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STP Process (Segmentation (Effective segmentation should be SMART:…
STP Process
Segmentation
A market must be accessible, so segments must be reachable through communication and distribution channels.
Levels of segmentation
Segment Marketing (broad segments isolated and the needs of the segments matched, e.g. music artists matched to certain demographics)
Niche Marketing (niche markets with distinctive traits, e.g. professional dancing shoes)
Mass Marketing (mass production, mass promotion, mass distribution, e.g.: cola, FMCGs)
Micro marketing (focus on individual locations, customisation, e.g.: local sports club jerseys)
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Targeting
Once a firm has identified the segments within the market, targeting strategies are used
A target market is a group of customers business is aiming its marketing efforts at and ultimately its merchandise towards
Strategies
Differentiated strategy (targets several markets & designs a separate marketing mix for each, e.g. health insurance)
Concentrated strategy (niche/micro markets, company goes after a large share of one or a few sub-markets, e.g. Lexus, Rolex)
Undifferentiated strategy (full market coverage, e.g. coca-cola)
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Positioning
Objective: to occupy a clear, unique, advantageous position in the consumer's mind
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An effort to influence consumer perception of a brand/product relative to the perception of competing brands and products
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Differentiation
Can be based on
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services (better, faster)
channels (online, easier)
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Unique Selling Point (USP): the factor or consideration presented by a seller as the reason that one product/service is different from and better than that of the competition
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