecting one or
more segments to enter
Market targeting
Evaluating market segments
Selecting target market segment

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Evaluating
Measurable
The size, purchasing power and profiles of the
segments can be measured
E.g. left handed people
Accessible
Segments can be effectively reached and served
E.g. rural areas
Substantial
Segments are large or profitable enough to serve
E.g. Develop cars specially for people whose height is
greater than 7 feet


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Evaluating contd
Differentiable
Segments are conceptually distinguishable and
respond differently to different marketing mix
elements
E.g. Rayan air vs. British Airways
Actionable
Effective programs can be designed for attracting
and serving the segments, but company should
have adequate resources to implement those


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Selecting
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Full market coverage
Mass marketing strategy
A firm decides to ignore market segment
differences and go after the whole market
with one offer
Focuses on what is common in the needs of
consumers rather than on what is different
Difficulties in developing a product that will
satisfy all consumers
Ex: postal service, unisex clothes
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Differentiated marketing strategy
Segmented marketing strategy
A firm decides to target several market
segments and design separate offers for each
Selective specialization
Market specialization
Product specialization
Higher sales and stronger position in each
segment
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Single segment concentration
Niche marketing strategy
Small share of large market vs. large share of a
small segment (market)
Greater knowledge of consumer needs
Less attractive to competitors
Risk can be high

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Positioning
Positioning is the act of designing company's
offering and image to occupy a distinctive
place in the minds of the target market
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Re-positioning strategy
Change the tangible attributes and then communicate
the new product to the same market
E.g. Rin
Change the way a product is communicated to the
original market
E.g. Lucky yoghurt
Change the target market and deliver the same product
E.g. Munchee cream cracker
Change both the product (attributes) and the target
market
E.g. Prima Kottumee, Lifeboy soaps
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Activity 2
Refer to activity 1 where you identified
segments for mobile phone, energy drinks,
and fashion markets
Select a segment you would like to enter and
describe how you would position the product
in that selected segment
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Thank you
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