Chapter 6
Market Segmentation,
Positioning, and the
Value Proposition
PPT 6-1 1
© 2009 South-Western, a part of Cengage Learning
STP Marketing and the
Evolution of Marketing Strategy
1. Target Market: A sub-group of a larger market chosen as
the focal point for a marketing or advertising campaign. (NOT
illegal or unethical!)
2. Positioning: Designing and representing a brand in a way
that is distinct in the consumer’s mind.
3. Positioning Strategy: Selecting key themes to
communicate to a target market.
4. Marketing Strategy: Evolves as a result of 1-3
PPT 6-2 2
Beyond STP—Regular
Assessment
1. Reassess segmentation strategy:
Exam the current target segment to develop new and
better ways of meeting its needs.
Change the target and reposition the brand to a new
segment.
2. Pursue product differentiation strategy:
Emphasize or create differences in brands to
distinguish them from competitors.
Advertising plays a critical role because the consumer
will have to be convinced that the difference is
meaningful.
PPT 6-3 3
Identifying Target Segments:
Market Segmentation
Geography
Demographics Psychographics
Lifestyles Commitment
Levels
Benefits
Usage Patterns
PPT 6-4 4
The STP Marketing Process
(Segmenting, Targeting, Positioning)
1. Break the broad market into smaller, more
homogenous segments
2. Specifically target discrete market segments
3. Position the brand to appeal to the targeted
segments
PPT 6-5 5
Segmenting by Usage and
Commitment
Advertising and promotion targeted to:
Heavy users
Nonusers
Brand-loyal users
Switchers/Variety seekers
Emergent Consumers
– Point of entry marketing strategy
PPT 6-6 6
Demographic Segmentation
Age
Gender
Race
Marital Status
Income
Education
Occupation
PPT 6-7 7
Ad in Context Example
How
How would
would you
you
describe
describe the
the
demographic
demographic segment
segment
targeted
targeted by
by this
this
advertising
advertising campaign?
campaign?
PPT 6-8 8
Ad in Context Example
How
How about
about this
this ad?
ad?
What
What is
is the
the target
target
demographic
demographic for for this
this
ad
ad campaign?
campaign?
PPT 6-9 9
Geographic Segmentation
Country
Region
State
City
Neighborhood
Geo-demographic
PPT 6-10 10
Psychographics and
Lifestyle Segmentation
Lifestyle
Opinions Activities
Interests
Lifestyle segmentation
provides insight into
consumer’s
motivations
PPT 6-11 11
Benefit Segmentation
Prestige? Safety?
Fuel Economy? 12
PPT 6-12
Business to Business Markets
Markets segmented by:
Usage rates
Geographic location
SIC (Standard Industrial Classification)
Code
Stage in the purchase process: first time
vs. experienced buyers
Benefits desired
PPT 6-13 13
Ad in Context Example
STP
STP Marketing
Marketing is is
used
used inin the
the business-
business-
to-business
to-business market
market
as
as well
well as
as the
the
consumer
consumer market.
market.
14
PPT 6-14
Prioritizing Target Segments
1. Examine your ability to deliver value to the
segments and costs of new capabilities—
distinct competencies of the firm
2. Research segment size, growth potential
and usage frequency
3. Assay the competitive environment
4. Find a niche you can scratch
PPT 6-15 15
Effective Positioning
Deliver on the brand promise
There is magic in consistency
Make the positioning different and simple
for consumers to understand
PPT 6-16 16
Fundamental Positioning
Themes
Benefit Positioning
User Positioning
Competitive Positioning
PPT 6-17 17
Ad in Context Example
Do
Do you
you think
think this
this ad
ad for
for
Ryka
Ryka shoes
shoes is is
emphasizing
emphasizing benefit,
benefit,
user,
user, or
or competitive
competitive
positioning?
positioning?
PPT 6-18 18
Repositioning
Used to revive an ailing brand or fix a
lackluster new market entry
Advertising themes and positioning can
be trendy and become outdated
The challenge: Changing perceptions of
a brand forged over years of advertising.
PPT 6-19 19
Capturing the Value Proposition
Functional V
Emotional A
Self-expressive L Relative Price
Benefits U
E
PPT 6-20 20
