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Segmentation, Targeting, & positioning. S-T-P. Customers have different needs and behave in different ways One size fits all 3 step process – STP Segment Target Position. Segment. Aggregate customers into two groups Common needs Common response to specific marketing offers.
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S-T-P • Customers have different needs and behave in different ways • One size fits all • 3 step process – STP • Segment • Target • Position
Segment • Aggregate customers into two groups • Common needs • Common response to specific marketing offers
Ways to Segment • Geographic • Units such as countries, regions, states, counties, cities, or neighborhoods • Consider things like population density & growth and climate • Demographic • Based on population characteristics • Age, gender, income, education, marital status • Remember, you can segment business markets too!
Ways to Segment • Psychographic • Lifestyle of individuals • Based on activities, interests, opinions • Behavioral • Seeks to understand the “why” about customers • Benefits sought, product usage • Customers buy BENEFITS • Segmentation table on pg 87
Selecting Segments • Size of segment • Expected growth of segment • Competitive position • Cost of reaching segment • Compatibility w/ resources/objectives
Segmentation Questions • What is purchased? • Who is purchasing? • Where is it purchased? • How is the product/service purchased? • How much is purchased? • When is it purchased? • Why is the product/service purchased?
Targeting • Undifferentiated • Assume more commonalities than differences among segments • Use the same marketing mix for multiple segments • Differentiated • Target more than one segment, but specially design marketing mixes for each segment
Targeting • Concentrated (Niche) • Pick one segment to focus on • Tailor all elements to that segment • Very common among startups
Positioning • What is the 1 thing you want to be known for? • Create your value proposition • Think benefits sought • Distinguish yourself
Exercise • 1. Define the primary customer - Start broad and then narrow it down. • **note that your primary customer may be the same or different from the person who is using the product. • 2. Define secondary customers -- Define secondary users and buyers of your product .
Exercise • 3. Define the problem - What is the problem you are solving. What is the real area of pain for the primary customer listed above. • 4. Define the secondary problem or other symptoms of the problem - A significant problem will have an impact in multiple areas. List some the areas affected by the problem and how they are affected.
Exercise • 5. Emotions - List the emotions of the customer as they think about the problem. What is the primary emotion associated with the pain?
Exercise • 6. Market characteristics - Breakdown the characteristics of your primary customer. What do they buy? How do they buy it? What are their hot buttons? What do they worry about?
Exercise • 7. Channels - Describe the other companies that the customer works with in solving similar problems. Decide if these companies are good partners for you. What is their primary business? What can your product offer them?
Exercise • 8. Elevator pitch - Describe the customer, their pain, and how you solve it differently then anything else on the market. Provide just enough information for the listener to want to know more. Target the message to your primary customer and bring their emotions into the pitch. • 9. Competitors - List your competitors and their strengths and weaknesses in comparison to your offering.
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